<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 30, 1999

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

                         Commission file number 0-19891

                               SCHULER HOMES, INC.
             (Exact name of registrant as specified in its charter)

           Delaware                           99-0293125
  (State or jurisdiction of                  (I.R.S. employer
incorporation or organization)              identification no.)

                         828 Fort Street Mall, Suite 400
                           Honolulu, Hawaii 96813-4321
               (Address of principal executive offices) (Zip code)

                                 (808-521-5661)
              (Registrant's telephone number, including area code)

                                 Not Applicable
              (Former name, former address and former fiscal year,
                          if changed since last report)

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 filing requirements for the past 90 days.

         YES   X       NO
              ---          ---

Indicate the number of shares outstanding of each of the issuer=s classes of
common stock, as of the latest practicable date.


                                                              Outstanding at
        Class of Common Stock                                 July 31, 1999
        ---------------------                                ---------------
            $.01 par value                                      20,049,572




<PAGE>



-------------------------------------------------------------------------------

                               SCHULER HOMES, INC.

                                      INDEX


PART I.   FINANCIAL INFORMATION

Item 1.   Financial Statements

          Independent Accountants' Review Report .........................    3

          Consolidated Balance Sheets - June 30, 1999 and
                December 31, 1998 ........................................    4

          Consolidated Statements of Income - Three and six months
                ended June 30, 1999 and 1998 .............................    5

          Consolidated Statements of Cash Flows - Six
                months ended June 30, 1999 and 1998 ......................    6

          Notes to Consolidated Financial Statements .....................    7

Item 2.   Management's Discussion and Analysis of
               Financial Condition and Results of Operations .............   11

PART II.  OTHER INFORMATION ..............................................   20

SIGNATURES ...............................................................   22


                                       2

<PAGE>

                     INDEPENDENT ACCOUNTANTS' REVIEW REPORT


The Board of Directors and Stockholders
Schuler Homes, Inc.

We have reviewed the accompanying interim consolidated balance sheet of
Schuler Homes, Inc. as of June 30, 1999, and the related consolidated
statements of income for the three-month and six-month periods ended June 30,
1999 and 1998, and the consolidated statements of cash flows for the
six-month periods ended June 30, 1999 and 1998. These financial statements
are the responsibility of the Company's management.

We conducted our reviews in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures
to financial data, and making inquiries of persons responsible for financial
and accounting matters. It is substantially less in scope than an audit
conducted in accordance with generally accepted auditing standards, which
will be performed for the full year with the objective of expressing an
opinion regarding the financial statements taken as a whole. Accordingly, we
do not express such an opinion.

Based on our reviews, we are not aware of any material modifications that
should be made to the accompanying interim consolidated financial statements
referred to above for them to be in conformity with generally accepted
accounting principles. See Note 1.

We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet of Schuler Homes, Inc. as of
December 31, 1998, and the related consolidated statements of operations,
stockholders' equity, and cash flows for the year then ended (not presented
herein) and in our report dated March 15, 1999, we expressed an unqualified
opinion on those consolidated financial statements. In our opinion, the
information set forth in the accompanying consolidated balance sheet as of
December 31, 1998, is fairly stated, in all material respects, in relation to
the consolidated balance sheet from which it has been derived.

                                                 ERNST & YOUNG LLP


Honolulu, Hawaii
August 9, 1999


                                       3

<PAGE>

                               SCHULER HOMES, INC.
                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                                   JUNE 30,1999       DECEMBER 31, 1998
                                                                                   ------------       -----------------
                                                                                   (UNAUDITED)
<S>                                                                               <C>                 <C>
ASSETS

Cash and cash equivalents (restricted-Note 1) ............................        $   5,414,000         $   4,915,000
Real estate inventories (Note 2) .........................................          402,602,000           325,166,000
Investments in unconsolidated joint ventures (Note 3) ....................            7,748,000            23,998,000
Deferred income taxes ....................................................            3,555,000             3,957,000
Intangibles, net .........................................................           13,684,000            13,879,000
Other assets (Note 3) ....................................................           15,697,000            13,628,000
                                                                                  -------------         -------------

Total assets .............................................................        $ 448,700,000         $ 385,543,000
                                                                                  =============         =============

LIABILITIES AND STOCKHOLDERS' EQUITY

Accounts payable .........................................................        $  26,394,000         $  15,954,000
Accrued expenses .........................................................           17,961,000            16,703,000
Notes payable to banks (Note 4) ..........................................           60,000,000            17,365,000
Notes payable to others ..................................................            2,550,000             3,954,000
9% senior notes due 2008 .................................................           98,591,000            98,512,000
6-1/2% convertible subordinated debentures due 2003 ......................           57,500,000            57,500,000
                                                                                  -------------         -------------

Total liabilities ........................................................          262,996,000           209,988,000

Commitments and contingencies (Notes 4 and 5)

Minority interest in consolidated subsidiary (Note 3) ....................            1,423,000                   ---

Stockholders' equity (Note 6):
    Common stock, $.01 par value; 30,000,000 shares authorized;
       20,928,158 and 20,892,465 shares issued at June 30, 1999
       and December 31, 1998, respectively ...............................              209,000               209,000
    Additional paid-in capital ...........................................           93,430,000            93,201,000
    Retained earnings ....................................................           99,228,000            87,762,000
    Treasury stock, at cost; 1,278,400 and 869,000 shares
       at June 30, 1999 and December 31, 1998, respectively ..............           (8,586,000)           (5,617,000)
                                                                                  -------------         -------------

Total stockholders' equity ...............................................          184,281,000           175,555,000
                                                                                  -------------         -------------

Total liabilities and stockholders' equity ...............................        $ 448,700,000         $ 385,543,000
                                                                                  =============         =============
</TABLE>
                             See accompanying notes.

                                       4
<PAGE>

                                SCHULER HOMES, INC.
                        CONSOLIDATED STATEMENTS OF INCOME

<TABLE>
<CAPTION>
                                                                      THREE MONTHS ENDED JUNE 30,       SIX MONTHS ENDED JUNE 30,
                                                                      ---------------------------       -------------------------
                                                                         1999             1998            1999             1998
                                                                       --------         --------        --------          -------
                                                                              (UNAUDITED)                     (UNAUDITED)
<S>                                                                <C>              <C>              <C>              <C>
Residential real estate sales ..................................   $ 131,623,000    $  67,433,000    $ 227,516,000    $ 122,945,000

Costs and expenses:
    Residential real estate sales ..............................     104,580,000       53,971,000      179,794,000       97,858,000
    Selling and commissions ....................................       8,373,000        4,672,000       14,522,000        8,592,000
    General and administrative .................................       6,488,000        3,750,000       11,895,000        7,520,000
                                                                   -------------    -------------    -------------    -------------
        Total costs and expenses ...............................     119,441,000       62,393,000      206,211,000      113,970,000
                                                                   -------------    -------------    -------------    -------------
    Operating income ...........................................      12,182,000        5,040,000       21,305,000        8,975,000
Income from unconsolidated joint ventures ......................         264,000          438,000          337,000          796,000
Minority interest in pretax income of consolidated
  subsidiary (Note 3) ..........................................         (80,000)              --         (173,000)              --
Other income (expense) (Note 4) ................................      (1,506,000)        (838,000)      (2,867,000)      (1,874,000)
                                                                   -------------    -------------    -------------    -------------
   Income before provision for income taxes ....................      10,860,000        4,640,000       18,602,000        7,897,000
Provision for income taxes (Note 7) ............................       4,184,000        1,788,000        7,136,000        3,044,000
                                                                   -------------    -------------    -------------    -------------
   Net income ..................................................   $   6,676,000    $   2,852,000    $  11,466,000    $   4,853,000
                                                                   =============    =============    =============    =============
Net income per share (Note 8):
   Basic and diluted ...........................................   $        0.34    $        0.14    $        0.57    $        0.24
                                                                   =============    =============    =============    =============
</TABLE>

                             See accompanying notes.

                                       5
<PAGE>

                               SCHULER HOMES, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                                 SIX MONTHS ENDED JUNE 30,
                                                                                                 -------------------------
                                                                                                   1999            1998
                                                                                                 --------        --------
                                                                                                        (UNAUDITED)
<S>                                                                                          <C>               <C>
OPERATING ACTIVITIES:
Net income ..............................................................................    $  11,466,000     $   4,853,000
Adjustments to reconcile net income to net cash provided by (used in)
   operating activities:
     Depreciation and amortization expense ..............................................        2,061,000         1,545,000
     (Income) loss from unconsolidated joint ventures ...................................         (239,000)         (707,000)
     Principal payments of notes receivable .............................................          658,000           121,000
     Minority interest ..................................................................          173,000               ---
Changes in assets and liabilities, net of effects of purchase of additional 40%
   interest in Stafford:
     (Increase) decrease in real estate inventories .....................................      (25,867,000)      (21,737,000)
     (Increase) decrease in other assets ................................................         (534,000)       (1,786,000)
     Increase (decrease) in accounts payable ............................................        5,564,000         1,658,000
     Increase (decrease) in accrued expenses ............................................        3,208,000         1,200,000
     Change in deferred income taxes ....................................................          402,000          (104,000)
                                                                                             -------------     -------------
       Net cash provided by (used in) operating activities ..............................       (3,108,000)      (14,957,000)

INVESTING ACTIVITIES:
Purchase of additional 40% interest in Stafford, net of cash acquired ...................       (4,227,000)              ---
Acquisition of certain assets of Keys Homes .............................................       (1,000,000)              ---
Advances to unconsolidated joint ventures ...............................................         (123,000)       (5,109,000)
Repayments of advances to unconsolidated joint ventures .................................          885,000            59,000
Capital distributions from unconsolidated joint ventures ................................          659,000         2,470,000
Purchase of furniture, fixtures, and equipment ..........................................         (771,000)         (155,000)
                                                                                             -------------     -------------
       Net cash provided by (used in) investing activities ..............................       (4,577,000)       (2,735,000)

FINANCING ACTIVITIES:
Proceeds from bank borrowings ...........................................................      138,291,000        93,289,000
Principal payments on bank borrowings ...................................................      (95,656,000)     (171,016,000)
Principal payments on notes payables to others ..........................................       (1,412,000)       (1,709,000)
Proceeds from issuance of senior notes, net of discount .................................              ---        98,408,000
Refinancing of Stafford's debt ..........................................................      (29,378,000)              ---
Advance to affiliate (Note 3) ...........................................................       (1,000,000)              ---
Net decrease in discount on issuance of senior notes ....................................           79,000            24,000
Proceeds from issuance of common stock from exercise of stock options ...................           64,000            36,000
Proceeds from issuance of common stock under Employee Stock Purchase Plan ...............          165,000               ---
Reacquisition of the Company's common stock .............................................       (2,969,000)              ---
                                                                                             -------------     -------------
        Net cash provided by (used in) financing activities .............................        8,184,000        19,032,000
                                                                                             -------------     -------------

Increase (decrease) in cash .............................................................          499,000         1,340,000
Cash and cash equivalents (restricted) at beginning of period ...........................        4,915,000         3,842,000
                                                                                             -------------     -------------
Cash and cash equivalents (restricted) at end of period .................................    $   5,414,000     $   5,182,000
                                                                                             =============     =============
</TABLE>

                             See accompanying notes.

                                       6
<PAGE>

                               SCHULER HOMES, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)


1.  General

    The accompanying unaudited consolidated 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 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,
    all adjustments (consisting of normal recurring adjustments) considered
    necessary for a fair presentation have been included.

    These financial statements should be read in conjunction with the Notes to
    Consolidated Financial Statements for the year ended December 31, 1998
    contained in the Company's 1998 annual report on Form 10-K.

    The Company has experienced, and expects to continue to experience,
    significant variability in quarterly sales and net income. The results of
    any interim period are not necessarily indicative of the results that can
    be expected for the entire year.

    The preparation of financial statements in conformity with generally
    accepted accounting principles requires management to make estimates and
    assumptions that affect the reported amounts of assets and liabilities and
    disclosure of contingent assets and liabilities at the date of the
    financial statements and the reported amounts of revenues and expenses
    during the reporting period. Actual results could differ from those
    estimates.

    Certain amounts in the Consolidated Financial Statements relating to 1998
    have been reclassified to conform to the 1999 presentation.

    Included in Cash and Cash Equivalents at June 30, 1999 is a restricted
    amount of $718,000, which primarily represents a collection allowance
    resulting from the sale of second mortgage notes.


2.  Real Estate Inventories

    Inventories which are substantially completed are carried at the lower of
    cost or fair value less cost to sell. Fair value is determined by applying
    a risk adjusted discount rate to estimates of future cash flows. In
    addition, land held for future development or inventories under current
    development are adjusted to fair value, only if an impairment to their
    value is indicated.

    The estimates of future cash flows require significant judgment relating to
    the level of sales prices, rate of new home sales, amount of marketing
    costs and price discounts needed in order to stimulate sales, rate of
    increase in the cost of building materials and labor, introduction of
    building code modifications, and economic and real estate market conditions
    in general. Accordingly, there exists at any date, a reasonable possibility
    that changes in estimates will occur in subsequent periods.

                                       7

<PAGE>

    Real estate inventories at June 30, 1999 consist of the following:

       Unimproved land held for future development ............     $40,478,000
       Development projects in progress .......................     323,567,000
       Completed inventory (including lots held for sale) .....      38,557,000
                                                                    -----------
                                                                   $402,602,000

    Completed inventory includes residential units which are substantially
    ready for occupancy.


3.  Related Party Transactions

    In January 1999, the Company exercised its option to purchase an additional
    40% ownership interest in Stafford Homes (Stafford), increasing its total
    ownership to 89%. As a result, the financial statements of Stafford for the
    three-month and six-month periods ended June 30, 1999 are consolidated with
    those of the Company. In connection with this transaction, the Company
    refinanced Stafford's existing debt, which included $1,251,000 in certain
    notes payable to affiliates of Stafford.

    Stafford leases its main office building from an affiliate of its
    President. The Company also leases its main office in Oregon from a family
    member of the Division President of the Oregon Division. During the quarter
    ended June 30, 1999, the Company incurred total rental expense in
    connection with such leases of approximately $29,000.

    In connection with the acquisition of certain assets of Keys Homes, Inc.
    (Keys) in October 1998, the Division President of the Company's Oregon
    Division (formerly the president of Keys) earns a percentage of the profits
    of the Oregon Division. In addition, included in Other Assets at June 30,
    1999 is a note receivable of $1,000,000 from the Oregon Division President,
    which was issued on January 4, 1999, is due on December 31, 2005, bears
    interest at 7%, and requires minimum annual payments of $200,000 plus
    accrued but unpaid interest. Accrued interest receivable relating to the
    note was approximately $35,000 at June 30, 1999.

    From time to time, the Company engages the law firms in which directors of
    the Company are partners. During the quarterly period ended June 30, 1999,
    legal fees of approximately $20,000 to such firms were incurred by the
    Company.


4.  Notes Payable to Banks

    In July 1999, the Company increased its Revolving Credit Facility with a
    consortium of banks from $90,000,000 to $120,000,000. The Company has a
    one-time option to reduce the amount of the facility by $30,000,000 on an
    irrevocable basis, provided the facility has been increased to $120,000,000
    for at least six months. The facility expires on July 1, 2002 and includes
    an option for the lenders to extend the term for an additional year as of
    July 1 of each year. The Company can select an interest rate based on
    either LIBOR (1, 2, 3 or 6 month term) or prime for each borrowing. Based
    on the Company's leverage ratio, as defined, the interest rate may vary
    from LIBOR plus 1.5% to 2% or prime plus 0% to 0.25%. The Company's ability
    to draw upon its line of credit is dependent upon meeting certain financial
    ratios and covenants. As of June 30, 1999, the Company met such financial
    ratios and covenants.

    The Company has an interest rate swap to pay a fixed rate of 5.75% on
    $30,000,000, while receiving in return an interest payment at a floating
    one-month LIBOR. However, if the one-month LIBOR resets at or above 7%,
    the swap reverses for that payment period and no interest payments are
    exchanged. This interest rate swap terminates on August 1, 2003.
    Effective August 9, 1999 through August 9, 2002, the Company entered into an
    interest rate swap to pay interest at a floating one-month LIBOR (5.21% on
    initial effective date) on $30,000,000, while receiving in return an
    interest payment at a fixed rate of 6.31%. The interest rate differential
    on these swaps to be received or paid is recognized during the period as an
    adjustment to interest incurred.


                                       8

<PAGE>

    Notes Payable to Banks at June 30, 1999 consist of borrowings under its
    credit facilities. At June 30, 1999, the Company's bank borrowings were at
    interest rates of prime (7.75%) and LIBOR plus 1.5% (6.4% to 6.5%). At June
    30, 1999, $30,000,000 of the Company's line of credit is unused, of which
    $6,466,000 is restricted for outstanding but unused letters of credit.

    In April 1999, the Company entered into a separate 90-day $10,000,000 line
    of credit with one of the banks included in the $120,000,000 Revolving
    Credit Facility. In July 1999, the Company extended this line of credit for
    an additional 90 days.

    The interest amounts in this paragraph relate to Notes Payable to Banks,
    Notes Payable to Others, Senior Notes and the Convertible Subordinated
    Debentures. The Company paid interest of approximately $5,665,000 during
    the quarter ended June 30, 1999. Interest incurred during the quarter ended
    June 30, 1999 was approximately $4,471,000. All of such interest was
    capitalized to real estate inventories except for $657,000, which was
    expensed (included in Other Income (Expense)) and not capitalized, as such
    interest did not meet the requirements for capitalization. Interest,
    previously capitalized to real estate inventories, expensed as a component
    of Cost of Residential Real Estate Sales during the quarter ended
    June 30, 1999 totaled $4,400,000.


5.  Commitments and Contingencies

    At June 30, 1999, the Company had under contract to purchase for
    approximately $4,000,000, land for residential development.

    In April 1996, the Company was served with a purported class action
    complaint by owners of units and the Association of Owners of Fairway
    Village at Waikele alleging, among other things, material construction
    defects and deficiencies, misrepresentations regarding the cost of
    insurance and breach of a covenant of good faith and fair dealing.
    Following the Courts' denial of a class certification request, a second
    action involving other homeowners at Fairway Village advancing the same
    claims was initiated. While the Company believed the claims to be largely
    without merit, during April 1999, a settlement agreement was entered into
    by the Company, third party defendants, insurance carriers and all of the
    plaintiffs in both lawsuits, except for the owners of three units. The
    settlement amount incurred by the Company will be charged against the
    warranty accruals previously established by the Company. Although the cost
    of remediation for certain units called for under the settlement agreement
    is not determinable until the work is completed, the Company believes that
    the cost of such work will not exceed its warranty accruals. A new trial
    date in December 1999 has been set for the initial suit, which has two
    remaining plaintiffs. No trial date has been set in the second action,
    which includes one remaining plaintiff. Such matters, if decided adversely
    to the Company, would not, in the opinion of management, have a material
    adverse effect on the financial condition of the Company.

    The Company is also from time to time involved in routine litigation or
    threatened litigation arising in the ordinary course of its business. Such
    matters, if decided adversely to the Company, would not, in the opinion of
    management, have a material adverse effect on the financial condition of
    the Company.


6.  Stockholders' Equity

    During the quarter ended June 30, 1999, options were exercised, resulting
    in the issuance of 6,130 shares of common stock.

    In November 1998, the Company adopted a stock repurchase program to
    reacquire up to an aggregate of $10,000,000 of its outstanding common stock
    through August 30, 1999. During the quarter ended June 30, 1999, the
    Company repurchased 409,400 shares at a cost of $2,968,150, resulting in
    504,400 total shares purchased under


                                       9
<PAGE>

    the program at a total cost of $3,585,650.


7.  Income Taxes

    During the three months ended June 30, 1999, the Company made income tax
    payments of $5,616,000.


8.  Net Income Per Share

    Basic net income per share for the quarter and six months ended June 30,
    1999 were computed using the weighted average number of common shares
    outstanding during the periods of 19,899,338 and 19,967,070, respectively.
    Basic net income per share for the quarter and six months ended June 30,
    1998 were computed using the weighted average number of common shares
    outstanding during the periods of 20,104,653 and 20,102,800, respectively.

    The computation of diluted net income per share for the three-month and
    six-month periods ended June 30, 1999 and 1998 resulted in amounts greater
    than the basic net income per share. Accordingly, the basic net income per
    share is also presented as the diluted net income per share.


9.  Subsequent Events

    In July 1999, the Company acquired certain assets of a homebuilder that
    operates in Southern California and Arizona, thereby establishing two
    new divisions of the Company. The owners of the seller will retain an
    interest in the profits of the two new divisions, until the sooner of the
    occurrence of certain agreed upon events or December 31, 2004, which may be
    extended to December 31, 2006. In connection with the acquisition, the
    Company issued 400,000 shares of its common stock and provided a loan to
    the seller in the amount of $4,810,000. The loan is due on December 31,
    2004 and bears interest at 7%.

    In July 1999, the Company entered into an interest rate swap agreement.
    Refer to Note 4.

                                       10

<PAGE>

                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS


    Except for historical information contained herein, matters discussed in
Management's Discussion and Analysis of Financial Condition and Results of
Operations contain "forward-looking statements" within the meaning of the
Private Securities Litigation Act of 1995 that involve risks and
uncertainties. The Company's actual results may differ materially from the
results discussed in the forward-looking statements. Forward-looking
statements are based on various factors and assumptions that include risks
and uncertainties, including, but not limited to the costs and achievability
of Year 2000 compliance, the closing and profitability of sales in backlog
reported, the market for homes generally and in areas where the Company
operates, the availability and cost of land, changes in economic conditions
and interest rates, increases in raw material and labor costs, consumer
confidence, government regulation, weather conditions and general competitive
factors, all or each of which may cause actual results to differ materially.
In addition, other factors that might cause such a difference include other
risks detailed in the Company's Annual Report on Form 10-K and other
documents filed by the Company with the Securities and Exchange Commission
from time to time.

OVERVIEW

    Schuler Homes, Inc. designs, constructs, markets and sells single-family
residences, townhomes and condominiums primarily to entry-level and
first-time move-up buyers. The Company operates in five geographic markets:
Colorado, Hawaii, Northern California, Oregon and Washington.

    For the quarter ended June 30, 1999, sales of residential real estate
(revenue) were $131.6 million and operating income was $12.2 million,
compared to revenues of $67.4 million and operating income of $5.0 million
during the second quarter last year. Net income was $6.7 million ($0.34 per
share) for the quarter ended June 30, 1999, compared to net income of $2.9
million ($0.14 per share) during the 1998 second quarter. From the second
quarter of 1998 to the second quarter of 1999, revenues grew 95.2%, net
income grew 134.1%, the number of units closed increased from 433 to 706 and
operating profit margins improved from 7.5% to 9.3%.

    In July 1999, the Company acquired certain assets of Rielly Homes, Inc.,
a homebuilder in Southern California and Phoenix, Arizona. Rielly Homes, Inc.
("Rielly"), founded by Tom Rielly in 1986, has delivered over 3,000 homes,
focusing primarily on the entry-level, and first and second move-up markets.
In 1998, Rielly closed the sales of approximately 165 homes, generating
revenues of approximately $50.6 million.

                                       11

<PAGE>

RESULTS OF OPERATIONS

The following tables set forth, for the periods indicated, the percentage of
the Company's revenues represented by each income statement line item
presented.

<TABLE>
<CAPTION>
                                                                                THREE MONTHS ENDED    % CHANGE IN DOLLAR
                                                                                     JUNE 30,            AMOUNTS FROM
                                                                               1999           1998       1998 TO 1999
                                                                               ----           ----       ------------
<S>                                                                           <C>            <C>         <C>
Residential real estate sales ........................................        100.0%         100.0%          95.2%

Costs and expenses:
    Residential real estate sales ....................................         79.4           80.0           93.8
    Selling and commissions ..........................................          6.4            6.9           79.2
    General and administrative .......................................          4.9            5.6           73.0
                                                                               -----          -----
              Total costs and expenses ...............................         90.7           92.5           91.4
                                                                               -----          -----
Operating income .....................................................          9.3            7.5          141.7
Income from unconsolidated joint ventures ............................          0.2            0.6          (39.7)
Minority interest in pretax income of consolidated subsidiary ........         (0.1)           ---           ---
Other income (expense) ...............................................         (1.1)          (1.2)          79.7
                                                                               -----          -----
Income before provision for income taxes .............................          8.3            6.9          134.1
Provision for income taxes ...........................................          3.2            2.7          134.0
                                                                               -----          -----
    Net income .......................................................          5.1%           4.2%         134.1
                                                                               =====          =====
</TABLE>

<TABLE>
<CAPTION>
                                                                                SIX MONTHS ENDED       % CHANGE IN DOLLAR
                                                                                     JUNE 30,             AMOUNTS FROM
                                                                              1999            1998        1998 to 1999
                                                                              ----            ----        ------------
<S>                                                                           <C>            <C>          <C>
Residential real estate sales ........................................        100.0%         100.0%          85.1%

Costs and expenses:
    Residential real estate sales ....................................         79.0           79.6           83.7
    Selling and commissions ..........................................          6.4            7.0           69.0
    General and administrative .......................................          5.2            6.1           58.2
                                                                              -----          -----
              Total costs and expenses ...............................         90.6           92.7           80.9
                                                                              -----          -----
Operating income .....................................................          9.4            7.3          137.4
Income from unconsolidated joint ventures ............................          0.2            0.6          (57.7)
Minority interest in pretax income of consolidated subsidiary ........         (0.1)           ---           ---
Other income (expense) ...............................................         (1.3)          (1.5)          53.0
                                                                              -----          -----
Income before provision for income taxes .............................          8.2            6.4          135.6
Provision for income taxes ...........................................          3.2            2.5          134.4
                                                                              -----          -----
    Net income .......................................................          5.0%           3.9%         136.3
                                                                              =====          =====
</TABLE>


 RESIDENTIAL REAL ESTATE SALES

     The Company's Residential Real Estate Sales (revenues) for the quarter
ended June 30, 1999 were approximately


                                      12

<PAGE>

$131.6 million as compared to approximately $67.4 million during the quarter
ended June 30, 1998. This represents an increase of approximately $64.2
million or 95.2%. The increase in revenues reflects a larger number of unit
sales closed at higher average sales prices in the second quarter of 1999
relative to the second quarter of 1998. The Company's average sales price per
unit increased to $193,000 during the 1999 second quarter, an increase from
an average sales price per unit during the 1998 second quarter of $182,000.

     As a result of the increase in the Company's ownership of Stafford to
89% in early 1999, the operating results of Stafford are consolidated with
those of the Company during the quarter and six months ended June 30, 1999,
contributing to the Company's higher 1999 revenues and average sales prices
as compared to 1998. Stafford's average sales price of home sales closed was
$229,000 during the quarter ended June 30, 1999.

     The Company's sales of residential real estate (revenues) were
approximately $227.5 million for the six months ended June 30, 1999, compared
to $122.9 million during the same period in 1998, an increase of 85.1%. The
increase is attributable to the increase in the number and average sales
price of unit sales closed during the first six months of 1999 compared to
the first six months of 1998. The average sales price per unit closed was
$191,000 during the six months ended June 30, 1999, compared to $177,000
during the six months ended June 30, 1998.

     The following table sets forth the number of sales closed during the
three-month and six-month periods ended June 30, 1999 and 1998, which
includes 100% of the sales closed at projects developed by the Company's
joint ventures.

<TABLE>
<CAPTION>
                                              Three months ended June 30,            Six months ended June 30,
                                                 1999             1998               1999                 1998
                                                 ----             ----               ----                 ----
    <S>                                          <C>              <C>                <C>                  <C>
    Consolidated:
      Colorado                                    360              243                656                  485
      Hawaii (1)                                  93               94                 158                  153
      Northern California                         60               20                  83                   35
      Oregon                                      98               14                 158                   24
      Washington (3)                              71               ---                128                   ---
                                                  --               ---                ---                   ---
        Total Consolidated                        682              371               1,183                 697

    Unconsolidated Joint Ventures:
      Hawaii (2)                                   4                7                  11                   10
      Washington (3)                              --               55                  --                  116
      Colorado (4)                                20               ---                 20                  ---
                                                  --               ---                 --                  ---

    Total                                         706              433               1,214                 823
                                                  ===              ===               =====                 ===
</TABLE>

(1)  The amount for the six months ended June 30, 1999 excludes 11 sales that
     closed prior to January 1, 1999 under the Company's "zero-down" sales
     program, for which the second mortgage notes were sold during the 1999
     first quarter.
(2)  Reflects 100% of the information with respect to the Company's two 50%
     owned joint ventures in Hawaii,
     Iao Partners and Waiakoa Estates Subdivision Joint Venture.
(3)  Reflects 100% of the information with respect to Stafford Homes, in which
     the Company acquired a 49% interest in July 1997. In January 1999, the
     Company increased its ownership interest in Stafford Homes to 89%.
(4)  Reflects 100% of the information with respect to the Company's 50%-owned
     joint venture in Colorado, The Ranch-Southpointe II LLC, which was entered
     into in July 1998.

COSTS AND EXPENSES -- RESIDENTIAL REAL ESTATE SALES

     Cost of Residential Real Estate Sales represents the acquisition and
development costs of a project attributable to the homes closed. Acquisition
and development costs primarily include land acquisition costs, sitework and
construction payments to contractors, engineering and architectural costs,
loan fees, interest and other indirect costs attributable to


                                       13
<PAGE>

development and project management activities and miscellaneous construction
costs.

     Cost of Residential Real Estate Sales increased from approximately $54.0
million during the quarter ended June 30, 1998 to approximately $104.6
million during the same period in 1999, representing an increase of
approximately $50.6 million or 93.8%. This increase reflects a higher level
of unit and dollar sales closed during the second quarter of 1999 relative to
the second quarter of 1998 and the consolidation of Stafford's operating
results with those of the Company during the quarter ended June 30, 1999. As
a percentage of revenues, Cost of Residential Real Estate Sales decreased
from 80.0% to 79.4%. This decrease is largely attributable to higher average
selling prices in the Company's Colorado division.

     The cost of residential real estate sold increased from approximately
$97.9 million during the six months ended June 30, 1998 to approximately
$179.8 million during the same period in 1999, representing an increase of
approxi-mately $81.9 million or 83.7%, primarily reflecting a higher level of
unit and dollar sales closed during the first six months of 1999 relative to
the same period in 1998.

     The cost of residential real estate sold as a percentage of sales
decreased from 79.6% for the six months ended June 30, 1998 to 79.0% for the
six months ended June 30, 1999. The decrease in the cost of residential real
estate sold as a percentage of sales reflects higher margins realized by the
Colorado division.

     Total interest incurred during the quarters ended June 30, 1999 and 1998
was approximately $4.5 million and $3.4 million, respectively. The increase
in interest incurred reflects the higher level of average debt outstanding.
Of the amounts incurred, approximately $657,000 and $614,000 was expensed
currently (included in Other Income (Expense)), in the second quarters of
1999 and 1998, respectively, and the remaining interest incurred was
capitalized to development projects. Interest capitalized to projects is
expensed through Cost of Residential Real Estate Sales as sales are closed
and revenue is recognized in the particular project. The amount of previously
capitalized interest, which was expensed through Cost of Residential Real
Estate Sales, totaled $4.4 million and $2.3 million during the quarters ended
June 30, 1999 and 1998, respectively.

     Average debt outstanding was approximately $231.3 million and $172.0
million during the second quarters of 1999 and 1998, respectively, reflecting
the increase in debt outstanding associated with the increase in the
Company's ownership in Stafford and simultaneous refinancing of Stafford's
debt, as well as the higher volume of inventories in the Company's U.S.
mainland divisions. The Company's average interest rate on its debt for the
quarters ended June 30, 1999 and 1998 was approximately 7.8% and 7.9%,
respectively. The Company's Notes Payable to Banks bear interest based on
prime or LIBOR. Changes in the prime or LIBOR rates will affect the amount of
interest being capitalized to inventory and subsequently expensed through
Cost of Residential Real Estate Sales as sales are closed and revenue is
recognized.

COST AND EXPENSES - SELLING AND COMMISSIONS

     Selling costs and commissions represented approximately 6.4% and 6.9% of
sales of residential real estate during the quarters ended June 30, 1999 and
1998, respectively. Selling costs and commissions represented approximately
6.4% and 7.0% of sales of residential real estate during the six months ended
June 30, 1999 and 1998, respectively. These decreases are a result of the
selling costs and commissions increasing at a lower rate than revenues.

COSTS AND EXPENSES - GENERAL AND ADMINISTRATIVE

     General and Administrative Expenses include salaries, office and other
administrative costs. Indirect costs attributable to specific projects are
capitalized and deducted as part of cost of residential real estate sales.

     General and Administrative Expenses increased by $2.7 million during the
second quarter of 1999 as compared to the same period in 1998 primarily due
to expansion at the Company's U. S. mainland divisions and the consolidation
of Stafford's operating results with those of the Company during the quarter
and six months ended June 30, 1999. As a percentage of sales, General and
Administrative Expenses decreased from 5.6% during the quarter ended June 30,
1998 to 4.9% during the quarter ended June 30,


                                       14
<PAGE>

1999. This decrease is a result of General and Administrative Expenses
increasing at a lower rate than revenues.

     General and Administrative Expenses increased by $4.4 million or 58.2%
during the first half of 1999 as compared to the same period in 1998. As a
percentage of sales, General and Administrative Expense decreased from 6.1%
during the first half of 1998 to 5.2% during the first half of 1999. This
decrease is a result of General and Administrative Expenses increasing at a
lower rate than revenues.

INCOME FROM UNCONSOLIDATED JOINT VENTURES

      During the first two quarters of 1999, Income from Unconsolidated Joint
Ventures represents the Company's 50% interest in the operations of two joint
ventures in Hawaii, and during the second quarter of 1999, the Company's 50%
interest in its joint venture in Colorado. During the comparable periods in
1998, Income from Unconsolidated Joint Ventures represented the Company's 49%
interest in the operations of Stafford in addition to its 50% interest in the
operations of two joint ventures in Hawaii. The decrease in this income from
the first three and six months of 1998 to the same period in 1999 is
primarily the result of Stafford being accounted for as a consolidated
subsidiary for the quarter and six months ended June 30, 1999, rather than an
unconsolidated joint venture, due to the increase of the Company's ownership
interest to 89% in January 1999.

MINORITY INTEREST IN PRETAX INCOME OF CONSOLIDATED SUBSIDIARY

      Minority Interest in Pretax Income of Consolidated Subsidiary
represents the income relating to the 11% of Stafford not owned by the
Company.

OTHER INCOME (EXPENSE)

     Other Income (Expense) consists primarily of (i) interest incurred less
interest capitalized to inventory (interest expense), (ii) amortization of
financing fees, net of amounts capitalized to inventory, and (iii)
amortization of goodwill and covenants-not-to-compete; less interest income.
The increase in Other Income (Expense) of $668,000 and $993,000 from the
first three and six months of 1998 to the comparable periods in 1999,
respectively, is primarily due to an increase in interest expense resulting
from the consolidation of Stafford.

PROVISION FOR INCOME TAXES

     The Company's effective income tax rate for the second quarters of 1999
and 1998 was approximately 38.5%.

VARIABILITY OF RESULTS; OTHER FACTORS

     The Company has experienced, and expects to continue to experience,
significant variability in sales and net income. Factors that contribute to
variability of the Company's results include: the timing of home closings, a
substantial portion of which historically have occurred in the last month of
each quarter; the Company's ability to continue to acquire additional land on
favorable terms for future developments; the condition of the real estate
markets and economies in which the Company operates; the cyclical nature of
the homebuilding industry and changes in prevailing interest rates; costs of
material and labor; and delays in construction schedules caused by timing of
inspections and approval by regulatory agencies, including zoning approvals
and receipt of entitlements, the timing of completion of necessary public
infrastructure, the timing of utility hookups and adverse weather conditions.
The Company's historical financial performance is not necessarily a
meaningful indicator of future results and, in general, the Company's
financial results will vary from development to development, geographic area
to geographic area, and from fiscal quarter to fiscal quarter.

     Certain of the Company's currently planned projects as well as future
projects, particularly in Hawaii, are anticipated to be longer term in nature
than those developed in the past by the Company. The increased length of such


                                       15

<PAGE>

projects further exposes the Company to the risks inherent in the
homebuilding industry, including reductions in the value of land inventory.

     The Company's recent expansion to markets on the mainland United States
further exposes the Company to risks inherent in those markets. For example,
the Company will encounter construction issues and risks such as expansive
soils and extreme seasonal weather conditions in Colorado (dissimilar to
those encountered in Hawaii).

     The Company will continue to consider its expansion into additional
selected residential housing markets in the United States mainland and into
certain foreign countries and into other related industries. The Company has
and would consider the acquisition of or joint venture with an existing
company, as well as its own acquisition and development of homebuilding
projects in certain areas, in order to facilitate its expansion. No
assurances can be given that the Company will be able to successfully
establish operations outside of its existing Hawaiian markets or that such
expansion will not adversely affect its results of operations.

     In addition, the Company believes that the market price of its common
stock may at times be adversely affected due to the Company's relatively
small size when compared to certain other publicly traded national
homebuilding firms. The Company further believes that the price of its common
stock may be adversely affected due to the relatively low trading volume for
its shares.

BACKLOG

     The Company's homes are generally offered for sale in advance of their
construction upon applicable regulatory approval and sold pursuant to
standard sales contracts. The Company's standard sales contract may be
canceled by the buyer at any time prior to closing. The Company does not
recognize revenues on homes covered by such contracts until the sales are
closed. Homes covered by such sales contracts are considered by the Company
as its backlog.

     The following table sets forth the Company's backlog for both homes and
residential lots at June 30, 1999 and 1998, which includes homes and lots
sold pursuant to the Company's "zero-down" sales program and 100% of the
backlog related to projects developed by the Company's unconsolidated joint
ventures.

<TABLE>
<CAPTION>
                                                June 30, 1999                        June 30, 1998
                                                -------------                        -------------
                                                           Aggregate                           Aggregate
                                          Number          Sales Value          Number         Sales Value
<S>                                       <C>             <C>                  <C>            <C>
Consolidated:
  Colorado                                   566           $101,660,000           436          $ 70,674,000
  Hawaii                                      87             23,890,000            76            22,715,000
  Northern California                         94             22,818,000            26             3,954,000
  Oregon                                     100             16,285,000            41             8,076,000
  Washington                                  74             20,698,000           ---                   ---
                                              --             ----------           ---                   ---
    Total Consolidated                       921            185,351,000           579           105,419,000

Unconsolidated Joint Ventures:
  Hawaii                                       4                432,000             6               758,000
  Washington                                  --                    ---            88            22,320,000
  Colorado                                    54              9,372,000           ---                   ---
                                              --              ---------           ---            ----------

Total                                        979          $ 195,155,000           673          $128,497,000
                                             ===          =============           ===          ============
</TABLE>

     The average sales prices of the homes and lots comprising backlog for
consolidated projects at June 30, 1999 and 1998 were $201,000 and $182,000,
respectively. Due to the ability of buyers to cancel their sales contracts,
no assurances can be given that homes or residential lots in backlog will
result in actual closings.


                                       16

<PAGE>

YEAR 2000 COMPLIANCE

     The Company has developed and is currently executing a plan designed to
make its computer systems Year 2000 compliant. The plan covers four stages
including (i) inventory, (ii) assessment, (iii) remediation, and (iv)
testing. The Company has substantially completed the inventory, assessment
and remediation stages for its systems and applications. The Company has
completed a majority of its testing of these systems and applications, and
expects to complete the remainder of such testing prior to the end of 1999.

     The Company currently estimates that approximately $110,000 will be
incurred to address Year 2000 issues. As of June 30, 1999, approximately
$74,000 has been incurred and expensed. The Company anticipates that its Year
2000 costs will be funded from operations, and does not expect to defer any
other information technology projects as a result of its Year 2000 efforts.
The Company does not anticipate the Year 2000 issue will have material
adverse effects on the business operations or financial performance of the
Company. However, the failure of any internal system to achieve Year 2000
readiness could result in material disruption to the Company's operations.

     The Company has also initiated discussions with parties with whom it
does business to ensure that those parties have appropriate plans to
remediate Year 2000 issues where their systems impact the Company's
operations. The Company is assessing the extent to which its operations are
vulnerable should these organizations fail to properly remediate the computer
systems. Although the Company believes that alternative sources of labor and
materials will be available, there can be no assurance that the inability of
the Company's key subcontractors and suppliers to attain Year 2000 compliance
will not have a material adverse effect on the business operations and
financial performance of the Company. Even where assurances are received from
third parties, there remains a risk that failure of systems and products of
other companies on which the Company relies could have a material adverse
effect on the Company.

     In addition, the Company is materially reliant on third parties with
respect to its ability to collect sales proceeds and pay its vendors and
employees. Such third parties include governmental agencies in various
jurisdictions that record the conveyance of property, title and escrow
companies, banks and payroll processing firms. The Company intends to create
a contingency plan once responses from such third parties to questionnaires
have been received and evaluated.

     The costs of Year 2000 compliance and the foregoing statements are based
upon management's best estimates at the present time, which were derived
utilizing numerous assumptions of future events, including the continued
availability of certain resources, third party modification plans and other
factors. There can be no guarantee that these estimates will be achieved and
actual results could differ materially from those anticipated. Specific
factors that might cause such material differences include, but are not
limited to, the availability and cost of personnel trained in this area, the
ability to locate and correct all relevant computer codes, the nature and
amount of programming required to upgrade or replace each of the affected
programs, the rate and magnitude of related labor and consulting costs and
the success of the Company's external customers and suppliers in addressing
the Year 2000 issue. The Company's evaluation is on-going and it expects that
new and different information will become available to it as that evaluation
continues. Consequently, there is no guarantee that all material elements
will be Year 2000 ready in time.

LIQUIDITY AND CAPITAL RESOURCES

     The Company uses it liquidity and capital resources to, among other
things, (i) support its operations including its inventories of homes, home
sites and land; (ii) provide working capital; (iii) fund market expansion,
including acquisitions, investments in and advances to joint ventures, and
start-up operations; and (iv) make interest payments on outstanding debt.

CAPITAL RESOURCES

     The Company anticipates continuing to acquire land for use in its future
homebuilding operations including finished

                                       17
<PAGE>

lots and partially developed land. The Company currently intends to acquire a
portion of the land inventories required in future periods through takedowns
of lots subject to option contracts entered into in prior periods and under
new option contracts. The use of option contracts lessens the Company's
land-related risk and improves liquidity. Because of increased demand for
partially developed and finished lots in certain of the markets where the
Company builds homes, the Company's ability to acquire lots using option
contracts has been reduced or has become more expensive.

     In January 1999, the Company increased its ownership interest in
Stafford to 89% and refinanced Stafford's existing debt. The Company
anticipates that it will acquire the remaining 11% interest in Stafford in
January 2001.

     The Company anticipates that it has adequate financial resources to
satisfy its current and near-term capital requirements based on its current
capital resources and additional liquidity available under existing credit
agreements. The Company believes that it can meet its long-term capital needs
(including, among other things, meeting future debt payments and refinancing
or paying off other long-term debt as it becomes due) from operations and
external financing sources, assuming that no significant adverse changes in
the Company's business, or general economic conditions, occur as a result of
the various risk factors described elsewhere herein and in the Company's
Annual Report on Form 10-K, in particular, increases in interest rates.

NOTES PAYABLE

     On May 6, 1998, the Company consummated its offering of $100.0 million
aggregate principal amount of 9% Senior Notes, which are due April 15, 2008.
The Company received net proceeds from the offering of approximately $97.2
million (net of discounts and estimated offering costs of approximately $2.8
million). The Company used such proceeds to repay a portion of the Company's
borrowings under its line of credit. The offering costs will be amortized
over the term of the notes using the interest method. In April 1998, the
Company amended certain provisions of its Revolving Credit Facility to
provide for the issuance of the Senior Notes.

     In July 1999, the Company increased its Revolving Credit Facility with a
consortium of banks from $90.0 million to $120.0 million. The Company has a
one-time option to reduce the amount of the facility by $30.0 million on an
irrevocable basis, provided the facility has been increased to $120.0 million
for at least six months. The facility expires on July 1, 2002 and includes an
option for the lenders to extend the term for an additional year as of July 1
of each year. The Company can select an interest rate based on either LIBOR
(1, 2, 3 or 6-month term) or prime for each borrowing. Based on the Company's
leverage ratio, as defined under the credit agreement, the interest rate may
vary from LIBOR plus 1.5% to 2% or prime plus 0% to 0.25%. The Revolving
Credit Facility contains covenants, including certain financial covenants and
also contains provisions which may, in certain circumstances, limit the
amount the Company may borrow. In April 1999, the Company entered into a
separate 90-day $10.0 million line of credit with one of the banks included
in the $120.0 million Revolving Credit Facility (extended for an additional
90 days in July 1999). At July 31, 1999, and June 30, 1999, the Company had
bank notes payable of approximately $79.5 million and $60.0 million,
respectively.

COMMITMENTS

     At July 31, 1999, the Company has commitments to purchase parcels of
land for approximately $4.0 million. The Company expects to utilize a
combination of cash flow from operations and bank financing to purchase these
land parcels. The Company intends to consummate the purchases of these land
parcels between 1999 and 2000. However, no assurances can be given that these
purchases will be completed.

    In November 1998, the Company adopted a stock repurchase program to
reacquire up to an aggregate of $10 million of its outstanding common stock
through August 30, 1999. During the quarter ended June 30, 1999, the Company
repurchased 409,400 shares at a cost of $3.0 million, resulting in 504,400
total shares purchased under the program at a total cost of $3.6 million.

     The Company has no material commitments or off-balance sheet financing
arrangements that would tend to affect future liquidity. The Company believes
that cash flow from operations and borrowings under its credit facilities
will provide adequate cash to fund the Company's operations at least through
1999. However, there can be no assurance that the Company will not require
additional financing within this time frame. The Company may need to raise

                                       18
<PAGE>

additional funds in order to support more rapid expansion, respond to
competitive pressures, acquire complementary businesses or respond to
unanticipated requirements. The Company may seek to raise additional funds
through private or public sales of debt or equity securities, bank debt, or
otherwise. There can be no assurance that such additional funding, if needed,
will be available on terms attractive to the Company, or at all.


                                       19

<PAGE>



                               SCHULER HOMES, INC.

                           PART II. OTHER INFORMATION

Item 1.  Legal Proceedings

     In April 1996, the Company was served with a purported class action
     complaint by owners of units and the Association of Owners of Fairway
     Village at Waikele alleging, among other things, material construction
     defects and deficiencies, misrepresentations regarding the cost of
     insurance and breach of a covenant of good faith and fair dealing.
     Following the Courts' denial of a class certification request, a second
     action involving other homeowners at Fairway Village advancing the same
     claims was initiated. While the Company believed the claims to be largely
     without merit, during April 1999, a settlement agreement was entered into
     by the Company, third party defendants, insurance carriers and all of the
     plaintiffs in both lawsuits, except for the owners of three units. The
     settlement amount incurred by the Company will be charged against the
     warranty accruals previously established by the Company. Although the cost
     of remediation for certain units called for under the settlement agreement
     is not determinable until the work is completed, the Company believes that
     the cost of such work will not exceed its warranty accruals. A new trial
     date in December 1999 has been set for the initial suit, which has two
     remaining plaintiffs. No trial date has been set in the second action,
     which includes one remaining plaintiff. Such matters, if decided adversely
     to the Company, would not, in the opinion of management, have a material
     adverse effect on the financial condition of the Company.

     The Company is also from time to time involved in routine litigation or
     threatened litigation arising in the ordinary course of its business. Such
     matters, if decided adversely to the Company, would not, in the opinion of
     manage-ment, have a material adverse effect on the financial condition of
     the Company.


Items 2 and 3.  Not applicable.

Item 4.  Submission of Matters to a Vote of Security Holders.

(a) The Company held an Annual Meeting of Stockholders on May 17, 1999.

(b) At the Annual Meeting of Stockholders, the following directors were
    elected:

           Bert T. Kobayashi, Jr.
           Thomas A. Bevilacqua

(c) At the Annual Meeting of Stockholders, the following matters were voted
    upon:

    (1)  A proposal to ratify the selection of Ernst & Young LLP as independent
         auditors for fiscal year 1999.

              Affirmative votes:                 18,674,926
              Negative votes:                        66,700
              Abstain:                                  805

    (2)  A proposal to elect Bert T. Kobayashi, Jr. to the Board of Directors.

              Affirmative votes:                 18,260,631
              Withhold authority:                   481,800

    (3)  A proposal to elect Thomas A. Bevilacqua to the Board of
         Directors.

              Affirmative votes:                 18,737,131


                                       20

<PAGE>

         Withhold authority:                          5,300


    (4)  A proposal to approve the amend  the 1992  Stock Option Plan.

              Affirmative votes:                 13,659,882
              Negative votes:                     5,079,124
              Abstain:                                3,425

Item 5.  Not applicable.

Item 6.  Exhibits and Reports on Form 8-K.

      (a)Exhibits.

              EXHIBIT
              NUMBER            DOCUMENT DESCRIPTION
              -------           --------------------
                 10.1           Second Amendment to Second Amended and Restated
                                Credit Agreement between the Company, certain
                                Banks, First Hawaiian Bank and Bank of America
                                NT & SA, dated July 2, 1999.

                 10.2           Third Amendment to Second Amended and Restated
                                Credit Agreement between the Company, certain
                                Banks, First Hawaiian Bank and Bank of America
                                NT & SA, dated July 22, 1999.

                 10.3           Guaranty by wholly-owned subsidiaries of the
                                Company to certain Banks, First Hawaiian Bank
                                and Bank of America NT & SA, dated July 22,
                                1999.

                   27           Financial Data Schedule.

(b) Reports on Form 8-K. There were no reports on Form 8-K for the quarter
    ended June 30, 1999.


                                       21

<PAGE>

                               SCHULER HOMES, INC.

                                   SIGNATURES


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 thereto duly authorized.



                                         SCHULER HOMES, INC.


Date: August 9, 1999                     By:  /s/ JAMES K. SCHULER
                                         -------------------------------------
                                         James K. Schuler
                                         Chairman of the Board,
                                         President and Chief Executive Officer
                                        (principal executive officer)



Date: August 9, 1999                    By:  /s/ PAMELA S. JONES
                                        --------------------------------------
                                        Pamela S. Jones
                                        Senior Vice President of Finance,
                                        Chief Financial Officer and
                                        Director (principal financial officer)



Date: August 9, 1999                    By:  /s/ DOUGLAS M. TONOKAWA
                                        --------------------------------------
                                        Douglas M. Tonokawa
                                        Vice President of Finance,
                                        Chief Accounting Officer
                                        (principal accounting officer)


                                       22