<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 March 31, 2000

              [ ] 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                     April 30, 2000
        ---------------------                     --------------
           $.01 par value                           20,100,946

<PAGE>


                                 SCHULER HOMES, INC.

                                        INDEX

<TABLE>
<CAPTION>
PART I.    FINANCIAL INFORMATION
<S>        <C>                                                                <C>
Item 1.    Financial Statements

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

           Consolidated Balance Sheets - March 31, 2000 and
              December 31, 1999..............................................  4

           Consolidated Statements of Income - Three months
              ended March 31, 2000 and 1999..................................  5

           Consolidated Statements of Cash Flows - Three months
              ended March 31, 2000 and 1999..................................  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................................................. 18

SIGNATURES................................................................... 19
</TABLE>


                                       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 March 31, 2000, and the related consolidated statements of
income and cash flows for the three-month periods ended March 31, 2000 and 1999.
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, 1999, 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 14, 2000, 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, 1999, 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
May 8, 2000

                                       3
<PAGE>


                               SCHULER HOMES, INC.
                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                  March 31,2000  December 31, 1999
                                                                  -------------  -----------------
                                                                   (unaudited)
ASSETS
                                                                  -------------    -------------
<S>                                                               <C>              <C>
Cash and cash equivalents (restricted-Note 1) .................   $   4,737,000    $   6,673,000
Real estate inventories (Note 2) ..............................     442,925,000      436,305,000
Investments in unconsolidated joint ventures (Note 3) .........      10,120,000        8,346,000
Deferred income taxes .........................................       2,819,000        2,362,000
Intangibles, net ..............................................      15,149,000       15,506,000
Other assets (Note 3) .........................................      21,135,000       21,274,000
                                                                  -------------    -------------
Total assets ..................................................   $ 496,885,000    $ 490,466,000
                                                                  =============    =============


LIABILITIES AND STOCKHOLDERS' EQUITY

Accounts payable ..............................................   $  33,964,000    $  31,819,000
Accrued expenses ..............................................      25,447,000       19,041,000
Notes payable to banks (Note 4) ...............................      60,974,000       78,183,000
Notes payable to others .......................................       7,587,000        2,409,000
9% senior notes due 2008 ......................................      98,711,000       98,671,000
6-1/2% convertible subordinated debentures due 2003 ...........      57,500,000       57,500,000
                                                                  -------------    -------------

Total liabilities .............................................     284,183,000      287,623,000

Commitments and contingencies (Notes 4 and 5)

Minority interest in consolidated subsidiary ..................       1,845,000        1,695,000

Stockholders' equity (Note 6):

Common stock, $.01 par value; 30,000,000 shares authorized;
  21,400,646 and 21,371,825 shares issued at March 31, 2000 and
     December 31, 1999, respectively ..........................         214,000          214,000
  Additional paid-in capital ..................................      96,186,000       96,038,000
  Retained earnings ...........................................     123,174,000      113,482,000
    Treasury stock, at cost; 1,299,700 and 1,278,400 shares at
    March 31, 2000 and December 31, 1999, respectively ........      (8,717,000)      (8,586,000)
                                                                  -------------    -------------
Total stockholders' equity ....................................     210,857,000      201,148,000
                                                                  -------------    -------------
Total liabilities and stockholders' equity ....................   $ 496,885,000    $ 490,466,000
                                                                  =============    =============
</TABLE>

                             See accompanying notes.


                                       4
<PAGE>


                               SCHULER HOMES, INC.
                        CONSOLIDATED STATEMENTS OF INCOME


<TABLE>
<CAPTION>
                                                      Three months ended March 31,
                                                     ------------------------------
                                                          2000              1999
                                                     -------------    -------------
                                                              (unaudited)

<S>                                                  <C>              <C>
Revenues:
  Home and lot sales .............................   $ 154,532,000    $  95,893,000
  Land sales .....................................       6,204,000             --
                                                     -------------    -------------
       Total  revenues ...........................     160,736,000       95,893,000

Costs and expenses:
    Home and lot sales ...........................     122,664,000       75,214,000
    Land sales ...................................       4,155,000             --
    Selling and commissions ......................       8,902,000        6,149,000
    General and administrative ...................       8,384,000        5,407,000
                                                     -------------    -------------
        Total costs and expenses .................     144,105,000       86,770,000
                                                     -------------    -------------
    Operating income .............................      16,631,000        9,123,000

Income from unconsolidated joint ventures ........         753,000           73,000
Minority interest in pretax income of consolidated
  subsidiary .....................................        (150,000)         (93,000)
Other income (expense) (Note 4) ..................      (1,381,000)      (1,361,000)
                                                     -------------    -------------
Income before provision for income taxes .........      15,853,000        7,742,000
Provision for income taxes (Note 7) ..............       6,161,000        2,952,000
                                                     -------------    -------------

  Net income .....................................   $   9,692,000    $   4,790,000
                                                     =============    =============
Net income per share (Note 8):
Basic ............................................   $        0.48    $        0.24
                                                     =============    =============
Diluted ..........................................   $        0.46    $        0.24
                                                     =============    =============
</TABLE>

                             See accompanying notes.


                                       5
<PAGE>

                               SCHULER HOMES, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS


<TABLE>
<CAPTION>
                                                                                  Three months ended March 31,
                                                                                      2000            1999
                                                                                  ------------    ------------
                                                                                          (unaudited)
OPERATING ACTIVITIES:
<S>                                                                               <C>             <C>
Net income ....................................................................   $  9,692,000    $  4,790,000

Adjustments to reconcile net income to net cash provided by (used in)
   operating activities:
     Depreciation and amortization expense ....................................      1,413,000         872,000
     Income from unconsolidated joint ventures ................................       (224,000)        (73,000)
     Principal payments of notes receivable ...................................         49,000         581,000
     Minority interest ........................................................        150,000          93,000
Changes in assets and liabilities, net of effects of purchase of additional 40%
interest in Stafford:
     (Increase) decrease in real estate inventories ...........................     (2,228,000)    (20,054,000)
     (Increase) decrease in other assets ......................................       (128,000)        453,000
     Increase (decrease) in accounts payable ..................................      2,145,000       2,883,000
     Increase (decrease) in accrued expenses ..................................      6,521,000       5,252,000
     Change in deferred income taxes ..........................................       (457,000)        489,000
                                                                                  ------------    ------------
       Net cash provided by (used in) operating activities ....................     16,933,000      (4,714,000)

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 .....................................       (747,000)           --
Repayments of advances to unconsolidated joint ventures .......................        112,000          71,000
Investment in unconsolidated joint ventures ...................................       (915,000)           --
Capital distributions from unconsolidated joint ventures ......................           --           443,000
Purchase of furniture, fixtures, and equipment ................................       (278,000)       (468,000)
                                                                                  ------------    ------------
    Net cash provided by (used in) investing activities .......................     (1,828,000)     (5,181,000)

FINANCING ACTIVITIES:
Proceeds from bank borrowings .................................................     55,370,000      75,990,000
Principal payments on bank borrowings .........................................    (72,579,000)    (32,984,000)
Principal payments on notes payables to others ................................       (160,000)       (376,000)
Refinancing of Stafford's debt ................................................           --       (29,378,000)
Advances to affiliates (Note 3) ...............................................           --        (1,000,000)
Repayment of advances to affiliates (Note 3) ..................................        270,000            --
Net decrease in discount on issuance of senior notes ..........................         40,000          39,000
Proceeds from issuance of common stock from exercise of stock options .........           --            30,000
Proceeds from issuance of common stock under Employee Stock Purchase Plan
(Note 6) ......................................................................        149,000         165,000
Reacquisition of the Company's common stock (Note 6) ..........................       (131,000)           --
                                                                                  ------------    ------------
    Net cash provided by (used in) financing activities .......................    (17,041,000)     12,486,000
                                                                                  ------------    ------------
Increase (decrease) in cash ...................................................     (1,936,000)      2,591,000
Cash and cash equivalents (restricted) at beginning of period .................      6,673,000       4,915,000
                                                                                  ------------    ------------
Cash and cash equivalents (restricted) at end of period .......................   $  4,737,000    $  7,506,000
                                                                                  ============    ============
</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, 1999
    contained in the Company's 1999 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.

    Included in Cash and Cash Equivalents at March 31,2000 is a restricted
    amount of $1,204,000, which primarily represents a collection allowance
    resulting from the sale of second mortgages and accounts restricted for
    certain development costs.


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.

    Real estate inventories at March 31, 2000 consist of the following:

<TABLE>
    <S>                                                                 <C>
    Unimproved land held for future development ..................      $ 48,375,000
    Development projects in progress .............................       352,476,000
    Completed inventory (including lots held for sale) ...........        42,074,000
                                                                        ------------
                                                                        $442,925,000
                                                                        ============
</TABLE>

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

     During the quarter ended March 31, 2000, the purchase price for certain of
     the land parcels purchased by the Company included notes payable to land
     sellers in the aggregate amount of $5,338,000.


                                       7
<PAGE>


3.  Related Party Transactions

    The Company leases its main office in Oregon from a family member of the
    Division President of the Oregon Division. During the quarter ended March
    31, 2000, the Company incurred total rental expense in connection with such
    lease of approximately $13,000.

    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 March 31,
    2000 is a note receivable of $800,000 from the Oregon Division President,
    which is due on December 31, 2005, bears interest at 7%, and requires
    minimum annual payments of $200,000 plus accrued but unpaid interest. In
    March 2000, the Company received a payment of $200,000, plus accrued
    interest of $70,000. Accrued interest receivable relating to the note was
    approximately $17,000 at March 31, 2000.

    In connection with the acquisition of certain assets of a homebuilder in
    July 1999 that established the new divisions in Southern California and
    Arizona, the owners of the seller, who became officers of the new divisions,
    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. In
    addition, the Company provided a loan to the seller in the amount of
    $4,810,000, which balance at March 31, 2000 was $4,406,000 and is included
    in Other Assets. The loan is due on December 31, 2004 and bears interest at
    7%. Accrued interest receivable relating to the loan was approximately
    $103,000 at March 31, 2000.

    From time to time, the Company engages the law firm in which a director of
    the Company is a partner. During the quarterly period ended March 31, 2000,
    no legal fees to such firm were incurred by the Company.


4.  Notes Payable to Banks

    On October 1, 1999, the Company increased its Revolving Credit Facility with
    a consortium of banks from $120,000,000 to $170,000,000. The Company has a
    one-time option to reduce the amount of the facility by up to $30,000,000 on
    an irrevocable basis, provided the facility has remained at $170,000,000 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 and interest coverage ratios, as defined, the interest
    rate may vary from LIBOR plus 1.5% to LIBOR plus 2%, or from prime plus 0%
    to prime plus 0.25%. The Company's ability to draw upon its line of credit
    is dependent upon meeting certain financial ratios and covenants. As of
    March 31, 2000, the Company met such financial ratios and covenants.

    The Company entered into two interest rate swaps. One swap requires the
    Company 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. The second swap, which became effective on
    August 9, 1999 and terminates on August 9, 2002, requires the Company to pay
    interest at a floating one month LIBOR 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.

    Notes Payable to Banks at March 31, 2000 consist of borrowings under its
    credit facilities. At March 31, 2000, the Company's bank borrowings were at
    interest rates of prime (9%) and LIBOR plus 1.5% (7.6%). At March 31, 2000,
    $109,026,000 of the Company's line of credit is unused, of which $4,819,000
    is restricted for outstanding but unused letters of credit.

    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 $3,486,000 during the

                                       8
<PAGE>

    quarter ended March 31, 2000. Interest incurred during the quarter ended
    March 31, 2000 was approximately $4,908,000. All of such interest was
    capitalized to real estate inventories except for $1,086,000, 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 sales during the quarter ended March 31, 2000 totaled $4,045,000.


5.  Commitments and Contingencies

    At March 31, 2000, 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 owners of two of the
    three units subsequently settled in late 1999, bringing an end to the
    initial suit. The one remaining plaintiff in the second action settled in
    April 2000. The settlement amounts incurred by the Company are not material
    to its financial condition. Although the cost of remediation for certain
    units called for under the settlement agreements are not determinable until
    the work is completed, the Company believes that the cost of such work will
    not be material to its financial condition.

    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 March 31, 2000, options to purchase 10,000 shares
    of common stock were granted. During April 2000, options to purchase 61,000
    shares of common stock were granted. In addition, 28,821 shares were issued
    on February 29, 2000 pursuant to the Company's Employee Stock Purchase Plan.

    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 (subsequently extended through December 31, 2000).
    As of March 31, 2000, the Company has repurchased 525,700 shares under the
    program at a total cost of $3,718,000.


7.  Income Taxes

    During the three months ended March 31, 2000, the Company made income tax
    payments of $2,751,000.


8.  Net Income Per Share

    Basic net income per share for the quarters ended March 31, 2000 and 1999
    were computed using the weighted average number of common shares outstanding
    during the quarters of 20,097,608 and 20,034,801, respectively.

    Diluted net income per share for the three month period ended March 31, 2000
    was computed by adding to net income the interest expense of $653,000 (net
    of related income taxes) which is applicable to convertible


                                       9
<PAGE>

    subordinated debentures, and dividing by 22,731,598, which represents the
    weighted average number of shares assuming conversion of all convertible
    subordinated debentures. The computation of diluted net income per share for
    the quarter ended March 31, 1999 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.


                                       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 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 seven geographic markets: Arizona,
Colorado, Hawaii, Northern California, Oregon, Southern California and
Washington.

    For the quarter ended March 31, 2000, revenues were $160.7 million and
operating income was $16.6 million, compared to revenues of $95.9 million and
operating income of $9.1 million during the first quarter last year. Net income
was $9.7 million ($0.46 per share) for the quarter ended March 31, 2000,
compared to net income of $4.8 million ($0.24 per share) during the 1999 first
quarter. The Company's 2000 first quarter operating income includes the sale of
a land parcel during the first quarter which contributed $6.2 million and $2.0
million to the Company's revenues and operating income, respectively. Operating
margins were 10.3% of revenues in the first quarter of 2000 compared to 9.5% of
revenues in the first quarter of 1999. For the first quarter of 1999 compared to
the first quarter of 2000, revenues grew 67.6%, net income grew 102.3%, and the
number of units closed increased by 53.7% from 508 to 781.


                                       11
<PAGE>


RESULTS OF OPERATIONS

The following table sets 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 Amounts
                                                                     March 31,                  from
                                                                   2000     1999            1999 to 2000
                                                                   ----     ----            ------------
Home and lot sales
<S>                                                               <C>       <C>                 <C>
   Revenues                                                       100.0%    100.0%              61.2%
   Costs                                                           79.4      78.4               63.1
   Selling and commissions expense                                  5.8       6.4               44.8
Land sales
   Revenues                                                       100.0%       --                N/A
   Costs                                                           67.0        --                N/A
---------------------------------------------------------------------------------

Total  revenues                                                   100.0%    100.0%              67.6

General and administrative expense                                  5.2       5.7               55.1
                                                                  -----     -----
Total costs and expenses                                           89.7      90.5               66.1
                                                                  -----     -----

Operating income                                                   10.3       9.5               82.3


Income from unconsolidated joint ventures                           0.5       0.1              931.5
Minority interest in pretax income of consolidated subsidiary      (0.1)     (0.1)              61.3
Other income (expense)                                             (0.9)     (1.4)               1.5
                                                                  -----     -----

Income before provision for income taxes                            9.8       8.1              104.8
Provision for income taxes                                          3.8       3.1              108.7
                                                                  -----     -----
    Net income                                                      6.0%      5.0%             102.3
                                                                  =====     =====
</TABLE>

 REVENUES - HOME AND LOT SALES

     The Company's Revenues - Home and Lot Sales for the quarter ended March 31,
2000 were approximately $154.5 million as compared to approximately $95.9
million during the quarter ended March 31, 1999. This represents an increase of
approximately $58.6 million or 61.2%. The increase in revenues reflects a larger
number of unit sales closed at higher average sales prices in the first quarter
of 2000 relative to the first quarter of 1999. The Company's average sales price
per unit increased to $214,000 during the 2000 first quarter, an increase from
an average sales price per unit during the 1999 first quarter of $187,000
(including 11 sales that closed prior to January 1, 1999 under the Company's
"zero-down" sales program, for which the second mortgages were sold during the
1999 first quarter).


                                       12
<PAGE>

     The following table sets forth the number of sales closed during the
quarters ended March 31, 2000 and 1999, which includes 100% of the sales closed
at projects developed by the Company's joint ventures.

<TABLE>
<CAPTION>
                                                               Three months ended March 31,
                                                                 2000              1999
                                                                 ----              ----
Consolidated:
<S>                                                               <C>               <C>
  Colorado                                                        423               296
  Hawaii (1)                                                       88                65
  Northern California                                              78                23
  Oregon                                                           79                60
  Washington (2)                                                   55                57
                                                                  ---               ---
    Total Consolidated                                            723               501
Unconsolidated Joint Ventures:
  Colorado (3)                                                     25                --
  Hawaii (4)                                                        6                 7
  Southern California (5)                                          27                --
                                                                  ---               ---

Total                                                             781               508
                                                                  ===               ===
</TABLE>

(1) 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 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%.
(3) Reflects 100% of the information with respect to the Company's 50%-owned
    joint venture in Colorado.
(4) Reflects 100% of the information with respect to the Company's two 50% owned
    joint ventures in Hawaii.
(5) Reflects 100% of the information with respect to the Company's 24.5% to
    49%-owned joint ventures in Southern California.

REVENUES - LAND SALES

     Revenues - Land Sales were $6.2 million during the first quarter of 2000,
resulting from the sale of a land parcel in Northern California. Generally, land
sale revenues will fluctuate with decisions to maintain or decrease the
Company's land ownership position in certain markets based upon the volume of
its holdings, the strength and number of competing developers entering
particular markets at given points in time, the availability of land markets
served by the Company and prevailing market conditions.

COSTS AND EXPENSES - HOME AND LOT SALES

     Costs and Expenses - Home and Lot Sales represents the acquisition,
development and construction costs attributable to home sales closed.
Acquisition, development and construction costs include primarily land
acquisition costs, site work and land development costs, construction material
and labor costs, engineering and architectural costs, loan fees, interest, and
other direct and indirect costs attributable to development, project management
and construction activities.

     Costs and Expenses - Home and Lot Sales increased from approximately $75.2
million during the quarter ended March 31, 1999 to approximately $122.7 million
during the same period in 2000, representing an increase of approximately $47.5
million or 63.1%. This increase reflects a larger number of units closed and
related increased revenue during the first quarter of 2000 relative to the first
quarter of 1999. As a percentage of revenues, Costs and Expenses - Home and Lot
Sales increased from 78.4% to 79.4%. This increase is primarily attributable to
the different mix of development projects in which closings occurred and the
decrease in the average sales price of homes closed in



                                       13
<PAGE>

the Oregon Division, resulting from the softening experienced in its market due
to slowing job growth.

     Total interest incurred during the quarters ended March 31, 2000 and 1999
was approximately $4.9 million and $4.4 million, respectively. Of the amounts
incurred, approximately $1.1 million and $941,000 was expensed currently
(included in Other Income (Expense)), in the first quarters of 2000 and 1999,
respectively, and the remaining interest incurred was capitalized to development
projects. Interest capitalized to projects is expensed through Costs and
Expenses - Home and Lot Sales as sales are closed and revenue is recognized in
the particular project. The amount of previously capitalized interest, which was
expensed through Costs and Expenses - Home and Lot Sales, totaled $4.0 million
and $3.0 million during the quarters ended March 31, 2000 and 1999,
respectively.

     Average debt outstanding was approximately $250.7 million and $229.0
million during the first quarters of 2000 and 1999, respectively. The Company's
average interest rate on its debt for the quarters ended March 31, 2000 and 1999
was approximately 7.9% and 7.7%, 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.

COSTS AND EXPENSES - LAND SALES

     Costs and Expenses - Land Sales represents the acquisition and, if any,
development costs attributable to the land parcel sold.

COST AND EXPENSES - SELLING AND COMMISSIONS

         Selling and commissions expense represents the selling and marketing
costs associated with the sale of homes. Such costs include commissions, sales
incentives offered to buyers, advertising costs, model and sales office costs
and other general sales and marketing costs.

     Selling costs and commissions represented approximately 5.8% and 6.4% of
revenues from home and lot sales during the quarters ended March 31, 2000 and
1999, respectively. The reduction in selling and commission costs as a
percentage of revenues is a result of selling costs and commissions increasing
at a lesser 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 Costs and Expenses - Home and Lot Sales.

     General and Administrative Expenses increased by $3.0 million during the
first quarter of 2000 as compared to the same period in 1999, primarily due to
expansion at the Company's U. S. mainland divisions. As a percentage of sales,
General and Administrative Expenses decreased from 5.7% during the quarter ended
March 31, 1999 to 5.2% during the quarter ended March 31, 2000. This decrease is
a result of General and Administrative Expenses increasing at a lesser rate than
revenues.

INCOME FROM UNCONSOLIDATED JOINT VENTURES

     Income from Unconsolidated Joint Ventures represents (i) the Company's 50%
interest in the operations of two joint ventures in Hawaii, (ii) beginning in
the second quarter of 1999, the Company's 50% interest in its joint venture in
Colorado and (iii) beginning in the third quarter of 1999, the Company's 24.5%
to 49% interest in joint ventures in Southern California.

MINORITY INTEREST IN PRETAX INCOME OF CONSOLIDATED SUBSIDIARY

      Minority Interest in Pretax Income of Consolidated Subsidiary represents
the income relating to the 11% of



                                       14
<PAGE>

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 decrease in
Other Income (Expense) from the first quarter of 1999 to the first quarter of
2000, is primarily due to a lower ratio of debt to inventory under development.

PROVISION FOR INCOME TAXES

     The Company's effective income tax rate for the first quarters of 2000 and
1999 was approximately 38.9% and 38.1%, respectively.


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
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.

     Virtually all purchasers of the Company's homes finance their purchases
with mortgage financing from lenders. In general, housing demand is adversely
affected by increases in interest rates, unavailability of mortgage financing,
increasing housing costs and unemployment. The recent increase in mortgage
interest rates and any further increases in



                                       15
<PAGE>

mortgage interest rates may adversely affect the ability of prospective buyers
to finance home purchases and may adversely impact the Company's revenues, gross
profit margins and net income. The Company's homebuilding activities are also
dependent upon the availability and cost of mortgage financing for buyers of
homes owned by potential customers so those customers ("move-up buyers") can
sell their homes and purchase a home from the Company.

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 March 31, 2000 and 1999, 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>
                                                March 31, 2000                     March 31, 1999
                                                --------------                     --------------
                                                               Aggregate                          Aggregate
                                            Number           Sales Value       Number           Sales Value
                                            ------           -----------       ------           -----------
Consolidated:
<S>                                            <C>          <C>                   <C>          <C>
  Colorado                                     635          $125,713,000          523          $ 91,798,000
  Hawaii                                        71            20,007,000           88            24,294,000
  Northern California                          117            36,634,000           70            14,702,000
  Oregon                                        45             7,703,000          111            19,961,000
  Washington                                   137            41,958,000           62            15,109,000
                                             -----          ------------          ---          ------------
    Total Consolidated                       1,005           232,015,000          854           165,864,000

Unconsolidated Joint Ventures:
  Colorado                                      11             2,110,000           42             6,623,000
  Hawaii                                        16             1,572,000            3               390,000
  Southern California                           37            13,229,000           --                    --
                                             -----          ------------          ---          ------------

Total                                        1,069          $248,926,000          899          $172,877,000
                                             =====          ============          ===          ============
</TABLE>

     The average sales prices of the homes and lots comprising backlog for
consolidated projects at March 31, 2000 and 1999 were $231,000 and $194,000,
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.

LIQUIDITY AND CAPITAL RESOURCES

     The Company uses its liquidity and capital resources to, among other
things, (i) support its operations including its inventories of land, home sites
and homes; (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 and principal payments on outstanding debt.

                                       16
<PAGE>
CAPITAL RESOURCES

     The Company anticipates continuing to acquire land for use in its future
homebuilding operations. 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 risks
and improves liquidity. Because of increased demand for undeveloped, 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.

     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,
particularly increases in interest rates, described elsewhere herein and in the
Company's Annual Report on Form 10-K.

LINES OF CREDIT AND NOTES PAYABLE

     On October 1, 1999, the Company increased its Revolving Credit Facility
with a consortium of banks from $120.0 million to $170.0 million. The Company
has a one-time option to reduce the amount of the facility by up to $30.0
million on an irrevocable basis, provided the facility has remained at $170.0
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 and interest coverage ratios, as defined under the credit
agreement, the interest rate may vary from LIBOR plus 1.5% to LIBOR plus 2%, or
from prime plus 0% to prime plus 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. At
April 30, 2000, and March 31, 2000, the Company had bank notes payable of
approximately $75.5 million and $61.0 million, respectively.

COMMITMENTS

     At April 30, 2000, 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 during 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 (subsequently extended through December 31, 2000). As of
March 31, 2000, the Company has repurchased 525,700 shares under the program at
a total cost of $3.7 million.

     In connection with the acquisition of certain assets of a homebuilder in
October 1998, the owner of the seller, who became the Division President of the
Company's Oregon Division, earns a percentage of the profits of the Oregon
Division. In connection with the acquisition of certain assets of a homebuilder
in July 1999 that established the new divisions in Southern California and
Arizona, the owners of the seller, who became officers of the new divisions,
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.

     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 2000.
However, there can be no assurance that the Company will not require additional
financing within this time frame. The Company may need to raise 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.

                                       17
<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
     owners of two of the three units subsequently settled in late 1999,
     bringing an end to the initial suit. The one remaining plaintiff in the
     second action settled in April 2000. The settlement amounts incurred by the
     Company are not material to its financial condition. Although the cost of
     remediation for certain units called for under the settlement agreements
     are not determinable until the work is completed, the Company believes that
     the cost of such work will not be material to its financial condition.

    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.


Items 2 through 5.  Not applicable.

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

      (a) Exhibits.

              Exhibit
              Number             Document Description
              ------             --------------------
                27               Financial Data Schedule.

      (b) Reports on Form 8-K. There were no reports on Form 8-K for the quarter
ended March 31, 2000.

                                       18
<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:  May 9, 2000                    By: /s/ James K. Schuler
                                         --------------------------
                                         James K. Schuler
                                         Chairman of the Board,
                                         President and Chief Executive Officer
                                         (principal executive officer)



Date:  May 9, 12000                   By: /s/ Pamela S. Jones
                                         --------------------------
                                         Pamela S. Jones
                                         Senior Vice President of Finance,
                                         Chief Financial Officer and
                                         Director (principal financial officer)



Date:  May 9, 2000                    By: /s/ Douglas M. Tonokawa
                                         --------------------------
                                         Douglas M. Tonokawa
                                         Vice President of Finance,
                                         Chief Accounting Officer
                                         (principal accounting officer)

                                       19