<PAGE>
 
                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D. C. 20549

                                   FORM 10-Q


             (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
                    OF THE SECURITIES EXCHANGE ACT OF 1934

                 For the quarterly period ended June 26, 1998

                                      OR


            (  ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
                    OF THE SECURITIES EXCHANGE ACT OF 1934

         FOR THE TRANSITION PERIOD FROM _____________ TO ____________

                         Commission File No.  0-27424
                                              --------


                            WILMAR INDUSTRIES, INC.
                            -----------------------
            (Exact name of registrant as specified in its charter)


          New Jersey                                      22-2232386 
          ----------                                      ----------         
          (State of incorporation or                      (I.R.S. Employer 
          organization)                                   Identification No.)


          303 Harper Drive
          Moorestown, New Jersey                            08057
          ----------------------                          ----------
          (Address of principal executive offices)        (Zip Code)  



          Registrant's telephone number, including area code: (609) 439-1222

     Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such


           Yes    X                       No ____________    
               --------                                                


     The number of shares of the registrant's common stock, no par value,
outstanding as of July 31, 1998 was 13,383,760.
<PAGE>

WILMAR INDUSTRIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS - (Unaudited)
--------------------------------------------------------------------------------

<TABLE> 
<CAPTION> 
                                                                                             June 26,       December 26,
                                                                                               1998             1997
                                                                                          --------------   -------------- 
<S>                                                                                       <C>              <C> 
ASSETS

CURRENT ASSETS
  Cash and cash equivalents                                                               $   30,217,762   $   30,723,746
  Cash - restricted                                                                              290,503          283,655 
  Accounts Receivable - trade, net of allowance for doubtful accounts                                                    
   of $1,443,300 in 1998 and $1,359,800 in 1997.                                              27,708,078       23,801,733 
  Inventory                                                                                   32,055,286       24,979,935 
  Prepaid expenses and other current assets                                                    1,288,076          898,255 
  Deferred income taxes                                                                        1,453,000        1,227,000 
                                                                                          --------------   --------------  
          Total current assets                                                                93,012,705       81,914,324 
                                                                                                                          
PROPERTY AND EQUIPMENT, net                                                                    3,898,361        3,540,889 
                                                                                                                         
GOODWILL, net of accumulated amortization of $698,318 in 1998 and $426,066 in 1997.           18,481,900       18,121,121 

INTANGIBLE ASSETS AND OTHER, Net                                                               4,852,530        4,538,971
                                                                                          --------------   --------------  
TOTAL ASSETS                                                                              $  120,245,496   $  108,115,305 
                                                                                          ==============   ==============  

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES

  Notes payable                                                                           $      700,000   $      725,000
  Accounts payable                                                                            18,002,870       13,244,918
  Accrued expenses and other current liabilities                                               4,154,315        2,875,484
  Income taxes payable                                                                             7,000          220,819
                                                                                          --------------   --------------
            Total current liabilities                                                         22,864,185       17,066,221
                                                                                                                         
NOTES PAYABLE                                                                                    500,000          500,000 
                                                                                          --------------   --------------  

            Total liabilities                                                                 23,364,185       17,566,221

                               
COMMITMENTS AND CONTINGENT LIABILITIES
                               
STOCKHOLDERS' EQUITY :
Preferred stock, $.01 par value, 5,000,000 shares authorized; none issued
Common stock, no par value - 50,000,000 shares authorized;
  13,381,577 shares issued and outstanding in 1998
  13,335,754 shares issued and outstanding in 1997                                           103,344,175      102,793,984 
Accumulated deficit                                                                           (6,462,864)     (12,244,900)
                                                                                          --------------   --------------   
      Total stockholders' equity                                                              96,881,311       90,549,084
                                                                                          --------------   --------------   

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                                $  120,245,496   $  108,115,305
                                                                                          ==============   ==============   
</TABLE> 

The accompanying notes are an integral part of these condensed consolidated
financial statements.

<PAGE>

WILMAR INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME - (Unaudited)
--------------------------------------------------------------------------------

<TABLE> 
<CAPTION> 
                                                       For the Three    For the Three    For the Six      For the Six   
                                                       Months Ended     Months Ended     Months Ended     Months Ended  
                                                         June 26,          June 27,         June 26,         June 27,
                                                           1998              1997            1998             1997   
                                                       -------------    -------------    -------------    -------------  
<S>                                                    <C>              <C>              <C>              <C> 
NET SALES                                              $  49,658,989    $  36,409,392    $  93,204,244    $  69,618,567 

COST OF SALES                                             35,356,091       25,639,353       66,292,163       48,853,508
                                                       -------------    -------------    -------------    -------------  
             Gross profit                                 14,302,898       10,770,039       26,912,081       20,765,059

OPERATING EXPENSES:
   Operating and selling expenses                          6,761,759        5,029,959       12,874,681        9,771,000
   Corporate general and administrative expenses           2,878,776        2,588,337        5,520,886        4,920,725
                                                       -------------    -------------    -------------    -------------  
   Total operating expenses                                9,640,535        7,618,296       18,395,567       14,691,725
                                                       -------------    -------------    -------------    -------------  
             Operating income                              4,662,363        3,151,743        8,516,514        6,073,334 

INTEREST INCOME                                             (392,182)        (426,325)        (774,922)        (808,295)
                                                       -------------    -------------    -------------    -------------  
              Income before income taxes                   5,054,545        3,578,068        9,291,436        6,881,629 

PROVISION FOR INCOME TAXES                                 1,946,000        1,331,200        3,509,400        2,562,900 
                                                       -------------    -------------    -------------    -------------  
              Net income                               $   3,108,545    $   2,246,868    $   5,782,036    $   4,318,729 
                                                       =============    =============    =============    =============   


   Net income per share - Basic                        $        0.23    $        0.17    $        0.43    $        0.33 
                                                       =============    =============    =============    =============   
   Net income per share - Diluted                      $        0.23    $        0.17    $        0.43    $        0.33 
                                                       =============    =============    =============    =============   
</TABLE> 

The accompanying notes are an integral part of these condensed consolidated 
financial statements.

<PAGE>

WILMAR INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - (UNAUDITED)
--------------------------------------------------------------------------------

<TABLE> 
<CAPTION> 
                                                                                                    Total
                                                               Common           Stock         Accumulated       Stockholders'
                                                               Shares           Amount           Deficit           Equity
                                                            -----------     -------------     -------------     -------------
<S>                                                         <C>             <C>               <C>               <C> 
BALANCE, DECEMBER 27, 1996                                   13,048,371     $  96,978,776     $ (21,479,162)    $  75,499,614
                                                                                                
Exercised Stock Options                                         131,485         1,305,796                           1,305,796
                                                                                                
Tax Benefit from Exercised Stock Options                                          660,000                             660,000
                                                                                                
Issuance of Common Stock - Mile High Acquisition                  4,652           100,024                             100,024
                                                                                                
Issuance of Common Stock - Mangement Supply Acquisition         151,246         3,749,388                           3,749,388

Net income                                                                                        9,234,262         9,234,262
                                                            -----------     -------------     -------------     -------------
BALANCE, DECEMBER 26, 1997                                   13,335,754     $ 102,793,984     $ (12,244,900)    $  90,549,084
                                                                                                
Exercised Stock Options                                          40,100           283,978                             283,978
                                                                                                
Tax Benefit from Exercised Stock Options                                          135,500                             135,500
                                                                                                
Issuance of Common Stock - Apartment Cleaning                     5,723           130,713                             130,713
                                                                                                
Net income                                                                                        5,782,036         5,782,036
                                                            -----------     -------------     -------------     -------------
BALANCE, JUNE 26, 1998                                       13,381,577     $ 103,344,175     $  (6,462,864)    $  96,881,311
                                                            ===========     =============     =============     =============
</TABLE> 

The accompanying notes are an integral part of these condensed consolidated 
financial statements.

<PAGE>
<TABLE> 
<CAPTION> 
WILMAR INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - (Unaudited)
-----------------------------------------------------------------------------------------------------------------------
                                                                               FOR THE SIX                FOR THE SIX  
                                                                              MONTHS ENDING              MONTHS ENDING 
                                                                                 JUNE 26,                  JUNE 27,     
                                                                                   1998                      1997        
                                                                            -----------------           ---------------    
<S>                                                                         <C>                         <C> 
OPERATING ACTIVITIES:
   Net Income                                                               $   5,782,035               $   4,318,729     
   Adjustments to reconcile net income to net cash
       provided by operating activities:
       Depreciation and amortization                                              992,508                     585,714        
       Deferred income taxes                                                     (226,000)                    (39,000)       
       Loss on disposition of property and equipment                               11,704                                    
       Changes in assets and liabilities, net of effects of acquisition:                                                     
           Accounts receivable                                                 (3,591,166)                 (3,995,611)       
           Inventory                                                           (6,870,716)                 (2,017,932)       
           Prepaid expenses and other current assets                             (396,669)                    117,102        
           Other assets                                                           223,300                    (632,231)       
           Accounts Payable                                                     4,757,952                   4,001,986        
           Accrued expenses and other current liabilities                       1,278,831                     615,598        
           Income taxes payable                                                   (78,319)                     52,447        
                                                                            -------------               -------------          
                Net cash provided by operating activities                       1,883,460                   3,006,802        
                                                                            -------------               -------------          
 INVESTING ACTIVITIES :                                                                                                      
   Purchase of property and equipment                                            (901,290)                   (983,103)       
   Proceeds from sale of short-term investments                                                             3,395,861        
   Acquisition of business, including escrow                                   (1,747,132)                 (3,988,455)       
   Proceeds from escrow settlement                                                                             82,000           
                                                                            -------------               -------------           
               Net cash used in investing activities                           (2,648,422)                 (1,493,697)       
                                                                            -------------               -------------          
 FINANCING ACTIVITIES :                                                                                                      
   Repayment of note payable                                                      (25,000)                   (260,000)       
   Net proceeds from exercise of stock options                                    283,978                     799,798        
                                                                            -------------               -------------            
                Net cash provided by financing activities                         258,978                     539,798        
                                                                            -------------               -------------            
 NET INCREASE (DECREASE) IN CASH                                                 (505,984)                  2,052,903        
                                                                                                                             
 CASH, BEGINNING OF PERIOD                                                     30,723,746                  38,228,710        
                                                                            -------------               -------------            
 CASH, END OF PERIOD                                                        $  30,217,762               $  40,281,613         
                                                                            =============               =============

 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

   Cash paid during the period for :
       Interest                                                             $       1,673               $      19,802     
                                                                            =============               =============            
       Income taxes                                                         $   4,030,149               $   2,669,100         
                                                                            =============               =============            

 SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING ACTIVITIES
   Issuance of Common Stock in connection with the purchase of :
           Apartment Cleaning Supply and Pool Supply, Inc.                  $     130,713      


   Issuance of Note in connection with the purchase of :
           Pier-Angeli                                                                                  $      75,000              
</TABLE>

 The accompanying notes are an integral part of these condensed consolidated 
                             financial statements.
<PAGE>
 
                            WILMAR INDUSTRIES, INC.

           NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - BASIS OF PRESENTATION
------------------------------

The condensed consolidated financial statements include the accounts of Wilmar
Industries, Inc. ("Wilmar" or the "Company") and its subsidiaries.  Inter-
company balances and transactions have been eliminated.

These financial statements have been prepared in accordance with generally
accepted accounting principles for interim financial information and with the
instructions to Form 10-Q and Article 10-01 of Regulation S-X.  Accordingly,
they do not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements.  In the
opinion of management, such interim statements reflect all adjustments
(consisting of normal recurring adjustments) necessary to present fairly the
financial position and the results of operations and cash flows for the interim
periods presented.  The results of operations for these interim periods are not
necessarily indicative of the results to be expected for the full year ending
December 25, 1998.  These financial statements should be read in conjunction
with the audited consolidated financial statements and footnotes included in the
Company's Form 10-K for the year ended December 26, 1997.

NOTE 2 - ACCOUNTING POLICIES
----------------------------

In June 1997, the Financial Accounting Standards Board ("FASB") issued Statement
of Financial Accounting Standards ("SFAS") No. 130, "Reporting Comprehensive
Income."  This statement establishes standards for reporting and disclosure of
comprehensive income. The Company adopted this statement during the first
quarter of fiscal year 1998.  Adoption of this statement had no impact on the
Company's consolidated financial statements.

In June 1997, the FASB issued SFAS No. 131, "Disclosures about Segments of an
Enterprise and Related Information."  This statement, which establishes
standards for the reporting of information about operating segments and requires
the reporting of selected information about operating segments in interim
financial statements. SFAS No. 131 is required to be applied to interim
financial statements in the initial year of application.  Reclassification of
segment information for earlier periods presented for comparative purposes are
required under SFAS No. 131.  As this statement only requires additional
disclosures in the Company's consolidated financial statements, its adoption
will not have any impact on the Company's consolidated financial position,
results of operations or cash flows. The Company will adopt SFAS No. 131 in its
December 25, 1998 annual financial statements.

In February 1998, the FASB issued SFAS No. 132, "Employers' Disclosures about 
Pensions and Other Postretirement Benefits". This statement, which revises 
certain disclosure requirements for the Company's pension assets and 
obligations, is effective for the fiscal periods beginning after December 15, 
1997. Restatement of prior years' information is required, where available. As 
this statement only requires a change in methods of disclosure and not any 
change in accounting methods, it will not have any impact on the Company's 
consolidated financial position, results of operations or cash flows. The 
Company will adopt SFAS No. 132 in its December 25, 1998 annual financial 
statements.

In March 1998, the AICPA issued Statement of Position ("SOP") 98-1, Accounting
For the Costs of Computer Software Developed For or Obtained for Internal-Use.
The SOP is effective for the Company in 1999. The SOP will require the
capitalization of certain costs incurred after the date of adoption in
connection with developing or obtaining software for internal use. The Company
currently capitalizes certain external consulting costs and expenses all other
costs as incurred. The Company has not yet assessed what the impact of the SOP
will be on the Company's future earnings or financial position.

NOTE 3 - ACQUISITION
--------------------

In March 1998, the Company acquired certain assets of the California based
company American Maintenance Supply, Inc. ("AMS-CA") and in June 1998, the
Company acquired certain assets of the Nevada based company American Maintenance
Supply, Inc. ("AMS-NV"), both are distributors of plumbing supplies primarily to
the multi-family industry or apartment housing market. The total purchase price
of both acquisitions was paid in cash. Goodwill recorded in connection with
these acquisitions is being amortized on a straight-line basis over 40 years.

In June 1998, the Company acquired certain assets of Apartment Cleaning Supply
and Pool Supply, Inc. ("ACSPS"), a distributor of both janitorial and pool
chemicals, supplies and equipment primarily to the multi-family industry or
apartment housing market in the Phoenix area. The purchase price of this
acquisition consisted of cash and common stock of the company. Goodwill and
other intangibles recorded in connection with this acquisition are being
amortized on a straight-line basis over 5 to 40 years.
<PAGE>
 
                            WILMAR INDUSTRIES, INC.

      NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED


NOTE 4 - INCOME TAXES
---------------------

The Company provides for income taxes based upon SFAS No. 109, "Accounting for
Income Taxes", which requires an asset and liability approach to financial
accounting and reporting for income taxes.


NOTE 5 - COMPUTATION OF BASIC AND DILUTED NET INCOME PER SHARE
--------------------------------------------------------------

Net income per share presented for all periods have been computed in accordance
with SFAS No. 128, "Earnings per Share." Data for 1997 has been restated to
conform to SFAS No. 128. Basic net income per share is computed by dividing net
income by the weighted-average number of shares outstanding during the period.
Diluted net income per share is computed by dividing net income by the weighted-
average number of shares outstanding during the period, assuming dilution.

   The amounts used in calculating net income per share data are as follows:

<TABLE> 
<CAPTION> 
                                          For the Three   For the Three  For the Six   For the Six     
                                          Months Ended    Months Ended   Months Ended  Months Ended    
                                          June 26, 1998   June 27, 1998  June 27, 1998 June 27, 1997   
                                          -------------   -------------  ------------- -------------    
<S>                                       <C>             <C>            <C>           <C>             
Net Income                                $   3,108,545    $  2,246,868  $   5,782,036 $   4,318,729   
                                          =============   =============  ============= =============    

Weighted Average Shares
   Outstanding - Basic                       13,362,415      13,078,743     13,349,921    13,063,481
Effective of Dilutive Stock Options             144,735         189,247        146,982       174,784
                                          -------------   -------------  ------------- -------------     
Weighted Average Shares
   Outstanding - Diluted                     13,507,150      13,267,990     13,496,903    13,238,265 
                                          =============   =============  ============= =============     
</TABLE> 

Options to purchase 48,200 and 8,500 shares of common stock that were
outstanding during the three months ended June 26, 1998 and June 27,1997
respectively, as well as the option to purchase 45,825 and 8,500 shares of
common stock that were outstanding during the six months ended June 26, 1998 and
June 27,1997 respectively, were not included in the computation of weighted
average shares outstanding - Diluted because the options' exercise price was
greater than the average market price of common shares.

NOTE 6 - CONTINGENCIES
----------------------

The Company is involved in various legal proceedings in the ordinary course of
its business, which are not anticipated to have a material adverse effect on the
Company's results of operations or financial position.
 
<PAGE>
 
                            WILMAR INDUSTRIES, INC.

ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

This document contains certain forward-looking statements that are subject to
risks and uncertainties.  Forward-looking statements include certain information
relating to future growth plans, the anticipated costs associated with those
plans, the Company's liability and capital resources, as well as information
contained elsewhere in this report where statements are preceded by, followed by
or include the words "believes," "expects," "anticipates" or similar
expressions.  For such statements the Company claims the protection of the safe
harbor for forward-looking statements contained in the Private Securities
Litigation Reform Act of 1995.  Actual events or results may differ materially
from those discussed in forward-looking statements as a result of various
factors, including without limitation, general market conditions, increased
competition, and factors discussed elsewhere in this report and in the documents
incorporated herein by reference.  The following discussion should be read in
conjunction with the interim financial statements and the notes thereto
contained elsewhere in this report on Form 10-Q.

RESULTS OF OPERATIONS

SIX MONTHS ENDED JUNE 26, 1998 COMPARED TO SIX MONTHS ENDED JUNE 27, 1997.

Net Sales.  Net sales increased by $23.6 million, or 33.9%, to $93.2 million for
the six months ended June 26, 1998 from $69.6 million for the corresponding
period in 1997.  This increase was attributable to the maturation of the
existing sales force, sales force additions, the Company's telesales effort,
increased sales to national accounts and a substantial investment in "line-
hauling" (the use of third party trucks to ship multiple orders from a
distribution center to other markets overnight followed by next day local
delivery).  The Company's sales force at the end of the second quarter of 1998
was 201 an increase of 51 when compared with the corresponding quarter of 1997.
Sales attributable to the existing sales force (salesmen employed for all of
both periods) increased 16%.  In addition the acquisitions of Management Supply
Company ("MSC") and certain assets of ACSPS, AMS-CA and AMS-NV which occurred in
September 1997, June 1998, March 1998 and June 1998 respectively, also
contributed significantly to the Company's growth.  Price increases during both
periods were modest and made only on selected items.  During the six months
ended June 26, 1998, Wilmar generated approximately $3.7 million in net sales to
new end markets as a result of the Company's decision to target customers
outside its core apartment housing market beginning in the first quarter of
1995.

Gross Profit.  Cost of sales includes merchandise, freight, distribution center
occupancy and delivery costs.   As a percentage of net sales, gross profit was
28.9% for the six months ended June 26, 1998 compared to 29.8% for the
corresponding period in 1997.  This expected decrease in the gross margin
resulted from the acquisition of MSC.  MSC's gross margins reflect a product mix
that includes a larger volume of major appliance sales, that yield a lower gross
margin percentage. In addition, the increased delivery expenses associated with
"line-hauling" to new markets, as well as higher relative occupancy costs
relating to the operation of the Company's new distribution centers in
Charlotte, San Antonio, Phoenix, Las Vegas and Boston, also contributed to the
decrease in gross margin when compared with the first six months of 1997.

Operating and Selling Expenses.  Operating and selling expenses consist of labor
and other costs associated with operating a distribution center as well as
selling expenses and commissions.  Operating and selling expenses increased by
$3.1 million, or 31.8 %, to $12.9 million for the six months ended June 26, 1998
from $9.8 million for the corresponding period in 1997.  As a percentage of net
sales, these expenses represented 13.8% for the six months ended June 26, 1998
compared to 14.0% for the corresponding period in 1997. This decrease was
primarily attributable to the assimilation of the HMA acquisition in July 1997,
and in addition the acquisition of MSC, which though it had not yet been fully
assimilated into our system until May 1998, had been operated very efficiently
as a stand-alone company.
<PAGE>
 
                            WILMAR INDUSTRIES, INC.

ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS, CONTINUED

RESULTS OF OPERATIONS

SIX MONTHS ENDED JUNE 26, 1998 COMPARED TO SIX MONTHS ENDED JUNE 27, 1997

Corporate General and Administrative Expenses.  Corporate general and
administrative expenses increased by $600,000 or 12.2%, to $5.5 million for the
six months ended June 26, 1998 from $4.9 million for the corresponding period in
1997. This increase is primarily the result of the enhanced staffing required to
manage a larger volume of business. As a percentage of net sales, corporate
general and administrative expenses represented 5.9% for the six months ended
June 26, 1998 compared to 7.1% for the corresponding period in 1997. During the
first six months of 1998, the Company incurred approximately $116,000 in
expenses related to the assimilation of MSC and pre-opening expenses for its new
San Antonio, Las Vegas and Boston distribution centers,  (the "assimilation and
pre-opening expenses"). The Company expenses all distribution center pre-opening
and acquisition assimilation costs when incurred.  Excluding these expenses,
corporate general and administrative expenses as a percentage of net sales would
have been 5.8% for the six months ended June 26, 1998 compared to 6.8% for the
corresponding period in 1997.

Operating Income.  Operating income increased by $2.4 million, or 40.2%, to $8.5
million for the six months ended June 26, 1998 from $6.1million for the
corresponding period in 1997.  As a percentage of net sales, operating income
was 9.1% for the six months ended June 26, 1998 compared to 8.7% for the
corresponding period in 1997.  Excluding the assimilation and pre-opening
expenses, operating income as a percentage of net sales would have been 9.3% for
the six months in 1998 compared to 9.0% for the first six months of 1997.

Interest Income.  Net interest income for the six months ended June 26, 1998 was
$775,000 and $808,000 for the corresponding period in 1997. The interest income
occurred as a result of the investment income from the proceeds of the secondary
public offering completed in July 1996.

THREE MONTHS ENDED JUNE 26, 1998 COMPARED TO THREE MONTHS ENDED JUNE 27, 1997

Net Sales.  Net sales increased by  $13.3 million, or 36.4%, to $49.7 million
for the three months ended June 26, 1998 from $36.4 million for the
corresponding period in 1997. This increase was attributable to the maturation
of the existing sales force, sales force additions, the Company's telesales
effort, increased sales to national accounts and a substantial investment in
"line-hauling".  Sales attributable to the existing sales force (salesmen
employed for all of both periods) increased 20%.  In addition the acquisitions
of MSC and certain assets of ACSPS, AMS-CA and AMS-NV which occurred in
September 1997, June 1998, March 1998 and June 1998 respectively, also
contributed significantly to the Company's growth.  Price increases during both
periods were modest and made only on selected items.  During the three months
ended June 26, 1998, Wilmar generated approximately $2.1 million in net sales to
new end markets as a result of the Company's decision to target customers
outside its core apartment housing market beginning in the first quarter of
1995.

Gross Profit.  Cost of sales includes merchandise, freight, distribution center
occupancy and delivery costs.  As a percentage of net sales, gross profit was
28.8% for the three months ended June 26, 1998 compared to 29.6 % for the
corresponding period in 1997.  This expected decrease in the gross margin was a
result of the following factors: (1) the acquisition of MSC, whose gross margins
reflect a product mix that includes a larger volume of major appliance sales,
that yield a lower gross margin percentage, (2) a larger volume of HVAC sales,
which are seasonal in nature and have lower gross margins, and (3) the higher
relative occupancy costs relating to the operation of the Company's new
distribution centers in San Antonio, Las Vegas and Boston also contributed to
the decrease in gross margin when compared with the three months ended June 27,
1997.
<PAGE>
 
                            WILMAR INDUSTRIES, INC.


ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS, CONTINUED

RESULTS OF OPERATIONS

THREE MONTHS ENDED JUNE 26, 1998 COMPARED TO THREE MONTHS ENDED JUNE 27, 1997

Operating and Selling Expenses.  Operating and selling expenses consist of labor
and other costs associated with operating a distribution center as well as
selling expenses and commissions.  Operating and selling expenses increased by
$1.8 million, or 34.4%, to $6.8 million for the three months ended June 26, 1998
from $5.0 million for the corresponding period in 1997.  As a percentage of net
sales, these expenses represented 13.6% for the three months ended June 26, 1998
compared to 13.8% for the corresponding period in 1997. This decrease was
primarily attributable to the assimilation of the HMA acquisition in July 1997,
and in addition the acquisition of MSC, which though it had not yet been fully
assimilated into our system until May 1998, had been operated very efficiently
as a stand-alone company.

Corporate General and Administrative Expenses. Corporate general and
administrative expenses increased by $290,000, or 11.2%, to $2.9 million for the
three months ended June 26, 1998 from $2.6 million for the corresponding period
in 1997. This increase is primarily the result of the enhanced staffing required
to manage a larger volume of business. The Company expenses all distribution
center pre-opening costs when incurred. During the second quarter of 1998, the
Company incurred approximately $96,000 in expenses related to the assimilation
of MSC and pre-opening expenses for its new San Antonio, Las Vegas and Boston
distribution center. As a percentage of net sales, corporate general and
administrative expenses represented 5.8% for the three months ended June 26,
1998 compared to 7.1% for the corresponding period in 1997. Excluding
assimilation and pre-opening expenses, general and administrative expenses would
represent 5.6% for the three months ended June 26, 1998 and 6.9% for the
corresponding period in 1997.

Operating Income.  Operating income increased by $1.5 million or 47.9%, to $4.7
million for the three months ended June 26, 1998 from $3.2 million for the
corresponding period in 1997.  As a percentage of net sales, operating income
was 9.4% for the three months ended June 26, 1998 and 8.7% for the corresponding
period in 1997.  Excluding assimilation and pre-opening expenses, operating
income as a percentage of net sales would have been 9.6% for the three month
ended June 26,1998 and 8.9% for the same period in 1997.

Interest Income.  Net interest income for the three months ended June 26, 1998
was $392,000 and $426,000 for the corresponding period in 1997. The interest
income occurred as a result of the investment income from the proceeds of the
secondary public offering completed in July 1996.


LIQUIDITY AND CAPITAL RESOURCES

Wilmar's primary source of liquidity has been cash flow from operations,
supplemented by borrowings under its revolving bank line of credit to support
increases in accounts receivable and inventory, net of accounts payable.  Since
its initial public offering in January 1996, additional liquidity has been
provided through the proceeds of the sale of its securities as well as
investment income from the proceeds of the secondary public offering completed
in July 1996.

Cash provided by operating activities was $1.9 million during the six months
ended June 26, 1998 compared to $3.0 million of cash provided by operating
activities during the corresponding period in 1997.  Cash provided by operating
activities during the six months ended June 26, 1998 consisted of $5.8 million
of net income before adding back depreciation and amortization and other non-
cash charges, decreased  $4.9 million by changes in operating assets and
liabilities. This primarily resulted from a $6.0 million increase in accounts
payable and accrued expenses offset by an increase in the accounts receivable,
inventory and prepaid expenses of $10.9 million, consistent with its higher
volume of business.
<PAGE>
 
                            WILMAR INDUSTRIES, INC.


ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS, CONTINUED

Cash used in investing activities during the six months ended June 26, 1998 was
$2.6 million, this consisted of approximately $901,000 for the purchase of
property and equipment and $1.7 million relating to the acquisitions of ACSPS,
AMS-CA and AMS-NV.

Cash provided by financing activities during the first six months of 1998 was
approximately $259,000, consisting of $284,000 of net proceeds received from the
exercise of stock options offset by $25,000 of repayment of a note payable.

Capital expenditures were $901,000 for the six months ended June 26, 1998
compared to $983,000 for the corresponding period in 1997. The Company spent
approximately $485,000 in the first six months of 1998 to equip its new Atlanta,
San Antonio, Las Vegas and Boston distribution centers, as well as upgrading the
existing MSC distribution centers.  A typical distribution center requires a
capital investment of approximately $150,000 to $200,000 for equipment and
leasehold improvements and an initial commitment of approximately $250,000 for
working capital (net of accounts payable attributable to new inventory).  The
Company typically incurs expenses of approximately $60,000 before a new
distribution center becomes operational.  The Company intends to finance its
future capital expenditures with cash flow from operations and possibly with a
portion of the previous public offerings, term debt or capital leases.

Wilmar's credit facilities consist of two unsecured bank lines of credit
totaling $16 million. These lines of credit had zero balances at June 26, 1998.
In July 1998, the Company renewed an existing $10 million unsecured bank line of
credit, which bears interest at three quarter percent below the bank's prime
rate as well as a $6 million unsecured bank line of credit, which bears interest
at the bank's prime rate. These credit facilities will expire in October 1998.
The Company anticipates renewing these existing credit facilities prior to their
expiration date and believes it could increase the amount of these credit
facilities if needed, although there can be no assurance that it could do so on
equally or more favorable terms.

The Company believes that its existing cash balances, supplemented by borrowings
under the revolving line of credit, are adequate to meet planned operating and
capital expenditure needs at least through 1998.  However, if the Company were
to make any significant acquisitions for cash, it may be necessary for the
Company to obtain additional debt or equity financing.

YEAR 2000 COMPLIANCE

The Company recognizes that the arrival of the Year 2000 poses a worldwide
challenge to the ability of all systems to recognize the date change from
December 31, 1999 to January 1, 2000, and like other companies, is assessing and
modifying its computer applications and business processes to provide for their
continued functionality.   Many of the Company's systems include the new
hardware and software recently purchased from large vendors who have represented
that these systems are already Year 2000 compliant.  The Company expects to
complete its Year 2000 assessment and remediation by 1999.  However, there can
be no guarantee that the systems of other companies with which the Company
interfaces will be timely converted, or that a failure to convert by another
company would not have a material adverse effect on the Company.

The total cost to the Company of these Year 2000 activities has not been and is
not anticipated to be material to its financial position, results of operations
or cash flows in any given year, and such cost has been and is expected to
continue to be funded from the Company's operations.
<PAGE>
 
                            WILMAR INDUSTRIES, INC.

PART II -- OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

 Not applicable.

ITEM 2.  CHANGES IN SECURITIES

 Not applicable.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

 Not applicable.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

 Not applicable.

ITEM 5.  OTHER INFORMATION

 Not applicable.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

 (a)  Exhibits
      --------

 27*     Financial Data Schedule
 
___________________
*  Filed herewith


   (B) REPORTS ON FORM 8-K
       -------------------

   The Company did not file a Form 8-K during the quarter ended June 26, 1998.
<PAGE>
 
                                   SIGNATURE

     Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.


                                   WILMAR INDUSTRIES, INC.



                                   BY:  /s/ Michael T. Toomey
                                      ---------------------------------------
                                       Michael T. Toomey
                                       Chief Financial Officer and Treasurer
                                       (Duly authorized officer and
                                       Principal financial officer)


Date:   August 10, 1998