<PAGE>

                                UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549

                                  FORM 10-K

(Mark One)

(X)  Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange
     Act of 1934. For the fiscal year ended December 31, 1997 or

(   )  Transition Report Pursuant to Section 13 or 15(d) of the Securities
       Exchange Act of 1934. For the transition period from _________ to
       __________

                       COMMISSION FILE NUMBER 33-26991

                  __________________________________________

              AMERICAN BUILDERS AND CONTRACTORS SUPPLY CO., INC.
                     AMCRAFT BUILDING PRODUCTS CO., INC.
                         MULE-HIDE PRODUCTS CO., INC.
    (Exact names of Registrants as specified in their respective charters)

           DELAWARE                      5033                  39-1413708
           DELAWARE                      5033                  39-1701778
           TEXAS                         5033                  62-11277211
(State or other jurisdiction of    (Primary Standard        (I.R.S. Employer
incorporation or organization)   Industrial Classification  Identification No.)
                                       Code Number)

       ONE ABC PARKWAY, BELOIT, WISCONSIN                   53511
       (Address of principal executive offices)           (Zip code)

                                 608-362-7777
             (Registrant's telephone number, including area code)

                   _______________________________________

        SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

        NONE

        SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

        NONE

        Indicate by check 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 requred to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.  Yes  X  No
                                               ---    ---
        Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of Registrant's knowlege, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K.  (X)
<PAGE>

                                    PART I

ITEM 1.  BUSINESS

        GENERAL

        American Builders and Contractors Supply Co., Inc. (the Company) is
the largest wholesale distributor of roofing products and one of the largest
wholesale distributors of vinyl siding materials in the United States,
operating 205 distribution centers located in 40 states. ABC provides its
customers with access to what it believes to be the largest selection of
roofing and vinyl siding materials in the industry and with a knowledgeable
staff capable of providing product specific information, as well as credit
services and marketing support. For the year ended December 31, 1997, the
Company generated net sales of $959.3 million. On a pro forma basis
considering the Champ acquisition, the Company would have had net sales of
$1,132.9 million for 1997.

        The products distributed by the Company consist exclusively of roofing
and siding materials, windows and related tools and accessories for
residential and, to a lesser extent, commercial applications. The Company
markets these products on a wholesale basis primarily to small and
medium-sized roofing and siding contractors that are involved in the
replacement segment of the construction industry. ABC also distributes
products to builders and subcontractors involved in new construction projects.

        ABC was founded in 1982 by its President and Chief Executive Officer,
Kenneth A. Hendricks, who, as the owner of a successful roofing business, saw
a market for the Company's services. Since its inception, ABC has experienced
significant growth. The Company's net sales have increased from $446.4
million, for the year ended December 31, 1993, to $959.3 million, for the year
ended December 31, 1997, representing compound annual growth rates of 21.2%.
In addition, comparable distribution center sales have grown at an average
annual rate of 12.8% over the same period.

        Since January 1, 1993, the Company has completed 30 acquisitions,
acquiring 72 local distribution centers (net of consolidations). The Company
has historically selected acquisition candidates based, in part, on the
opportunity to improve their operating results. The Company seeks to leverage
its purchasing power, broad product selection and management expertise to
improve the financial performance of its acquired distribution centers while
maintaining the acquired customer bases. In 1997, the Company acquired two
larger distributors. In May 1997, the Company acquired Viking Aluminum
Producucts, Inc., a regional building supply distributor with 12 locations in
the northeastern United States.  In November 1997, the Company acquired Champ
Industries, Inc., a regional building supply distributor with 32 locations
located primarily in the southwestern and western United States.  The Company
believes that the ongoing consolidation in the building materials distribution
industry will continue to provide suitable acquisition candidates in the
future.

        PRODUCTS, CUSTOMERS AND MARKETS

        The roofing and vinyl siding products industry contains three primary
distribution channels: manufacturers' direct sales; mass merchandisers, such
as Home Depot; and wholesale distributors, such as the Company.  Mass
merchandisers primarily sell products to homeowners and small contractors,
tend to stock items across a multitude of buliding supply categories and stock
a relatively narrow selection of non- premium grade roofing and siding
products.  Typically, manufacturers do not sell products directly to retail
customers or small customers.

        The products distributed by the Company consist primarily of roofing
products (both residential and commercial), siding products, windows, and
related tools, equipment and accessories. ABC provides its customers with what
it believes to be the largest selection of roofing and vinyl siding materials
in the industry. The products that the Company distributes can be classified
in the following five categories:

                                       2
<PAGE>

        Residential roofing products and accessories. The Company distributes
a broad selection of shingles, felt, roof tile, wood shakes, flashings, vents
and other roofing products to residential roofing contractors. Principal
brands of residential roofing products include GAF(R), GS(R), CertainTeed(R),
Elk(R), Tamko(R) and Owens-Corning(R).

        Commercial roofing products and accessories. The Company distributes a
broad selection of modified bitumen, EPDM, hypalon, other rolled roofing,
felts, coatings, asphalt, flashings, vents, fasteners, roof insulation and
other roofing products to commercial roofing contractors. Principal brands of
commercial roofing products include Johns Manville(R), GAF(R), GS(R), US
Intec, Celotex(R), Firestone(R), Versico, Asphalt, Atlas(R),and Mule-Hide(R).
Mule-Hide primarily sells its private label roofing systems through ABC's
distribution centers.

        Siding products and accessories. The Company distributes a broad
selection of siding products to siding contractors. The Company's siding
products consist primarily of vinyl siding, soffits and accessories and, to a
lesser extent, aluminum and wood siding. Principal vinyl siding brands include
Alcoa(R), Wolverine(R), Certainteed(R) and Amcraft(R).

        Windows and accessories. The Company distributes a broad selection of
window products and accessories to residential window installers, including
vinyl, wood and aluminum window frames and single, double and triple glazed
windows. Principal window brands include CertainTeed(R), Simonton Windows(R),
Eagle Windows(R) and Weather-Shield(R).

        Other building products and accessories. The Company distributes a
variety of roofing and siding products to complement its primary product
lines. Such products include gutters, sheet metal, roofing and siding
equipment, tools and other related accessories.

        The following table sets forth certain information regarding the
Company's net sales by product for the years ended December 31, 1997, 1996 and
1995:

<TABLE>
<CAPTION>

                                       Total Net Sales
                                  ------------------------
Product Categories                 1997     1996     1995
------------------                ------------------------
<S>                               <C>      <C>      <C>
Residential roofing.............  $472.1   $391.8   $318.3
Commercial roofing..............   240.6    214.2    181.5
Siding..........................   129.5     90.5     70.6
Windows.........................    65.9     53.6     35.4
Other...........................    51.2     39.0     33.0
                                  ------------------------
    Total for all categories....  $959.3   $789.1   $638.8
                                  ========================
</TABLE>

        The Company distributes these products on a wholesale basis primarily
to small and medium-sized roofing and siding contractors that are involved in
the replacement segment of the construction industry. ABC also distributes
products to builders and subcontractors involved in new construction projects.

        SALES AND MARKETING

        As of December 31, 1997, the Company employed over 500 field sales
representatives. Each distribution center has at least two sales
representatives who are responsible for promoting ABC products and services in
their respective markets. The sales representatives report to the distribution
center manager and are supported by customer service representatives. A
substantial portion of each representative's pay is derived from sales
commissions. In addition, the Company employs a number of regional product
managers and sales managers who educate the Company's sales personnel and
customers regarding the technical specifications and marketability of certain
products.

                                       3
<PAGE>

        DISTRIBUTION CENTER OPERATIONS

        The Company operates 205 local distribution centers located in 40
states, and has a market presence in 48 of the 50 most populous metropolitan
areas in the United States. Since January 1, 1995, the Company has opened 32
distribution centers, closed 3 distribution centers and acquired an additional
67 distribution centers (net of consolidations) in connection with its
selective acquisition program. A typical distribution center is comprised of
showroom space, office space, warehouse and receiving space, secure outdoor
holding space and a loading dock. ABC's distribution centers range in size
from approximately 10,000 to approximately 110,000 square feet, with a typical
size of approximately 40,000 square feet.

        Each location is managed by a distribution center manager who oversees
the center's employees, including a credit manager, various sales personnel,
customer service representatives and delivery and warehouse personnel. The
Company allows each distribution center manager to alter the product mix of a
given center to meet local market demands and to stock regional products (such
as roof tile in the Florida, Texas and California markets). Distribution
center employees' bonus levels are largely driven by location profitability.
The Company believes its incentive programs have contributed significantly to
its growth and have helped it to achieve an average annual growth rate of
comparable distribution center sales of 12.8% over the past five years.

        The following table sets forth the Company's growth in terms of
distribution centers in each of the past three years:

<TABLE>
<CAPTION>
                                             1997    1996   1995
                                             --------------------
<S>                                           <C>     <C>    <C>
Distribution centers on January 1............ 157     126    109
Distribution centers acquired................  51      22     14
Distribution centers opened..................  11      14      7
Acquired distribution centers consolidated... (11)     (5)    (4)
Distribution centers closed..................  (3)      -      -
                                              ------------------
Distribution centers on December 31.......... 205     157    126
                                              ==================
</TABLE>

        COMPETITION

        The roofing and siding products distribution industry is highly
competitive and fragmented. The Company competes directly with a large number
of local and regional building products distributors and, in certain markets
and product categories, with two national distributors, Cameron Ashley
Building Products and Allied Building Products. The Company also competes to a
lesser extent with mass-merchandisers, such as Home Depot, and with direct
sales from building products manufacturers.

        PURCHASING

        ABC purchases its products directly from a wide variety of
manufacturers, including GAF, GS Roofing Products Company, Inc., Elk
Corporation of America, Owens-Corning Fiberglass Corporation, Johns Manville
Corporation and Alcoa Buiding Products, Inc.  Payment, discount and volume
purchase programs are negotiated directly by the Company with its major
suppliers, with a significant portion of the Company's purchases made from
suppliers offering these programs. The Company believes it is the largest or a
significant customer to many of its primary suppliers, and, as a result, is
able to negotiate volume discounts and other favorable terms. At 12.4% of the
Company's 1997 product purchases, GAF (including its subsidiary U.S. Intec)
was the only supplier which represented more than 10.0% of the Company's total
purchases. The Company typically purchases its products from manufacturers
pursuant to individual purchase orders, and does not generally enter into
long-term contracts for the purchase of products.

                                       4
<PAGE>

        SEASONALITY

        Because of cold weather conditions in many of the markets in which the
Company does business and the seasonal nature of the roofing and siding
business generally, the Company's revenues vary substantially throughout the
year, with its lowest revenues typically occurring in the months of December
through February.

        EMPLOYEES

        As of December 31, 1997, the Company employed 3,219 full-time and 50
part-time employees, of whom 22 were members of a union. The Company's
collective bargaining agreements with its union expire on various dates, from
May 1998 through September 1999. The Company believes that its relations with
its employees are good.

        ENVIRONMENTAL MATTERS

        A number of roofing materials are considered environmentally
hazardous. The Company typically handles and stores a variety of these
materials at its distribution center locations. The Company maintains
appropriate environmental compliance programs at each of its distribution
centers and has never been the subject of any material enforcement action by
any governmental agency.

        Many of the Company's distribution centers are located in areas of
current or former industrial activity, where environmental contamination may
have occurred. Under various federal, state and local environmental laws,
ordinances and regulations, a current or previous owner or operator of real
estate may be required to investigate and remediate releases or threatened
releases of hazardous or toxic substances or petroleum products located at
such property, and may be held liable for property damage and for
investigation and remediation costs in connection with the contamination.

        The Company does not believe there are any material environmental
liabilities at any of its distribution center locations. Nevertheless, there
can be no assurance that the Company's knowledge is complete with regard to
all material environmental liabilities and it could subsequently discover
potential environmental liabilities arising from its sites or from neighboring
facilities.

ITEM 2.  PROPERTIES

        The Company operates both owned and leased branches in 40 states.  Its
facilities range in size from approximately 10,000 to 110,000 square feet.
This building space is used for warehousing and distribution purposes and, to
a lesser extent, for sales and administrative purposes.  The Company owns a
118,000 square foot office building where its corporate offices are located in
Beloit, Wisconsin.  The Company believes its facilities are adequately
maintanined and utilized and are suitable for the purposes for which they are
used.  See Note 5 to the Consolidated Financial Statements of the Company for
a summary of payments due under the Company's leases.

        None of the Company's owned real properties are subject to any major
encumbrances.

                                       5
<PAGE>

        The following table sets the geographical location of the Company's
distribution centers as of December 31, 1997:

<TABLE>
<CAPTION>
                                   Total Number
                                        of
Region                              Locations
------                             ------------
<S>                                    <C>
Florida...........................       8
Lake Central (Great Lakes)........      21
Mid-Atlantic......................      17
Midwest...........................      32
New England.......................      18
Northern California and Hawaii....      14
Rocky Mountain....................      20
Southeast.........................      23
Southwest.........................      36
Western...........................      16
                                       ---
                                       205
                                       ===
</TABLE>

        The Company leases the majority of its properties from the Company's
sole stockholder and certain of his affiliates.

ITEM 3. LEGAL PROCEEDINGS

        The Company is a party to various litigation matters incidental to the
conduct of its business. The Company does not believe that the outcome of any
of the matters in which it is currently involved will have a material adverse
effect on its financial condition or results of operations.

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

        There were no matters submitted to a vote of security holders during
1997.

                                   PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
         MATTERS

        There is no public market for the stock of the Company.  There was one
holder of record of the Company's common stock as of December 31, 1997.

ITEM 6.  SELECTED FINANCIAL DATA

        The following table sets forth the selected consolidated financial
information of the Company for each of the five years in the period ended
December 31, 1997. The information contained in the following table should be
read in conjunction with, and is qualified in its entirety by reference to,
the information set forth under the caption "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and the Company's
audited consolidated financial statements and related notes included elsewhere
in this report.

                                       6
<PAGE>

<TABLE>
<CAPTION>

                                                               YEAR ENDED DECEMBER 31,
                                       ----------------------------------------------------------------------
                                         1997            1996           1995           1994            1993
                                       ----------------------------------------------------------------------
<S>                                    <C>            <C>             <C>            <C>             <C>
INCOME STATEMENT DATA:
Net sales............................. $959,321       $ 789,103       $638,821       $513,766        $446,384
Cost of sales.........................  744,186         615,627        501,027        403,032         350,987
Gross profit..........................  215,135         173,476        137,794        110,734          95,397
Operating expenses....................  194,802         152,316        121,335         98,462          84,796
                                       ----------------------------------------------------------------------
Operating income......................   20,333          21,160         16,459         12,272          10,601
Net interest expense..................  (16,480)        (10,457)        (9,092)        (5,466)         (4,144)
                                       ----------------------------------------------------------------------
Income from continuing operations
  before provision for income taxes...    3,853          10,703          7,367          6,806           6,457
Provision for income taxes (1)........      311             329            338            260             236
                                       ----------------------------------------------------------------------
Income from continuing operations.....    3,542          10,374          7,029          6,546           6,221
Discontinued operations (2)...........        -               -              -              -          (2,981)
                                       ----------------------------------------------------------------------
Net income............................ $  3,542       $  10,374       $  7,029       $  6,546        $  3,240
                                       ======================================================================

BALANCE SHEET DATA
(AT END OF PERIOD):
Accounts receivable, net.............. $143,106       $  92,360       $ 73,133       $ 49,756        $ 37,508
Inventories...........................  128,847          95,779         79,297         50,007          48,247
Total assets..........................  409,622          51,948        205,316        130,305          13,294
Accounts payable and accrued
 expenses.............................  100,483          71,805         61,069         47,221           4,858
Long-term debt, less current
 maturities...........................  281,206         139,664        113,397         62,040          50,277
Stockholder's equity..................   21,792          31,960         25,524          8,165           6,323
OTHER DATA:
Comparable distribution center
 sales growth (3).....................      5.2%           11.5%          17.3%          11.1%           18.7%

</TABLE>

(1)  Consists of certain state and local income taxes. As subchapter S
     corporations under the Internal Revenue Code of 1986, as amended (the
     "Code"), the Company and its subsidiaries have not been subject to U.S.
     federal income taxes or most state income taxes. Instead, such taxes have
     been paid by Mr. Hendricks. The Company has in the past made periodic
     distributions to Mr. Hendricks in respect of such tax liabilities. From
     and after the date of the Indenture, such distributions will be made in
     accordance with the terms of the Tax Allocation Agreement (as defined
     herein). See "Certain Transactions."

(2)  In 1993, one of the Company's wholly-owned subsidiaries made a decision
     to discontinue its manufacturing operations, which primarily produced
     vinyl windows. The results of operations of the subsidiary's
     manufacturing segment have been classified as discontinued operations for
     the year ended December 31, 1993.

(3)  "Comparable distribution center sales growth" is defined as the
     percentage change in distribution center sales as compared to sales for
     the same distribution centers in the prior year. For purposes of this
     calculation, only distribution centers that were open as of the begining
     of the applicable period are included.



ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS

        OVERVIEW

        The Company. ABC is the largest wholesale distributor of roofing
products and one of the largest wholesale distributors of vinyl siding
materials in the United States, operating 205 distribution centers located in
40 states. Since January 1, 1993, the Company has opened 41 distribution
centers, closed 3 distribution centers and acquired an additional 72
distribution centers (net of consolidations) in connection with its
acquisition program.

        Effects of Acquisitions. The Company has historically selected
acquisition candidates based, in part, on the opportunity to improve their
operating results. The Company seeks to leverage its purchasing power, broad
product selection and management expertise to improve the financial
performance of its acquired distribution centers while maintaining the
acquired customer bases. Results of operations reported herein for each period
only include results of operations for acquired businesses from their
respective dates of

                                       7
<PAGE>

acquisition. Full year operating results, therefore, could differ materially
from that presented. In addition, there has typically been a period following
each acquisition in which the acquired business does not perform at the same
level as the Company's existing distribution centers. As a result of the
Company's ongoing acquisition program, its results of operations have
historically reflected, and are likely to continue to reflect, the periodic
inclusion of under-performing businesses.

        The Company has accounted for its acquisitions using the purchase
method of accounting. As a result, these acquisitions have affected and will
prospectively affect the Company's results of operations in certain
significant respects. The aggregate acquisition costs are allocated to the
tangible and intangible assets acquired and liabilities assumed by the Company
based upon their respective fair values as of the acquisition date. The cost
of such assets are then amortized according to the classes of assets acquired
and the useful lives thereof. The Company has begun to acquire larger
distributors with established operating results, necessitating payment of
purchase prices in excess of the fair value of net assets acquired resulting
in goodwill, which is amortized over periods of 25-35 years. Similar future
acquisitions may result in additional amortization expense. In addition, due
to the effects of the increased borrowing to finance future acquisitions, the
Company's interest expense may increase in future periods.

        Additional information regarding the Company's acquisitions, including
unaudited condensed pro forma financial information with respect to the Champ
acquisition, is included in Note 2 to the Company's Consolidated Financial
Statements included elsewhere in this Form 10-K.

        Provision for Income Taxes. The Company and its subsidiaries have been
operated as subchapter S corporations under the Code. As a result, these
entities do not incur federal and state income taxes (except with respect to
certain states) and, accordingly, no discussion of income taxes is included in
"--Results of Operations" below. Federal and state income taxes (except with
respect to certain states) on the income of such corporations are incurred and
paid directly by Mr. Hendricks. Such corporations have historically made
periodic distributions to Mr. Hendricks in respect of such tax liabilities. In
connection with the Offering, the Company will enter into the Tax Allocation
Agreement with Mr. Hendricks pursuant to which he will receive distributions
from the Company with respect to taxes associated with the Company's income.
See "Certain Transactions."

        RESULTS OF OPERATIONS

        The following table summarizes the Company's historical results of
operations as a percentage of net sales for each of the three years ended
December 31, 1997:
                                            YEAR ENDED DECEMBER 31,
                                            -----------------------
                                             1997    1996    1995
INCOME STATEMENT DATA:                      -----------------------
Net sales................................   100.0%  100.0%  100.0%
Cost of sales............................    77.6    78.0    78.4
                                            ---------------------
Gross profit.............................    22.4    22.0    21.6
Operating expenses:
    Distribution centers.................    18.8    17.8    17.4
    General and administrative...........     1.4     1.5     1.6
    Amortization.........................     0.1     0.0     0.0
                                            ---------------------
      Total operating expenses...........    20.3    19.3    19.0
                                            ---------------------
Operating income.........................     2.1%    2.7%    2.6%
                                            =====================

                                       8
<PAGE>

        COMPARISON OF THE YEAR ENDED DECEMBER 31, 1997 TO THE YEAR ENDED
DECEMBER 31, 1996

        Net sales for the year ended December 31, 1997 increased by $170.2
million, or 21.6%, to $959.3 million from $789.1 million for the year ended
December 31, 1996. Components of the change in net sales are as follows:

<TABLE>
<CAPTION>

DISTRIBUTION CENTERS                         1997     1996  Increase % Increase
--------------------                        -----------------------------------
                                                 (IN MILLIONS)
<S>                                         <C>      <C>      <C>        <C>
In operation prior to January 1, 1995.....  $721.7   $695.5   $ 26.2       3.8%
Acquired in 1995..........................    42.0     31.8     10.2      32.1
Opened by the Company in 1995.............    20.5     18.1      2.4      13.3
Acquired in 1996..........................    52.3     33.1     19.2      58.0
Opened by the Company in 1996.............    26.4     10.6     15.8     149.1
Acquired  in 1997.........................    78.4        -     78.4         -
Opened by the Company in 1997.............    18.0        -     18.0         -
                                            -----------------------------------
     Total................................  $959.3   $789.1   $170.2      21.6%
                                            ===================================
</TABLE>

        The increase in net sales for distribution centers in operation prior
to January 1, 1995 was less than comparable increases in prior years primarily
due to the decreased demand nationwide for residential and commercial roofing
products which comprise 74.3% of the Company's net sales in 1997. Comparable
distribution center sales growth, which consists of stores opened prior to
January 1, 1996, was 5.2%

        Cost of sales for the year ended December 31, 1997 increased by $128.6
million, or 20.9%, to $744.2 million from $615.6 million for the year ended
December 31, 1996, primarily as a result of costs associated with increased
sales.  Cost of sales decreased from 78.0% in 1996 to 77.6% in 1997.
Increased sales of higher margin products such as vinyl siding and window
contributed to the increased gross margin percentage.  In addition, direct
sales (product shipped from the vendor directly to the customer's job site),
which have significantly lower margins than sales from the distribution
center's warehouse, decreased as a percentage of total sales in 1997.

        Distribution center operating income which consists of net sales less
cost of sales and operating expenses for the distribution centers, including
amortization expense, increased $1.2 million to $34.2 million in 1997 from $33.0
million in 1996. Components of distribution center operating income (loss) and
the change therein are as follows:

<TABLE>
<CAPTION>
DISTRIBUTION CENTERS                            1997    1996    CHANGE
--------------------                           -----------------------
                                                    (IN MILLIONS)
<S>                                            <C>      <C>       <C>
In operation prior to January 1, 1995.......   $34.3    $33.7     $0.6
Acquired in 1995............................     1.4      0.8      0.6
Opened by the Company in 1995...............    (0.3)    (0.3)     0.0
Acquired in 1996............................    (0.1)     0.1     (0.2)
Opened by the Company in 1996...............    (1.2)    (1.3)     0.1
Acquired in 1997............................     0.4        -      0.4
Opened by the Company in 1997...............    (0.3)       -     (0.3)
                                               -----------------------
     Total..................................   $34.2    $33.0     $1.2
                                               =======================
</TABLE>

        The tables set forth above illustrate that the Company's commitment to
growth has a significant impact on operating income.  Although distribution
centers in operation prior to January 1, 1995 accounted for only 75.2% of net
sales in 1997, such distribution centers accounted for 100.3% of distribution
center operating income.

        The increase in distribution center operating income for distribution
centers in operation prior to January 1, 1995 was less than increases
experienced in prior years primarily due to lower increases in sales than
anticipated.  The Company had increases in personnel and other expenses in
anticipation of volume in excess of what occurred.

                                       9
<PAGE>

        General and administrative expenses increased $2.0 million to $13.9
million in 1997 from $11.9 million in 1997 yet decreased as a percentage of
net sales to 1.4% from 1.5% in 1996. Major components of the increased
expenses were salaries and benefits to support the increased sales.

        Interest expense for the year ended December 31, 1997 increased by
$5.8 million, or 52.3%, to $16.9 million from $11.1 million for the year ended
December 31, 1996, primarily as a result of higher interest rates on the
senior subordinated debt as compared to the revolver utilized in the prior
year ($2.2 million) and increased borrowings related to acquisitions and
increased working capital needs ($4.0 million) offset by a lower overall
average borrowing rate on the revolver ($0.4 million).

COMPARISON OF THE YEAR ENDED DECEMBER 31, 1996 TO THE YEAR ENDED DECEMBER 31,
1995

        Net sales for the year ended December 31, 1996 increased by $150.3
million, or 23.5%, to $789.1 million from $638.8 million for the year ended
December 31, 1995. Components of the change in net sales are as follows:

<TABLE>
<CAPTION>
DISTRIBUTION CENTERS                            1996     1995    INCREASE  % INCREASE
--------------------                           -------------------------------------
                                                    (IN MILLIONS)
<S>                                            <C>      <C>       <C>
In operation prior to January 1, 1994........  $649.5   $587.2    $ 62.3     10.6%
Acquired in 1994.............................    16.0     13.1       2.9     22.1
Opened by the Company in 1994................    30.0     23.4       6.6     28.2
Acquired in 1995.............................    31.8      9.0      22.8    253.3
Opened by the Company in 1995................    18.1      6.1      12.0    196.7
Acquired in 1996.............................    33.1        -      33.1        -
Opened by the Company in 1996................    10.6        -      10.6        -
                                               ----------------------------------
     Total...................................  $789.1   $638.8    $150.3     23.5%
                                               ==================================
</TABLE>

        Cost of sales for the year ended December 31, 1996 increased by $114.6
million, or 22.9%, to $615.6 million from $501.0 million for the year ended
December 31, 1995, primarily as a result of costs associated with increased
sales. Cost of sales decreased as a percentage of net sales over the same
period to 78.0% in 1996 from 78.4% in 1995, primarily due to increased sales
of higher margin products such as vinyl siding and windows.

        Distribution center operating income, which consists of net sales less
cost of sales and operating expenses for the distribution centers, including
amortized expense, is a key measure that the Company uses to evaluate
individual distribution center performance. Distribution center operating
income increased $6.2 million to $33.0 million in 1996 from $26.8 million in
1995. Components of distribution center operating income (loss) and the change
therein are as follows:

<TABLE>
<CAPTION>
DISTRIBUTION CENTERS                        1996       1995   CHANGE
--------------------                       -------------------------
                                                   (IN MILLIONS)
<S>                                        <C>        <C>      <C>
In operation prior to January 1, 1994....  $33.4      $29.1    $ 4.3
Acquired in 1994.........................    0.1        0.0      0.1
Opened by the Company in 1994............    0.2       (0.9)     1.1
Acquired in 1995.........................    0.8       (0.7)     1.5
Opened by the Company in 1995............   (0.3)      (0.7)     0.4
Acquired in 1996.........................    0.1         --      0.1
Opened by the Company in 1996............   (1.3)        --     (1.3)
                                           -------------------------
     Total...............................  $33.0      $26.8    $ 6.2
                                           =========================
</TABLE>

        Distribution centers in operation prior to January 1, 1994 accounted
for only 82.3% of sales in 1996, but accounted for 101.2% of distribution
center operating income.

                                       10
<PAGE>

        General and administrative expenses increased $1.5 million to $11.9
million in 1996 from $10.4 million in 1995 while decreasing as a percentage of
net sales to 1.5% in 1996 compared to 1.6% in 1995. Major components of the
increased expenses were salaries and benefits and a full year of depreciation
on the Company's new headquarters building as compared to a partial year of
depreciation in 1995.

        Interest expense for the year ended December 31, 1996 increased by
$1.4 million, or 14.4%, to $11.1 million from $9.7 million for the year ended
December 31, 1995, as a result of greater borrowings associated with increased
working capital needs due to the Company's growth, partially offset by a
decrease in the interest rate on such borrowings.

        LIQUIDITY AND CAPITAL RESOURCES

        Cash Flows from Operating Activities. Net cash provided by (used in)
operations was $(1.7) million for the year ended December 31, 1997 compared to
$4.8 million for the year ended December 31, 1996 and $(6.3) million for the
year ended December 31, 1995.  The decrease in 1997 was due to decreased
earnings as well as increases in receivables and inventory which were not
offset by an increase in accounts payable.  The increase in 1996 occurred
primarily as a result of increased earnings of $3.3 million, increased
depreciation and amortization of $2.3 million and the effect of changes in
operating assets and liabilities aggregating $5.1 million.

        Cash Flows from Investing Activities. Net cash used in investing
activities was $(111.5) million, $(26.7) million and $(25.0) million for the
years ended December 31, 1997, 1996 and 1995, respectively. The Company's
investing activities consist primarily of costs associated with the
acquisition of building products distributors and, to a lesser extent, capital
expenditures.  Acquisition of businesses were $86.7 million, $12.7 million and
$5.6 million in the fiscal years ended December 31, 1997, 1996 and 1995,
respectively.  Capital expenditures were $25.3 million, $14.7 million and
$19.9 million in the fiscal years ended December 31, 1997, 1996 and 1995,
respectively.

        Cash Flows from Financing Activities. Net cash provided by financing
activities was $114.7 million, $21.8 million and  $32.3 million  for the years
ended December 31, 1997, 1996 and 1995, respectively. The Company's financing
activities consist primarily of the borrowings incurred in connection with the
growth of its existing distribution centers as well as acquisition of building
products distributors and, to a lesser extent, distributions to the Company's
sole stockholder in respect of tax liabilities related to the Company.

        Liquidity. The Company's principal sources of funds are anticipated to
be cash flows from operating activities and borrowings under its revolving
credit agreement. The Company believes that these funds will provide the
Company with sufficient liquidity and capital resources for the Company to
meet its financial obligations, as well as to provide funds for the Company's
working capital, capital expenditures and other needs for the foreseeable
future. No assurance can be given, however, that this will be the case.

        Senior Subordinated Notes:  As of December 31, 1997, the Company had
$100 million of unsecured Senior Subordinated Notes bearing interest at 10
5/8%.  These notes mature on May 15, 2007 and are subordinate to borrowings
under the revolving credit agreement.

        Revolving Credit Agreement:  The Company is party to a credit
agreement due June, 2000, which as of December 31, 1997, permitted revolving
borrowings of up to $200 million under the revolving line of credit
indebtedness (the "Revolver").  Debt outstanding under this agreement as of
December 31, 1997 was $163.8 million and borrowings under the Revolver are
secured by accounts receivable and inventory. The company is currently
negotiating an increase in the permitted borrowings under the Revolver to $250
million from $200 million, and expects to enter into an amendment effecting
such increase in the second quarter of 1998. However there can be no assurance
that such amendment will be entered into at such time or at all.

        The Company believes that its current cash position, funds from
operations, and the availability of funds under its revolving credit
agreements, will be sufficient to meet anticipated requirements for working
capital for the next twelve months.

                                       11
<PAGE>

        YEAR 2000 ISSUE

        The Company has developed a plan to modify its information technology
to be ready for the year 2000 and has begun converting critical data
processing systems.  The Company currently expects the project to be
substantially complete by early 1999 and to cost between $250,000 and
$300,000. This estimate includes internal costs, but excludes the costs to
upgrade and replace systems in the normal course of business.  The Company
does not expect this project to have a significant effect on operations.  As
of December 31, 1997, approximately $100,000 had been expensed.  The Company
will continue to implement systems with strategic value, though some projects
may be delayed due to resource constraints.

        SEASONALITY

        Because of cold weather conditions in many of the markets in which the
Company does business and the seasonal nature of the roofing and siding
business generally, the Company's revenues vary substantially throughout the
year, with its lowest revenues typically occurring in the months of December
through February.

        INFLATION

        The Company believes that inflation did not have a material impact on
its results of operations for the three years ended December 31, 1997.

        FORWARD LOOKING STATEMENTS

        This Management's Discussion and Analysis of Financial Condition and
Results of Operations ("MD&A") contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as a amended (the
"Securities Act"). Such forward-looking statements are based on the beliefs of
the Company's management as well as on assumptions made by and information
currently available to the Company at the time such statements were made. When
used in this MD&A, the words "anticipate," "believe," "estimate," "expect,"
"intends" and similar expressions, as they relate to the Company are intended to
identify forward-looking statements, which include statements relating to, among
other things; (i) the ability of the Company to continue to successfully compete
in the roofing and vinyl siding products market; (ii) the anticipated benefits
from its acquisition strategy; (iii) the continued effectiveness of the
Company's sales and marketing strategy; and (iv) the ability of the Company to
continue to successfully develop and launch new distribution centers. Actual
results could differ materially from those projected in the forward-looking
statements as a result of the matters discussed herein and certain economic and
business factors, some of which may be beyond the control of the Company.

ITEM 8:  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

        The financial statements and schedules are listed in Part IV Item 14
of this Form 10-K.

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE

        None.

                                       12
<PAGE>

                                   PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

        The following table sets forth certain information with respect to (i)
each member of the Company's Board of Directors (the "Board"), (ii) each
executive officer of the Company and (iii) certain key employees of the
Company.

NAME                     AGE           POSITION
------------------------------------------------------------------------------
Kenneth A. Hendricks.... 56    President, Chief Executive Officer and Director
Diane Hendricks......... 50    Executive Vice President, Secretary and Director
Kendra Story............ 38    Chief Financial Officer, Treasurer and Director
Jeffrey Stentz.......... 37    Director of Acquisitions
Robert Bartels.......... 49    Vice President-Operations
Gil Aleman.............. 54    Director
Kent Nelson............. 53    Director

        Kenneth A. Hendricks has served as President, Chief Executive Officer
and a director of the Company since its inception in June 1982. Mr. Hendricks
is also President of Amcraft and Chairman of the Board of Mule-Hide. Prior to
1982, Mr. Hendricks was the owner and operator of a number of successful
exterior building contracting businesses and real estate businesses. Mr.
Hendricks is a member of the board of directors of Blackhawk Bancorp, Inc.

        Diane Hendricks has served as Executive Vice President, Secretary and
a director of the Company since its inception. Ms. Hendricks is also President
of American Patriot Insurance Agency, Inc. Ms. Hendricks is primarily
responsible for overseeing insurance, personnel matters, bonus programs,
profit sharing and legal matters for the Company.

        Kendra Story has served as the Chief Financial Officer, Treasurer and
a director of the Company since its inception. Ms. Story is primarily
responsible for overseeing finance, accounting, internal audit and inventory
management for the Company.

        Robert Bartels has served as the Company's Vice President-Operations
since September of 1997, prior to then, he was the Director of Purchasing.
From 1992 to 1996, Mr. Bartels served as national marketing and sales director
for Globe Industries Incorporated and IKO Industries, Inc., each of which is a
manufacturer of roofing materials. From 1971 to 1992, Mr. Bartels was employed
by The Celotex Corporation, a manufacturer of roofing and siding products, in
a variety of positions with increasing responsibility, most recently as vice
president of sales.

        Jeffrey Stentz has served as the Company's Director of Acquisitions
since 1995. From 1993 to 1995, Mr. Stentz served as chief financial officer of
PDQ Food Stores, Inc., a privately owned convenience food store chain. Prior
to that time, Mr. Stentz was a senior lending officer at Valley Bank and a
credit analyst at NBD Bank and at First Interstate Bancorp.

        Gil Aleman has served as a director of the Company since 1997. Mr.
Aleman is recently retired from Jim Walter Corporation, where he served as
President of its Celotex roofing division from 1985 to 1997. Prior to 1985,
Mr. Aleman served as President of Jim Walter Window Components, a division of
Jim Walter Corporation.

        Kent Nelson has served as a director of the Company since 1997. Mr.
Nelson has been Managing Director and a member of the Executive Committee of
Aon Risk Services, Inc., an insurance company,

                                       13
<PAGE>

since 1989, and is an adjunct professor at the Management Graduate School of
Business of Northern Illinois University.

        Kenneth and Diane Hendricks are husband and wife. Kendra Story is a
daughter of Mr. Hendricks.

ITEM 11.  EXECUTIVE COMPENSATION

        The compensation of executive officers of the Company is determined by
the Board. The following Summary Compensation Table includes individual
compensation information for the Chief Executive Officer and each of the four
other most highly compensated executive officers of the Company in the year
ended December 31, 1997 for services rendered in all capacities to the Company
and its subsidiaries during the year ended December 31, 1997.

<TABLE>
<CAPTION>
                                                             All Other
Name and Principal Position         Annual Compensation   Compensation (1)
--------------------------------------------------------------------------
                                    Annual       Bonus
                                   ---------------------
<S>                                <C>          <C>           <C>
Kenneth A. Hendricks.............  $999,989     $     -       $6,133
 President, Chief Executive
 Officer and Director

Diane Hendricks..................   200,000           -        5,618
 Executive Vice President,
 Secretary and Director

Kendra Story.....................   151,308      26,733        4,864
 Treasurer, Chief Financial
 Officer and Director

Robert Bartels...................   138,462      25,000        2,200
 Vice President - Operations

Jeffrey Stentz...................   109,165      50,000        3,880
 Director of Acquisitions
</TABLE>

(1)     Consists of estimated amounts paid by the Company for automobiles and
        for matching payments under the Company's 401(k) Profit Sharing Plan,
        respectively, as follows: Mr. Hendricks--$2,775 and $3,358; Ms.
        Hendricks--$2,200 and $3,418; Ms. Story--$2,200 and $2,664; Mr.
        Bartels--$2,200 and $0; and Mr. Stentz--$2,200 and $1,680.

        For a description of the employment agreement to be entered into
between Mr. Hendricks and the Company, see "Certain Transactions."

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

        All of the Company's capital stock is owned beneficially and of record
by the Company's founder, President and Chief Executive Officer. There are no
outstanding options or other rights to purchase any shares of the Company's
capital stock.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

        ABC transacts business with a number of entities, including Corporate
Contractors, Inc. ("CCI"),  ABC Express, Inc. ("Express"), Water Tower
Industrial Properties ("Water Tower"), Hendricks Commercial Properties
("HCP"), Hendricks Carolina Properties, L.L.C. ("Carolina"), Patriot, Ltd.
("Patriot") and American Patriot Insurance Agency, Inc. ("APIA")
(collectively, the "Related Entities"), which are owned by ABC's sole
stockholder and his spouse. CCI performs construction work such as interior
renovations and additions at ABC locations. Express provides transportation
services for the Company. The Company

                                       14
<PAGE>

leases properties from Water Tower, Carolina and HCP. The Company believes
that the transactions between ABC and the Related Entities have generally been
conducted on an arm's-length basis.

        In connection with certain of the Company's acquisitions, the
Company's sole stockholder or his affiliates have purchased the real estate of
the acquired business, which the Company has then leased from Mr. Hendricks or
his affiliates. In addition, certain of the distribution centers opened by the
Company are located in facilities purchased by and leased from Mr. Hendricks
or his affiliates. These real estate purchases have historically been financed
with a combination of debt financing and equity, and a portion of the equity
has sometimes been funded by Mr. Hendricks with borrowings from ABC. The
aggregate amount of such borrowings from ABC outstanding as of December 31,
1997 was approximately $7.3 million. The Company and Mr. Hendricks currently
intend to continue to acquire properties for the Company's occupancy using
such method of financing. The Company's debt agreements will permit it to lend
additional amounts to Mr. Hendricks in connection with such transactions in
the future. Interest is charged on such loans at a rate comparable to the rate
the Company pays on its bank borrowings. The maximum amount of such borrowings
at any time during the three years ended December 31, 1997, occurred in April
1997 and aggregated $8.2 million. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations--Liquidity and Capital
Resources" and "Description of the Notes--Certain Covenants--Restricted
Payments."

        As described above, as of December 31, 1997, the Company leased 83
facilities from Mr. Hendricks or his affiliates. For the year ended December
31, 1997, the Company paid $7.4 million in lease payments to Mr. Hendricks or
his affiliates in respect of such properties. During 1997, the Company entered
into a series of amended leases with lease terms of at least ten years for
such properties. Annual payments due under such leases will be based on the
prevailing market rates in the areas in which such properties are located and
will be adjusted annually to reflect changes in the consumer price index.

        As of December 31, 1997, 1996 and 1995, the Company had obligations
outstanding under guarantees and letters of credit in respect of debt of Mr.
Hendricks and his affiliates in the amounts of $3.7 million, $3.9 million and
$2.7 million, respectively. Such guarantees and letters of credit are
primarily related to certain indebtedness of the Company which was assumed by
Mr. Hendricks. The maximum amount of such guarantees and letters of credit at
any time during the past three years occurred in July 1996 and aggregated $4.0
million.

        Patriot, an insurance company owned by Mr. Hendricks and his spouse,
provides certain insurance coverage to the Company, which is subsequently
reinsured in part by third party insurance carriers. APIA serves as a broker
with respect to insurance facilities for the Company and the Related Entities.
The Company paid Patriot, net of reimbursements, $5.9 million, $5.3 million
and $5.2 million in 1997, 1996 and 1995, respectively, for reported and
unreported claim liabilities (as determined by an unrelated third- party
claims adjusting service) that are not the subject of reinsurance, as well as
costs of reinsurance premiums and other related costs.

        During 1997, the Company entered into an employment agreement (the
"Employment Agreement") with Mr. Hendricks which will provide for an annual
salary of $1.0 million, subject to annual increases, if approved by a majority
of ABC's disinterested directors, of up to 20.0% of his salary in the
preceding year. The Employment Agreement will be for a term of three years,
renewable annually thereafter upon the mutual agreement of the Company and Mr.
Hendricks.

        The Company has entered into a Tax Allocation Agreement with Mr.
Hendricks pursuant to which he will receive distributions from each of the
Company and its wholly owned subsidiaries with respect to taxes payable by Mr.
Hendricks associated with the operations of each entity.

                                       15
<PAGE>

                                   PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a)  (1.) FINANCIAL STATEMENTS


AMERICAN BUILDERS & CONTRACTORS SUPPLY CO., INC.


                                                                  PAGE
                                                                  ----
Report of Ernst & Young LLP, Independent Auditors................  17
Consolidated Balance Sheets as of December 31, 1997 and 1996.....  18
Consolidated Statements of Income for the years ended
  December 31, 1997, 1996 and 1995...............................  19
Consolidated Statements of Stockholder's Equity for the years
  ended December 31, 1997, 1996 and 1995.........................  20
Consolidated Statements of Cash Flows for the years ended
 December 31, 1997, 1996 and 1995................................  21
Notes to Consolidated Financial Statements.......................  22



        (2.)  FINANCIAL STATEMENT SCHEDULE

        Schedule II - Valuation and Qualifying Accounts

        All other schedules for which provision is made in the applicable
accounting regulation of the Securities and Exchange Commission are not
required under the related instructions or are not applicable and, therefore,
have been omitted.

        (3.)  LISTING OF EXHIBITS

        Exhibit 27 - Financial Data Schedule

(b)  CURRENT REPORTS ON FORM 8-K:

        During the fourth quarter ended December 31, 1997, the Company filed
Form 8-K dated November 17, 1997 relating to its acquisition of Champ
Industries, Inc.  Item 2, "Acquisition or Disposition of Assets" was filed on
November 17, 1997, and Item 7, "Financial Statements and Exhibits," was filed
by amendment subsequent to December 31, 1997.

(c)  EXHIBITS:

        See Exhibit Index submitted as a separate section of this report.

                                       16
<PAGE>

              REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS


The Board of Directors
American Builders & Contractors Supply Co., Inc.

        We have audited the accompanying consolidated balance sheets of
American Builders & Contractors Supply Co., Inc., and subsidiaries (the
Company) as of December 31, 1997 and 1996, and the related consolidated
statements of income, stockholder's equity and cash flows for each of the
three years in the period ended December 31, 1997. Our audits also included
the financial statement schedule listed in the index at Item 14(a). These
financial statements and schedules are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements and schedule based on our audits.

        We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

        In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the consolidated financial
position of the Company at December 31, 1997 and 1996, and the consolidated
results of its operations and its cash flows for each of the three years in
the period ended December 31, 1997, in conformity with generally accepted
accounting principles.  Also, in our opinion, the related financial statement
schedule, when considered in relation to the basic financial statements taken
as a whole, presents fairly in all material respects the information set forth
therin.


                                                 ERNST & YOUNG LLP

Milwaukee, Wisconsin
March 25, 1998

                                       17
<PAGE>

               AMERICAN BUILDERS & CONTRACTORS SUPPLY CO., INC.
                         CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                  December 31,
                                        -----------------------------
                                             1997             1996
                                        -----------------------------
<S>                                     <C>               <C>
ASSETS
Current assets:
   Cash................................ $  4,139,758      $ 2,630,337
   Accounts receivable, less
    allowance for doubtful accounts
    of $5,949,000--1997 and
    $4,325,000--1996...................  143,105,577       92,360,063
   Inventories.........................  128,846,638       95,778,586
   Prepaid expenses and other..........    3,762,591        1,544,128
                                        -----------------------------
      Total current assets.............  279,854,564      192,313,114
Property and equipment, net (Note 4)...   71,614,380       49,944,290
Net receivable from sole
 stockholder (Note 6)..................    7,328,218        5,149,185
Goodwill, net of accumulated
 amortization of $500,089--1997 and
 $112,817--1996........................   41,732,490        2,947,183
Other intangible assets, net of
 accumulated amortization of
 $786,522--1997 and
 $410,246--1996........................    7,987,953          363,963
Security deposits......................    1,025,844        1,117,855
Other assets...........................       78,246          112,723
                                        -----------------------------
                                        $409,621,695     $251,948,313
                                        =============================
LIABILITIES AND STOCKHOLDER'S EQUITY

Current liabilities:
   Accounts payable.................... $ 78,489,098     $ 57,700,357
   Accrued liabilities.................   21,994,354       14,104,151
   Current portion of long-term
    debt (Note 3)......................    6,140,688        8,519,814
                                        -----------------------------
     Total current liabilities.........  106,624,140       80,324,322
Long-term debt (Note 3)................  281,205,914      139,663,817
Commitments and contingent liabilities
 (Notes 5, 6 and 7)
Stockholder's equity:
   Common stock  no par value; 10,000
    shares authorized, 147.04
    shares issued and outstanding......      109,001          109,001
    Additional paid-in capital.........    1,755,054        1,215,053
    Retained earnings..................   19,927,586       30,636,120
                                        -----------------------------
     Total stockholder's equity........   21,791,641       31,960,174
                                        -----------------------------
                                        $409,621,695     $251,948,313
                                        =============================
</TABLE>
See accompanying notes.

                                       18
<PAGE>

            AMERICAN BUILDERS & CONTRACTORS SUPPLY CO., INC.
                   CONSOLIDATED STATEMENTS OF INCOME


<TABLE>
<CAPTION>
                                               YEAR ENDED DECEMBER 31,
                                    --------------------------------------------
                                        1997            1996            1995
                                    --------------------------------------------
<S>                                 <C>             <C>             <C>
Net sales.......................... $959,321,241    $789,102,559    $638,821,047
Cost of sales......................  744,186,017     615,626,559     501,026,597
                                    --------------------------------------------
Gross profit.......................  215,135,224     173,476,000     137,794,450
Operating expenses:
  Distribution centers (Note 5)....  180,158,358     140,108,749     110,783,470
  General and administrative.......   13,896,888      11,878,553      10,383,029
  Amortization of intangible assets      746,875         328,614         168,745
                                    --------------------------------------------
                                     194,802,121     152,315,916     121,335,244
                                    --------------------------------------------
Operating income...................   20,333,103      21,160,084      16,459,206
Other income (expense):
  Interest income..................      469,645         689,205         652,978
  Interest expense.................  (16,949,586)    (11,146,057)     (9,745,252)
                                    --------------------------------------------
                                     (16,479,941)    (10,456,852)     (9,092,274)
                                    --------------------------------------------
Income before provision for
 income taxes......................    3,853,162      10,703,232       7,366,932
Provision for income taxes.........      310,838         329,509         338,386
                                    --------------------------------------------
Net income......................... $  3,542,324    $ 10,373,723    $  7,028,546
                                    ============================================
</TABLE>





                        See accompanying notes.

                                       19
<PAGE>

            AMERICAN BUILDERS & CONTRACTORS SUPPLY CO., INC.
            CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY


<TABLE>
<CAPTION>
                                     COMMON       ADDITIONAL      RETAINED       TOTAL STOCK-
                                     STOCK      PAID-IN CAPITAL   EARNINGS      HOLDER'S EQUITY
                                    -----------------------------------------------------------
<S>                                 <C>            <C>           <C>             <C>
Balance at December 31, 1994......  $109,001       $1,215,053    $20,702,521     $ 22,026,575
Net income........................         -                -      7,028,546        7,028,546
Distributions to sole stockholder.         -                -     (3,530,897)      (3,530,897)
                                    ---------------------------------------------------------
Balance at December 31, 1995......   109,001        1,215,053     24,200,170       25,524,224
Net income........................         -                -     10,373,723       10,373,723
Distributions to sole stockholder.         -                -     (3,937,773)      (3,937,773)
                                    ---------------------------------------------------------
Balance at December 31, 1996......   109,001        1,215,053     30,636,120       31,960,174
Net income........................         -                -      3,542,324        3,542,324
Contributions by sole stockholder.         -          540,001              -          540,001
Distributions to sole stockholder.         -                -    (14,250,858)     (14,250,858)
                                    ---------------------------------------------------------
Balance at December 31, 1997......  $109,001       $1,755,054    $19,927,586      $21,791,641
                                    =========================================================
</TABLE>

                        See accompanying notes.

                                       20
<PAGE>

            AMERICAN BUILDERS & CONTRACTORS SUPPLY CO., INC.
                 CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                              YEAR ENDED DECEMBER 31,
                                              --------------------------------------------------
                                                    1997               1996              1995
                                              --------------------------------------------------
<S>                                           <C>                  <C>              <C>
OPERATING ACTIVITIES
Net income................................... $   3,542,324        $10,373,723      $  7,028,546
Adjustments to reconcile net income to cash
 provided by (used in) operating activities:
    Depreciation.............................    11,116,823          8,750,803         6,639,351
    Amortization.............................       746,875            328,614           168,745
    Amortization of deferred financing costs.       232,628                  -                 -
    Provision for doubtful accounts..........     4,463,785          3,603,631         3,164,991
    Loss on disposal of property and equipment      305,934             17,412           103,428
    Change in operating assets and liabilities:
       Accounts receivable...................   (12,972,988)       (18,328,728)      (19,061,181)
       Inventories...........................    (2,979,764)        (9,832,405)      (13,033,846)
       Prepaid expenses and other............    (1,855,197)          (142,212)         (101,276)
       Security deposits.....................       295,587           (570,341)          (77,921)
       Other assets..........................       843,321           (179,614)         (143,021)
       Accounts payable......................    (9,061,854)         7,961,040         6,929,014
       Accrued liabilities...................     3,627,663          2,774,544         2,101,027
                                              --------------------------------------------------
         Cash provided by (used in)
          operating activities...............    (1,694,863)         4,756,467        (6,282,143)
INVESTING ACTIVITIES
Additions to property and equipment..........   (25,346,559)       (14,697,361)      (19,922,034)
Proceeds from disposal of property
 and equipment...............................       528,222            688,209           445,121
Acquisition of businesses....................   (86,687,666)       (12,684,977)       (5,571,511)
                                              --------------------------------------------------
         Cash used in investing activities...  (111,506,003)       (26,694,129)      (25,048,424)
FINANCING ACTIVITIES
Net borrowings under line of credit..........    47,284,907         23,381,086        23,524,699
Proceeds from long-term debt.................   100,109,172          9,734,539        14,983,005
Payments on long-term debt...................   (13,221,806)        (6,175,029)       (4,147,483)
Net change in receivable from/payable to
 sole stockholder............................    (1,639,033)        (1,177,384)        1,487,500
Distributions paid to sole stockholder.......   (14,250,858)        (3,937,773)       (3,530,897)
Deferred financing costs.....................    (3,572,095)                 -                 -
                                              --------------------------------------------------
         Cash provided by financing activities  114,710,287         21,825,439        32,316,824
                                              --------------------------------------------------
Net increase (decrease) in cash..............     1,509,421           (112,223)          986,257
         Cash at beginning of year...........     2,630,337          2,742,560         1,756,303
                                              --------------------------------------------------
         Cash at end of year................. $   4,139,758      $   2,630,337     $   2,742,560
                                              ==================================================
Supplemental disclosures of cash flow
 information are as follows:
         Cash paid for interest.............. $  15,246,275      $  10,982,497     $   9,355,205
         Cash paid for income taxes..........       382,475            345,459           344,151

</TABLE>

                        See accompanying notes.

                                       21
<PAGE>

            AMERICAN BUILDERS & CONTRACTORS SUPPLY CO., INC.
               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           December 31, 1997

1. NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

        NATURE OF BUSINESS

        The accompanying consolidated financial statements include the
accounts of American Builders & Contractors Supply Co., Inc. (ABC or the
Company) and its wholly owned subsidiaries, Mule-Hide Products Co., Inc.
(Mule-Hide), and Amcraft Building Products Co., Inc. (Amcraft). During
1997, Mule- Hide and Amcraft, which previously were owned by ABC's sole
stockholder, were contributed to ABC. At the same time, Hendricks Real
Estate Properties, Inc., which was also owned by ABC's sole stockholder,
was merged into ABC.  These transactions were transfers among entities
under common control and, accordingly, were accounted for using
historical costs in a manner similar to that in pooling of interests
accounting (i.e. including retroactive combination).

        The Company is primarily engaged in the sale of roofing and
siding products throughout the United States. There were 205, 157 and
126 distribution center locations at December 31, 1997, 1996 and 1995,
respectively.

        INVENTORIES

        Inventories, which consist primarily of purchased roofing and
siding products, are stated at the lower of cost (average cost basis) or
market.

        PROPERTY AND EQUIPMENT

        Property and equipment additions (including leasehold
improvements) are capitalized at cost. Depreciation on these assets is
calculated using the straight-line method over the estimated useful
lives of the related assets or, in the case of leasehold improvements,
the life of the lease, if shorter. Estimated useful lives are as follows
(in years):

        Buildings and Improvements.......... 39 years
        Warehouse equipment................. 5-7 years
        Vehicles............................ 5-10 years
        Office furniture and equipment...... 3-7 years
        Leasehold improvements.............. 5 years or life of
                                             lease, if less

        GOODWILL

        Goodwill recorded in acquisitions of businesses is amortized over 25
to 35 years using the straight-line method.

        OTHER INTANGIBLE ASSETS

        Other intangible assets include non-complete agreements and deferred
financing costs, which are amortized over the term of the respective
agreements or loans (ranging from 3 to 15 years).

        ADVERTISING

        Advertising costs are expensed in the period incurred. Total
advertising expense was $3,895,936, $3,311,658 and $2,481,540 for 1997,
1996 and 1995, respectively.

                                       22
<PAGE>

            AMERICAN BUILDERS & CONTRACTORS SUPPLY CO., INC.
        NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

        INCOME TAXES

        ABC and its subsidiaries have elected to be treated as Subchapter
S Corporations for federal and state income tax purposes. As a result, the
Company's sole stockholder includes the taxable income of ABC and its
subsidiaries in his personal income tax returns. Accordingly, with the exception
of the amounts described in the following paragraph, the accompanying financial
statements include no provision or liability for income taxes.

        Certain states impose a corporate state tax on earnings of a Subchapter
S Corporation. Provisions of $310,838, $329,509 and $338,386 have been made for
such income taxes for the years ended December 31, 1997, 1996 and 1995,
respectively.

        Net income differs from income currently taxable to the Company's sole
stockholder due to certain items which are reported differently for financial
reporting purposes than for income tax purposes; principally inventory costs
capitalized, bad debts and depreciation.

        REVENUE RECOGNITION

        The Company recognizes revenue upon delivery of product to the customer,
which typically occurs at the Company's distribution center locations.

        LATE PAYMENT CHARGES

        Late payment charges are recorded in connection with past due receivable
balances and are reflected as a reduction to the expenses incurred in collecting
those accounts, all within distribution center operating expenses.

        USE OF ESTIMATES

        The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.

        RECLASSIFICATIONS

        Certain 1996 and 1995 amounts were reclassified to conform with 1997
presentation.

2. BUSINESS ACQUISITIONS

        All business acquisitions consummated through December 31, 1997 have
been accounted for using the purchase method and operations of such acquisitions
are included in the Company's financial statements from the respective dates of
acquisition.

        1997 Acquisitions

        On November 3, 1997, the Company acquired the stock or assets of five
corporations affiliated with Champ Industries, Inc. (Champ) for a purchase
price of approximately $61 million, which included the pay-off of certain
Champ debt and direct acquisition costs.  Champ was engaged primarily in the
wholesale distribution and sale of roofing material and supplies (primarily in
Texas and California). The excess of cost over the fair value of the net assets
acquired, which approximated $36 million, is being amortized on a straight line
basis over 35 years. The allocation of the purchase price of Champ is tentative
pending completion of determing the closing net worth adjustment. Subsequent to
the business combination, the Champ entities acquired through stock acquisitions
were merged into the Company.

                                       23
<PAGE>

                       AMERICAN BUILDERS & CONTRACTORS
   SUPPLY CO., INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

        On May 19, 1997, the Company acquired certain assets and assumed
certain liabilites of Viking Products, Inc. and certain assets of Viking
Aluminum Products, Inc. (collectively, Viking).  The purchase price was
approximately $26 million, which included a $3,000,000 seller note. Viking was
a regional distributor of residential roofing, siding and window products to
customers located primarily in the northeastern U.S. The excess of cost over
the fair value of the net assets acquired, which approximated $2.85 million,
is being amortized on a straight line basis over 25 years.

        During 1997, the Company also made several other relatively small
acquisitions with an aggregate cost of approximately $3.5 million.

        1996 and 1995 Acquisitions

        During the year ended December 31, 1996, ABC acquired the inventory,
accounts receivable and fixed assets of seventeen locations for a total
purchase price of approximately $15,205,000. In connection with these
transactions, the Company recorded $2,510,000 in goodwill.

        During the year ended December 31, 1995, ABC acquired the inventory,
accounts receivable and fixed assets of eleven locations for a total purchase
price of approximately $5,905,000. In connection with these transactions, the
Company recorded $550,000 in goodwill.

        A summary of the purchase allocation for the acquisitions is as
follows:

<TABLE>
<CAPTION>
                                 1997          1996         1995
                            ---------------------------------------
<S>                         <C>            <C>           <C>
Fixed assets............... $  8,274,510   $ 1,527,716   $  573,744
Inventories................   30,088,288     6,649,324    3,743,218
Accounts receivable........   42,236,311     4,502,460    1,031,452
Other......................    1,575,473        15,529        6,097
Goodwill and other
 intangible assets.........   43,616,917     2,510,000      550,000
                            ---------------------------------------
                             125,791,499    15,205,029    5,904,511
Less: seller notes.........   (3,150,000)   (2,520,052)    (333,000)
      liabilities assumed..  (35,953,833)            -            -
                            ---------------------------------------
Net effect on cash......... $ 86,687,666   $12,684,977   $5,571,511
                            =======================================
</TABLE>

        Pro Forma Results

        Pro forma unaudited results of operations for the years ended December
31, 1997 and 1996, assuming the 1997 purchase of Champ had been consummated as
of January 1, 1996, are as follows:

<TABLE>
<CAPTION>
                                           YEAR ENDED DECEMBER 31,
                                        ----------------------------
                                              1997          1996
                                        ----------------------------
<S>                                     <C>             <C>
Net sales.............................. $1,132,877,000  $986,611,000
Net income.............................      6,229,000    13,730,000
</TABLE>

        Unaudited pro forma financial information for other acquisitions is
not presented because those acquisitions did not have a material impact on the
Company's results of operations.

        The pro forma results do not purport to represent what the Company's
net sales or net income would actually have been if the acquisiton in fact had
occurred at the beginning of the periods indicated.

                                       24
<PAGE>

                             AMERICAN BUILDERS &
         CONTRACTORS SUPPLY CO., INC. NOTES TO CONSOLIDATED FINANCIAL
                           STATEMENTS--(Continued)



3. LONG-TERM DEBT

        Long-term debt consists of the following:
<TABLE>
<CAPTION>
                                                      DECEMBER 31,
                                              ----------------------------
                                                  1997            1996
                                              ----------------------------
<S>                                           <C>             <C>
Notes payable to banks under Revolver........ $163,765,015    $116,480,109
Installment loans on vehicles and equipment..   14,445,027      21,855,748
Mortgage notes payable on real estate........    6,235,998       6,619,524
Other notes payable..........................    2,249,873       3,228,250
Capital lease obligations....................      650,689               -
Senior subordinated notes....................  100,000,000               -
                                              ----------------------------
                                               287,346,602     148,183,631
Less current maturities......................    6,140,688       8,519,814
                                              ----------------------------
                                              $281,205,914    $139,663,817
                                              ============================
</TABLE>

        In May 1997, ABC issued $100,000,000 of 10 5/8% Senior Subordinated
Notes due 2007, for which it received net proceeds of approximately
$96,500,000 after deducting expenses and commissions.  Net proceeds of
$10,000,000 were distributed to the Company's sole stockholder, who
simultaneously repaid to the Company approximately $8,200,000 million of net
borrowings.  The remainder of the net proceeds combined with the repayments of
the net stockholder advances approximated $94,700,000 and was used to repay
indebtedness outstanding under the Revolver.

        ABC has a financing agreement with a group of banks (Revolver) which
expires on June 30, 2000, under which ABC may borrow, on a revolving credit
basis, up to a maximum of $200,000,000 based on a percentage of eligible
accounts receivable and eligible inventory. Interest on the Revolver at
December 31, 1997 was largely based on LIBOR (6.0%) plus 1.25%. The weighted
average interest rate on all borrowings outstanding under the Revolver at
December 31, 1997 was 7.4%.

        The agreement contains various covenants, including provisions that
place restrictions on ABC's ability to merge or sell its business, sell
assets, make investments other than in the ordinary course of business,
repurchase stock, or pay dividends. Additional provisions require ABC to
maintain specified tangible net worth and cash flow amounts and require that
ABC's current sole stockholder continue to own at least 51% of the Company's
stock. The agreement also includes a prepayment fee.

                                       25
<PAGE>

            AMERICAN BUILDERS & CONTRACTORS SUPPLY CO., INC.
        NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

        The mortgage notes payable relate to ABC's corporate offices, and are
due in monthly principal and interest installments of approximately $50,000
through April 2002, with a final maturity date of May 31, 2002. Interest on
the mortgage notes is computed at 8.75% through October 31, 1997, with
variable interest thereafter based on an average yield of one-year U.S.
Treasury securities plus 3.5%.

        The Company has various other installment loans, notes payable and
capital lease obligations with maturity dates ranging from 1998 through 2002,
and interest rates ranging from 7.76% to 10.0% on the installment loans and
other notes payable and 3.36% to 17.0% on the capital lease obligations.
Substantially all of the Company's assets are collateral for Company
indebtedness.


        Future maturities of long-term debt as of December 31, 1997, are as
follows:

<TABLE>
<CAPTION>
                                                       AMOUNT
                                                   ------------
<S>                                                <C>
                        Year Ending December 31,
                        1998...............        $  6,140,688
                        1999...............           5,877,674
                        2000...............         168,565,529
                        2001...............           1,563,416
                        2002...............           5,199,295
                        Thereafter.........         100,000,000
                                                   ------------
                                                   $287,346,602
                                                   ============
</TABLE>

4. PROPERTY AND EQUIPMENT

        Property and equipment is comprised of the following:

<TABLE>
<CAPTION>
                                        December 31,
                                ---------------------------
                                     1997           1996
                                ---------------------------
<S>                             <C>             <C>
Land........................... $  3,607,692    $ 1,915,519
Buildings and improvements.....   12,948,995     10,889,390
Warehouse equipment............    9,067,216      7,045,874
Vehicles.......................   60,305,121     39,914,661
Office furniture and equipment.   11,063,481      8,482,177
Leasehold improvements.........   12,849,138     10,696,340
                                ---------------------------
                                 109,841,643     78,943,961
Less accumulated depreciation..   38,227,263     28,999,671
                                ---------------------------
                                $ 71,614,380    $49,944,290
                                ===========================
</TABLE>

5. LEASE COMMITMENTS

        ABC conducts the majority of its operations in leased facilities under
operating leases expiring at various dates through 2007. Generally, the leases
provide that ABC pay all insurance, maintenance, and other costs and expenses
associated with use of the buildings. Some of the leases also require ABC to
pay real estate taxes.

        As of December 31, 1997, the real estate for 83 of the distribution
centers was owned by a related party. The total rent expense for these
related-party leases was $7,393,000, $6,249,000 and $4,629,000 and for the
years ended December 31, 1997, 1996 and 1995, respectively.

                                       26
<PAGE>

               AMERICAN BUILDERS & CONTRACTORS SUPPLY CO., INC.
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

        Rent expense under all leases totaled $16,998,000, $12,592,000,
and $9,838,000 for the years ended December 31, 1997, 1996 and 1995,
respectively. Future minimum rental payments required as of December 31,
1997, under leases with an original term of more than one year are as
follows:

<TABLE>
<CAPTION>
                                                      AMOUNT
                                                    -----------
                        <S>                         <C>
                        Year ending December 31,
                        1998....................... $18,604,248
                        1999.......................  14,669,664
                        2000.......................  12,333,371
                        2001.......................  10,745,404
                        2002.......................   9,166,448
                        Thereafter.................  29,381,718
                        Future minimum payments     -----------
                                required........... $94,900,853
</TABLE>

6. RELATED-PARTY TRANSACTIONS

        The Company is related to certain other affiliates by common
ownership and management. Transactions and balances with these entities
are as follows for the reporting periods:

<TABLE>
<CAPTION>
                                        DECEMBER 31,
                          --------------------------------------
                              1997         1996          1995
                          --------------------------------------
<S>                       <C>           <C>           <C>
Accounts receivable...... $   27,433    $  288,024    $  281,809
Security deposits........    413,767       374,044       374,044
Accounts payable.........      4,336        11,340         4,974
Sales....................    100,165        65,969       172,830
Purchases................     56,442       556,390        65,759
Rent expense--buildings..  7,393,379     6,248,942     4,629,109
</TABLE>

        The Company has the following receivables from, and payables to,
its sole stockholder:

<TABLE>
<CAPTION>
                           DECEMBER 31,
                   --------------------------
                       1997           1996
                   --------------------------
<S>                <C>             <C>
Receivables....... $7,328,218      $7,304,164
Payables..........          -      (2,154,979)
                   --------------------------
                   $7,328,218      $5,149,185
                   ==========================
</TABLE>

        Interest on the receivables and payables is charged/incurred at
a rate comparable to the interest rate ABC pays on its Revolver and was
as follows:
<TABLE>
<CAPTION>
                              YEAR ENDED DECEMBER 31,
                          1997         1996         1995
                        ----------------------------------
<S>                     <C>         <C>          <C>
Interest income........ $465,872    $ 627,751    $ 628,908
Interest expense.......  (20,121)    (239,397)    (207,823)
                        ----------------------------------
                        $445,751    $ 388,354    $ 421,085
                        ==================================
</TABLE>

        At December 31, 1997 and 1996, the Company had guaranteed debt
of the sole stockholder in the amounts of $2,029,000 and $3,616,000,
respectively. Certain assets owned by the Company are utilized as
collateral as part of an overall guaranty of this debt by the Company.
The Company also had outstanding letters of credit of $1,626,000 and
$300,000 at December 31, 1997 and 1996, respectively, with respect to
debt of the sole stockholder and his affiliates.

                                       27
<PAGE>

            AMERICAN BUILDERS & CONTRACTORS SUPPLY CO., INC.
        NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

        An insurance company, owned by the sole stockholder, provides
property and casualty insurance, including workers compensation
insurance, to the Company. The Company paid the insurance company for
reported and unreported claim liabilities, net of reimbursements, as
determined by an unrelated third- party claims adjusting service,
amounting to $5,860,605, $5,256,000 and $5,175,000 in 1997, 1996 and
1995, respectively.

7. LITIGATION

        The Company is involved in various legal matters arising in the
normal course of business. In the opinion of management and legal
counsel, the amount of losses that may be sustained, if any, would not
have a material effect on the financial position and results of operations
of the Company.

8. EMPLOYEE BENEFIT PLAN

        The Company sponsors a 401(k) plan covering substantially all
employees. The Company may make elective contributions. Discretionary
contributions of $924,000, $716,000 and $614,000 were made for 1997,
1996 and 1995, respectively.

9. FAIR VALUE OF FINANCIAL INSTRUMENTS

        The carrying value of the Company's financial instruments, which
consist of cash, accounts receivable, accounts payable and borrowings,
approximates their fair value at both December 31, 1997 and 1996.

        Substantially all of the Company's accounts receivable are due
from contractors located throughout the United States. Credit is
extended based on an evaluation of the customer's financial condition
and projects, where applicable. Credit losses are provided for in the
financial statements and have consistently been within management's
expectations.

10. SUMMARIZED FINANCIAL INFORMATION ABOUT GUARANTOR SUBSIDIARIES

        The following is summarized aggregated financial information for
Mule-Hide and Amcraft, both of which fully, unconditionally, jointly,
and severally guarantee the $100 million of Senior Subordinated Notes
issued by ABC.  The amounts are before consolidated level elimination
entries (i.e. sales to ABC and accounts receivable from ABC are
eliminated in consolidation but are separately shown below; all other
amounts are unaffected).  Separate financial statements of the
guarantors are not presented because, in the opinion of management, such
financial statements are not material to investors.

<TABLE>
<CAPTION>
                                                 DECEMBER 31,
                                               1997          1996
                                           -------------------------
        <S>                                <C>          <C>
        Current assets:
        Accounts receivable from ABC...... $ 2,355,004   $ 1,165,462
        Other current assets-third parties   3,950,487     4,088,947
                                           -------------------------
           Total..........................   6,305,491     5,254,409
        Noncurrent assets.................     707,312     1,340,694
        Current liabilities...............  (6,894,655)   (6,471,068)
        Noncurrent liabilities............           -      (653,148)
</TABLE>

            AMERICAN BUILDERS & CONTRACTORS SUPPLY CO., INC.
        NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

<TABLE>
<CAPTION>
                                  YEAR ENDED DECEMBER 31,
                            1997            1996           1995
                        -------------------------------------------
<S>                     <C>             <C>             <C>
Net sales:
  To ABC............... $38,172,755     $33,922,487     $27,034,490
  To third parties.....   5,869,444       5,532,971       4,853,632
                        -------------------------------------------
            Total......  44,042,199      39,455,458      31,888,122
Gross profit...........   7,572,577       6,784,164       5,483,012
Net income.............   1,593,119       1,577,620         772,841

</TABLE>

                                       28
<PAGE>

                              INDEX TO EXHIBITS

3.1   Certificate of Incorporation of the Company (Incorporated by reference
      to exhibit 3.1 to the Company's Registration Statement on Form S-4 (File
      No. 33-26991)).

3.2   By-laws of the Company (Incorporated by reference to exhibit 3.2 to the
      Company's Registration Statement on Form S-4 (File No. 33-26991)).

3.3   Articles of Incorporation of Mule-Hide (Incorporated by reference to
      exhibit 3.3 to the Company's Registration Statement on Form S-4 (File
      No. 33-26991)).

3.4   By-laws of Mule-Hide (Incorporated by reference to exhibit 3.4 to the
      Company's Registration Statement on Form S-4 (File No. 33-26991)).

3.5   Certificate of Incorporation of Amcraft (Incorporated by reference to
      exhibit 3.5 to the Company's Registration Statement on Form S-4 (File
      No. 33-26991)).

3.6   By-laws of Amcraft (Incorporated by reference to exhibit 3.6 to the
      Company's Registration Statement on Form S-4 (File No. 33-26991)).

10.1  Employment Agreement,dated as of May 1, 1997, between the Company and
      Kenneth A. Hendricks (Incorporated by reference to exhibit 10.3 to the
      Company's Registration Statement on Form S-4 (File No. 33-26991)).

10.2  Tax Allocation Agreement, dated as of May 1, 1997, among the Company,
      Mule-Hide and Amcraft and Kenneth A. Hendricks (Incorporated by
      reference to exhibit 10.4 to the Company's Registration Statement on
      Form S-4 (File No. 33-26991)).

10.3  Form of lease agreement between the Company and Hendricks Real Estate
      Properties and schedule of lease terms for all properties leased
      pursuant thereto (Incorporated by reference to exhibit 10.5 to the
      Company's Registration Statement on Form S-4 (File No. 33-26991)).

10.4  Amended and Restated Loan and Security Agreement among American National
      Bank and Trust Company of Chicago, NationsBank of Texas, N.A.,
      Bankamerica Business Credit, Inc. and the Company, as amended to date
      (the "Credit Agreement") (Incorporated by reference to exhibit 10.6 to
      the Company's Registration Statement on Form S-4 (File No. 33-26991)).

10.5  Amended and Restated Patent, Trademark and License Mortgage by the
      Company in favor of NationsBank of Texas, N.A., as agent for the lenders
      under the Credit Agreement, as amended (Incorporated by reference to
      exhibit 10.7 to the Company's Registration Statement on Form S-4 (File
      No. 33-26991)).

10.6  Amended and Restated Limited Guaranty Agreement between Kenneth A.
      Hendricks, dated as of February 8, 1996, in favor of NationsBank of
      Texas, N.A., individually or as agent for the lenders under the Credit
      Agreement (Incorporated by reference to exhibit 10.8 to the Company's
      Registration Statement on Form S-4 (File No. 33-26991)).

10.7  Continuing Guarantee Agreement, dated July 20, 1996, between Mule-Hide
      and Heritage for the benefit of Kenneth A. Hendricks (Incorporated by
      reference to exhibit 10.9 to the Company's Registration Statement on
      Form S-4 (File No. 33-26991)).

10.8  Guaranty dated December 22, 1992, between the Company and Transohio
      Savings Bank, for the benefit of Kenneth A. Hendricks (Incorporated by
      reference to exhibit 10.10 to the Company's Registration Statement on
      Form S-4 (File No. 33-26991)).

                                      29
<PAGE>

10.9  Guaranty dated December 22, 1996, between the Company and MetLife
      Capital Corporation for the benefit of Kenneth A. Hendricks
      (Incorporated by reference to exhibit 10.11 to the Company's
      Registration Statement on Form S-4 (File No. 33-26991)).

10.10 Employment Agreement, dated as of August 1, 1997, between the Company
      and Jeffrey Stentz.

10.11 Tenth Amendment to the Amended and Restated Loan and Security Agreement
      between NationsBank of Texas, N.A. and the Company, as amended to date
      (the "Credit Agreement")

10.12 Eleventh Amendment to the Amended and Restated Loan and Security
      Agreement between NationsBank of Texas, N.A. and the Company, as amended
      to date (the "Credit Aggrement)

21.1  Subsidiaries of the Company, Mule-Hide and Amcraft (Incorporated by
      reference to exhibit 21.1 to the Company's Registration Statement on
      Form S-4 (File No. 33-26991)).

27.1  Financial Data Schedule.

                                      30
<PAGE>

            AMERICAN BUILDERS & CONTRACTORS SUPPLY CO., INC.
             SCHEDULE II. VALUATION AND QUALIFYING ACCOUNTS

               Years ended December 31, 1997, 1996, 1995

<TABLE>
<CAPTION>
                                                               Additions
                                                               Charged to
                                     Balance at   Additions      Other
                                     beginning    charged to    Accounts     Deductions    Balance at
Description                           of year      expense         (2)           (1)       end of year
------------------------------------------------------------------------------------------------------
<S>                                 <C>           <C>          <C>           <C>           <C>
Accounts Receivable--Allowance for
doubtful accounts:
1997............................... $4,325,000    $4,464,000   $1,733,000    $4,573,000    $5,949,000
1996...............................  3,904,000     3,604,000            -     3,183,000     4,325,000
1995...............................  3,393,000     3,165,000            -     2,654,000     3,904,000
</TABLE>

(1) Consist of charge-offs, net of recoveries
(2) Allowance for doubtful accounts recorded in connection with acquisitions

                                      31
<PAGE>

  SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registration has duly caused this Report on Form 10-K to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Beloit, State of Wisconsin, on 3/30, 1998.
                         AMERICAN BUILDERS AND CONTRACTORS SUPPLY
                         CO. INC.
                            /s/ Kendra A. Story
                         By:___________________________________
                            Kendra A. Story
                            Chief Financial Officer, Treasurer

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