SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC. 20549

                                    FORM 10-Q

                   QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934


                                                                 Commission File
For the Quarterly Period Ended       June 28, 2003               Number  1-14967
                               ------------------------          ---------------



                                   WICKES INC.
                       -----------------------------------
             (Exact name of registrant as specified in its charter)


               Delaware                                               36-3554758
---------------------------------------                     --------------------
(State or other jurisdiction of                                 (I.R.S. Employer
incorporation or organization)                               Identification No.)


706 North Deerpath Drive, Vernon Hills, Illinois                           60061
------------------------------------------------                      ----------
(Address of principal executive offices)                              (Zip Code)



                                  847-367-3400
                                  ------------
              (Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed  by  Section  13 or 15 (d) of the  Securities  Exchange  Act of 1934
during  the  preceding  12  months,  and (2) has  been  subject  to such  filing
requirements for the past 90 days.           Yes_X_    No __

Indicate  by check mark  whether  the  registrant  is an  accelerated  filer (as
defined in Rule 12b-2 of the Exchange Act)   Yes ___ No _X_

As of July 31, 2003, the Registrant had 8,307,984 shares of Common Stock, par
value $.01 per share outstanding.


<PAGE>2

<TABLE>

                          WICKES INC. AND SUBSIDIARIES

                                      INDEX
                                      -----

                                                                                         Page
                                                                                         Number
                                                                                         ------
<S>                                                                                        <C>

PART I.              FINANCIAL INFORMATION

  Item 1.            Financial Statements

          Condensed  Consolidated  Balance  Sheets  (Unaudited)  June 28,  2003,
          December 28, 2002, and June 29, 2002                                              3

          Condensed  Consolidated  Statements of Operations  (Unaudited) for the
          three and six months ended June 28, 2003 and June 29, 2002                        4


          Condensed Consolidated  Statements of Cash Flows (Unaudited) - for the
          six months ended June 28, 2003 and June 29, 2002                                  5

          Notes to Condensed Consolidated Financial Statements (Unaudited)                  6

  Item 2.            Management's Discussion and Analysis of Financial
                     Condition and Results of Operations                                   19

  Item 3.            Quantitative and Qualitative Disclosures about
                     Market Risk                                                           34

  Item 4.            Controls and Procedures                                               34

PART II.             OTHER INFORMATION

  Item 1.            Legal Proceedings                                                     35

  Item 2.            Changes in Securities and Use of Proceeds                             35

  Item 6.            Exhibits and Reports on Form 8-K                                      35


</TABLE>


<PAGE>3


                          WICKES INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
               June 28, 2003, December 28, 2003 and June 29, 2002
                      (in thousands except per share data)
                                   (UNAUDITED)

<TABLE>




                                                                               June 28,   December 28,        June 29,
                                                                                 2003         2002              2002
                                                                           ------------    -----------    ------------
                                     ASSETS

<S>                                                                      <C>              <C>            <C>

Current assets:
    Cash                                                                   $         30    $        40    $        161
    Accounts receivable, less allowance for doubtful
       accounts of $1,854 in June 2003, $1,919 in December 2002
       and $1,403 in June 2002                                                   55,426         56,094          62,486
    Note receivable from affiliate                                                    -              -             425
    Inventory, net                                                               52,918         50,170          62,292
    Deferred tax assets                                                               -          5,720           8,457
    Prepaid expenses and other assets                                             7,361          5,619           5,934
    Assets of discontinued operations                                                 -              -          58,478
                                                                           ------------    -----------    ------------
        Total current assets                                                    115,735        117,643         198,233
                                                                           ------------    -----------    ------------

Property, plant and equipment, net                                               35,417         37,971          42,472
Trademark                                                                             -              -           5,856

Deferred tax assets                                                                   -         13,775          16,344
Rental equipment (net of accumulated depreciation of $1,465 in June
      2003, $1,475 in December 2002 and $1,587 in June 2002)                        774          1,021           1,250
Goodwill                                                                              -              -          12,229
Other assets (net of accumulated amortization of $6,446 in June
     2003, $5,911 in 2002, and $5,357 in June 2002)                               6,020          3,577           4,783
Assets of discontinued operations                                                     -              -          11,989
                                                                           ------------    -----------    ------------
        Total assets                                                       $    157,946    $   173,987    $    293,156
                                                                           ============    ===========    ============

                       LIABILITIES & STOCKHOLDERS' EQUITY
Current liabilities:
    Current maturities of long-term debt                                   $     22,998    $    28,107    $     10,096
    Accounts payable                                                             30,134         23,824          34,062
    Accrued liabilities                                                          12,392         16,256          12,174
    Liabilities of discontinued operations                                            -              -          23,766
                                                                           ------------    -----------    ------------
      Total current liabilities                                                  65,524         68,187          80,098
                                                                           ------------    -----------    ------------

Long-term debt, less current maturities                                          99,539         67,363         184,391
Other long-term liabilities                                                       2,310          2,407           2,587
Liabilities of discontinued operations                                                -              -             680

Stockholders' equity:
    Common stock, $0.01 par (8,307,984 at June 2003 and December 2002,
        and 8,288,845 shares at June 2002 issued and outstanding)                    83             83              83
    Additional paid-in capital                                                   87,173         87,173          87,155
    Accumulated deficit                                                         (96,683)       (51,226)        (61,838)
                                                                           ------------    -----------    ------------
     Total stockholders' (deficit) equity                                        (9,427)        36,030          25,400
                                                                           ------------    -----------    ------------
     Total liabilties and stockholders' (deficit) equity                   $    157,946    $   173,987    $    293,156
                                                                           ============    ===========    ============

</TABLE>

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



<PAGE>4


                          WICKES INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)
                 (in thousands except share and per share data)

<TABLE>


                                                                                    Three Months Ended     Six Months Ended
                                                                                   June 28,    June 29,   June 28,   June 29,
                                                                                     2003       2002       2003        2002
                                                                                   ---------   --------   --------   ---------
<S>                                                                             <C>         <C>        <C>        <C>

Net sales                                                                        $  127,605  $ 160,546  $ 228,654   $ 295,940
Cost of sales                                                                       101,962    126,268    182,436     234,057
                                                                                  ---------   --------   --------   ---------

    Gross profit                                                                     25,643     34,278     46,218      61,883
                                                                                  ---------   --------   --------   ---------

Selling, general and administrative expenses                                         30,005     30,765     58,365      58,947
Depreciation                                                                            969      1,064      1,934       2,283
Provision for doubtful accounts                                                         259        320        438         766
Store closing costs and other charges                                                 3,709        785      5,015       1,747
Other operating income                                                                 (117)    (1,784)    (1,284)     (2,212)
                                                                                  ---------   --------   --------   ---------
                                                                                     34,825     31,150     64,468      61,531
                                                                                  ---------   --------   --------   ---------
 (Loss) income from continuing operations before interest and taxes                  (9,182)     3,128    (18,250)        352

Interest expense                                                                      3,673      4,115      7,131       8,491
                                                                                  ---------   --------   --------   ---------
    Loss from continuing operations before income taxes                             (12,855)      (987)   (25,381)     (8,139)

Income tax expense (benefit)                                                         24,491       (225)    19,691      (2,909)
                                                                                  ---------   --------   --------   ---------
    Loss from continuing operations                                                 (37,346)      (762)   (45,072)     (5,230)

(Loss) income from discontinued operations, net of taxes of $2,004 and
   $2,419 for the three and six months ended in 2002                                   (385)     3,102       (385)      3,745
                                                                                  ---------   --------   --------   ---------

Net (loss) income                                                                $  (37,731) $   2,340  $ (45,457)  $  (1,485)
                                                                                  =========   ========    =======     =======

Loss from continuing operations per common share-basic and diluted               $    (4.50) $   (0.09) $  ( 5.43)  $   (0.63)
                                                                                  =========   ========    =======    ========

(Loss) income from discontinued operations per common share-basic and diluited   $    (0.04) $    0.37  $   (0.04)  $    0.45
                                                                                  =========   ========    =======    ========

Net (loss) income per common share-basic and diluted                             $    (4.54) $    0.28  $   (5.47)  $   (0.18)
                                                                                  =========   ========    =======    ========

Weighted average common shares-basic                                              8,307,984  8,288,761  8,307,984   8,286,837
                                                                                  =========  =========  =========   =========

Weighted average common shares-diluted                                            8,307,984  8,459,051  8,307,984   8,402,471
                                                                                  =========  =========  =========   =========

</TABLE>

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


<PAGE>5


                          WICKES INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
                                 (in thousands)

<TABLE>
                                                                                       Six Months Ended
                                                                                       ----------------
                                                                                 June 28,        June 29,
                                                                                   2003            2002
                                                                               ------------    ------------
<S>                                                                           <C>              <C>

Cash flows from operating activities:
    Net loss                                                                 $      (45,457)  $      (1,485)
    Adjustments to reconcile net loss to
       net cash (used in) provided by operating activities:
    Loss (income) from discontinued operations                                          385          (3,745)
    Depreciation                                                                      2,467           2,938
    Gain on early retirement of debt                                                   (879)              -
    Amortization of deferred financing costs                                          1,354             772
    Provision for doubtful accounts                                                     438             766
    Loss (gain) on sale of assets and other items                                       231          (1,261)
    Deferred income taxes                                                            19,347            (641)
    Changes in assets and liabilities, net of assets sold
       Increase in accounts receivable                                               (8,599)         (1,866)
       (Increase) decrease in inventory                                              (2,885)          9,423
       Increase (decrease) in accounts payable and accrued liabilities                2,349          (1,400)
       Increase in prepaids and other assets                                         (1,833)         (1,439)
                                                                               ------------    ------------
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES                                 (33,082)          2,062
                                                                               ------------    ------------

Cash flows from investing activities:
  Purchases of property, plant and equipment                                         (2,033)           (488)
  Proceeds from the sale of property, plant and equipment                             1,983           3,909
  Proceeds from sale of business                                                      8,829               -
                                                                               ------------    ------------
NET CASH PROVIDED BY INVESTING ACTIVITIES                                             8,779           3,421
                                                                               ------------    ------------
Cash flows from financing activities:
    Net borrowings (repayments) under revolving line of credit                       33,301          (5,574)
    Retirements of long-term debt                                                    (4,980)              -
    Term loan repayments                                                               (375)         (2,349)
    Debt issuance costs                                                              (3,653)              -
                                                                               ------------    ------------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES                                  24,293          (7,923)
                                                                               ------------    ------------
NET CASH PROVIDED BY DISCONTINUED OPERATIONS                                              -           2,448
                                                                               ------------    ------------
NET DECREASE IN CASH                                                                    (10)         (2,440)
Cash at beginning of period                                                              40             153
                                                                               ------------    ------------
CASH AT END OF PERIOD                                                        $           30   $         161
                                                                               ============    ============
Supplemental schedule of cash flow information:
     Interest paid                                                           $        5,262   $       8,341
     Income taxes paid                                                       $          670   $         469

</TABLE>

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




<PAGE>6


                          WICKES INC. AND SUBSIDIARIES
                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                                   (UNAUDITED)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
   ------------------------------------------

   Basis of Financial Statement Presentation

     The  condensed  consolidated  financial  statements  present the results of
operations,   financial  position,  and  cash  flows  of  Wickes  Inc.  and  its
consolidated subsidiaries (the "Company").  The condensed consolidated financial
statements  are prepared in  accordance  with  accounting  principles  generally
accepted  in the United  States of America,  which  require  management  to make
estimates  and  assumptions  that  affect  the  reported  amounts  of assets and
liabilities  and disclosure of contingent  assets and liabilities at the date of
the  financial  statements  and the  reported  amounts of revenues  and expenses
during the reporting period. Actual results could differ from those estimates.

     The  condensed   consolidated   financial  statements  should  be  read  in
conjunction  with the  Company's  consolidated  financial  statements  and notes
thereto  included in the Company's  Annual Report on Form 10-K (the "Form 10-K")
for the  fiscal  year  ended  December  28,  2002.  The  condensed  consolidated
financial  statements  reflect  all  adjustments   (consisting  only  of  normal
recurring  adjustments)  which are, in the opinion of management,  necessary for
the fair  presentation  of the  financial  results for the interim  period.  The
results of  operations  for interim  periods are not  necessarily  indicative of
results for the entire year.

     The Company has determined that it operates in one business  segment,  that
being the supply and distribution of lumber, building materials and manufactured
components to building professionals and do-it-yourself  customers,  principally
in the Midwest,  Northeast, and Southern United States. All information required
by Statement of Financial Accounting Standards ("SFAS") 131,  "Disclosures about
Segments of an Enterprise and Related Information", is included in the Company's
consolidated financial statements.

     The  Company's  consolidated  financial  statements  have been  prepared
assuming  that the Company  will  continue  as a going  concern.  Management  is
instituting and executing a series of plans and actions  designed to improve the
Company's  operating  results  and cash flows and to  strengthen  the  Company's
financial  position.  These plans include cost  reductions  resulting from store
closures and  headcount  reductions  at  headquarters,  targeted  reductions  in
operating  expenses and optimization of the Company's real estate portfolio.  In
addition, the Company may seek to secure the necessary funds through the sale of
additional equity,  through borrowings,  or through an exchange or restructuring
of the Company's existing debt obligations.

<PAGE>7


     Management  believes that implementation of its plans to improve operations
     and cash flows,  coupled with the  amendments  of the  financial  covenants
     contained in the Credit  Agreement and the securing of additional  funds or
     exchange or restructuring of its existing debt obligations,  will allow the
     Company  to  comply  with  its  required  financial  covenants,   meet  its
     obligations as they come due and provide adequate  liquidity to operate the
     business for the next twelve months.  However, there can be no assurance in
     this  regard.  Furthermore,  there can be no assurance  that the  Company's
     lenders will waive any future  violations of the Credit  Agreement that may
     occur or agree to future  amendments  of the Credit  Agreement  or that the
     Company can obtain  additional  funding from beyond that noted above or any
     other external source.


     Under certain scenarios,  the Company may not generate sufficient cash from
     operations to pay the  principal  amount of the Senior  Subordinated  Notes
     when due and , therefore, the Company may seek to secure such funds through
     the sale of additional equity,  through borrowings,  or through an exchange
     or  restructuring  of the  Company's  existing debt  obligations,  as noted
     above.  There is no assurance  that the Company will be able to obtain such
     funds or whether  such funds can be  obtained  on terms  acceptable  to the
     Company, or whether an exchange or restructuring is feasible,  which raises
     doubt about the Company's  ability to continue as a going  concern.  Except
     for a valuation allowance against the Company's deferred tax assets,  these
     financial  statements  do  not  include  any  adjustments  relating  to the
     recoverability  and  classification of asset carrying amounts or the amount
     and  classification  of liabilities that could result should the Company be
     unable to continue as a going concern.


     In  addition,  the  Company  was  not in  compliance  with  certain  of its
     financial  and  informational  covenants  contained  in the Merrill  Credit
     Agreement dated February 26, 2003 (the "Credit  Agreement")  which provides
     for a term loan facility and revolving  credit  agreement  (See  additional
     discussion in Note 3 to the condensed  consolidated  financial statements).
     The  Company  has  obtained  limited  waivers of  non-compliance  with such
     financial and informational  covenants from the requisite lenders under the
     Credit  Agreement.  The  amendments  to the Credit  Agreement  waived  such
     defaults and among other things,  revised and set as applicable,  financial
     covenant targets for fiscal years 2003 - 2006.



   Stock Based Compensation
   ------------------------

     The Company accounts for stock-based compensation under the intrinsic value
method,  as  prescribed  by  Accounting  Principles  Board (APB)  Opinion No. 25
"Accounting  for  Stock  Issued  to  Employees".  As  required  by SFAS No.  148
"Accounting  for  Stock-Based  Compensation  -  Transition  and  Disclosure,  an
amendment  of SFAS No. 123" the Company has  included  the  following  pro-forma
financial information demonstrating the difference in the Company's results, had
the fair-value based method been applied:

<PAGE>8
<TABLE>


                                                      Three Months Ended           Six Months Ended
                                                    June 28,      June 29,      June 28,      June 29,
                                                      2003          2002          2003          2002
                                                   -----------   -----------    ----------    ----------

<S>                                               <C>            <C>            <C>           <C>

Loss from continuing operations (as reprted)           (37,346)         (762)      (45,072)       (5,230)

Add: Stock based compensation cost included
  in determination of compensation expense                                10                          21
Deduct: Stock based compensation under the
  fair-value method for all awards, net of tax             (21)          (33)          (42)          (65)
                                                   -----------   -----------    ----------    ----------
Adjusted loss from continuing operations               (37,367)         (785)      (45,114)       (5,274)

(Loss) income from discontinued operations                (385)        3,102          (385)        3,745

Net (loss)  income (as reported)                       (37,731)        2,340       (45,457)       (1,485)
Adjusted net (loss) income                             (37,752)        2,317       (45,499)       (1,530)

Earnings per share:
Basic:
Loss from continuing operations (as reported)            (4.50)        (0.09)        (5.43)        (0.63)
Adjusted loss from continuing operations                 (4.50)        (0.09)        (5.43)        (0.64)

Income (loss) from discontinued operations               (0.04)         0.37         (0.04)         0.45

Net income (loss)  (as reported)                         (4.54)         0.28         (5.47)         0.18
Adjusted net income (loss)                               (4.54)         0.28         (5.48)         0.18

Diluted:
Loss from continuing operations (as reported)            (4.50)        (0.09)        (5.43)        (0.63)
Adjusted loss from continuing operations                 (4.50)        (0.09)        (5.43)        (0.64)

(Loss) income from discontinued operations               (0.04)         0.37         (0.04)         0.45

Net income (loss) (as reported)                          (4.54)         0.28         (5.47)         0.18
Adjusted net income (loss)                               (4.54)         0.27         (5.48)         0.18

</TABLE>

   Share Data
   ----------

     The Company  issued 7,260 shares of Common Stock to members of its board of
directors  in lieu of cash  compensation  during the six  months  ended June 29,
2002.  The Company did not issue  shares of Common Stock to members of its board
of directors in lieu of cash  compensation  during the six months ended June 28,
2003.

<PAGE>9

   Stock Options
   -------------

     The  Company   periodically   grants  stock   options  to  key   personnel.
Compensation cost on these options is measured at the date of grant by comparing
the quoted market price of the Company's  stock to the price the employee has to
pay to acquire the stock.  Any resulting  compensation  cost would be recognized
over the employee's vesting period.


   Reclassifications and Eliminations
   ----------------------------------

     Certain  reclassifications  have been made to prior year amounts to conform
to the current presentation. All material intercompany balances and transactions
have been eliminated.


2. Discontinued Operations
   -----------------------

     On December  16, 2002 the Company sold  substantially  all of the assets of
its  operations in Wisconsin and Northern  Michigan to Lanoga  Corporation  (the
"Lanoga  Sale")  for a sales  price of $104.7  million.  These  operations  were
considered  discontinued  operations  under  SFAS No.  144  "Accounting  for the
Impairment or Disposal of Long-lived Assets".

     In the first six months of 2003, the Company received  additional  proceeds
of $8.8  million  related  to the  settlement  of  amounts  held in escrow as of
December 28, 2002. The remaining  escrow amounts of $1.8 million are expected to
be settled by June 2004.

     The Company is subject to indemnification  claims for certain environmental
issues related to the properties sold to Lanoga. The Company's exposure in these
claims  ranges from $0.3 to $0.4 million.  As of June 28, 2003,  the Company has
recorded  $0.3 million as part of  discontinued  operations  in the Statement of
Operations.  It is the Company's  position that the amount of exposure should be
at the low end of the range and it will vigorously pursue this position.

     Sales and income from discontinued  operations for the three and six months
ended June 29, 2002 were as follows:
<TABLE>


                                             Three months ended    Six months ended
                                                  June 29,            June 29,
                                                    2002                2002
                                                  --------            --------
<S>                                             <C>                  <C>


        Sales                                    $  74,064           $ 124,494
        Income before income taxes                   5,106               6,164
        Tax provision                                2,004               2,419
        Income from discontinued operations          3,102               3,745

</TABLE>

<PAGE>10

     The major classes of assets and liabilities of discontinued operations sold
were as follows (in thousands):
<TABLE>


                                                  June 29,
                                                    2002
                                                   -----
<S>                                              <C>

        Cash                                  $       11

        Accounts receivable                       26,451
        Inventory                                 31,858
        Deferred tax assets                         (227)
        Prepaid expenses and other assets            385
                                                  ------
          Total current assets                    58,478
                                                  ------
        Property, plant and equipment             11,331
        Deferred tax assets                          215
        Rental equipment                             445
        Other assets                                  (2)
                                                  ------
          Total assets                            70,467
                                                  ------

        Accounts payable                          19,870
        Accrued liabilities                        3,896
                                                 -------
          Total current liabilities               23,766
        Other long-term liabilities                  680
                                                  ------
          Total liabilities                       24,446
                                                  ------
          Net assets                          $   46,021
                                                  ======

</TABLE>

<TABLE>


3. LONG-TERM DEBT
   --------------

     Long-term debt is comprised of the following (in thousands):

                                                  June 28,           June 29,
                                                    2003               2002
                                                    -----              -----
<S>                                               <C>                 <C>

        Revolving credit facility:
           Revolving notes                      $  39,815        $    94,324
           Term notes                              24,625             36,207
        Senior subordinated notes                  21,123             63,956
        Senior secured notes                       36,974                  -
        Less current maturities                   (22,998)           (10,096)
                                                   ------             ------
        Total long-term debt                    $  99,539        $   184,391
                                                   ------             ------
</TABLE>
<PAGE>11

   Senior Subordinated Debt
   ------------------------

     On  February  26,  2003,  the  Company  completed  its  offer  to  exchange
("Exchange  Offer')  its  Senior  Secured  Notes due 2005 for any and all of its
outstanding 11 5/8% Senior Subordinated Notes due 2003. The Company accepted for
the exchange all $42.8 million of Senior  Subordinated Notes validly tendered in
exchange for an equal  principal  amount of Senior Secured  Notes.  The tendered
notes represented approximately 67% of the Senior Subordinated Notes outstanding
as of February 26, 2003.  The Senior  Secured  Notes,  which bear interest at 11
5/8% per annum from the date of issuance  through  December  15, 2003 and at 18%
per annum thereafter,  are secured by subordinated  liens on the Company's owned
real estate and equipment.  These liens are junior to the liens securing amounts
payable  under the  Company's  senior credit  facility  (see  "Revolving  Credit
Facility" below).

     Concurrent with the closing of the exchange offer, the indenture  governing
the outstanding  Senior  Subordinated Notes was amended to remove or modify many
of the restrictive covenants.  Those restrictions included (but were not limited
to) certain  limitations on transactions  with  affiliates,  dividend  payments,
changes in control,  and sales of assets. In addition,  the Senior Secured Notes
permit the Company to call the senior secured notes, at its option, at declining
discounts starting at 15% on December 15, 2003.

     In March 2003,  the  Company  redeemed  outstanding  Senior  Secured  Notes
aggregating $5.9 million face value for $5.0 million. The resulting gain of $0.9
million was recorded in other  operating  income on the  Company's  Statement of
Operations.

     The Company  continues to carry Senior  Subordinated  Notes due in December
2003  of  approximately  $21.1  million.  Sufficient  liquidity  to  meet  these
obligations  and the interest  obligations on the Senior Secured Notes when they
come due is contingent  on a number of risk  factors,  as discussed in Item 1 of
the  Company's  2002  Form10-K.  The Company  does not believe it will  generate
sufficient  cash from  operations  to pay the  principal  amount  of the  Senior
Subordinated  Notes when due. The Company may seek to secure the necessary funds
through the sale of additional  equity,  through borrowings or both. There is no
assurance  that the Company  will be able to obtain  such funds or whether  such
funds can be obtained on terms acceptable to the Company. If the Company secures
additional  funds  through the issuance of  additional  equity  securities,  the
Company's existing stockholders will likely experience dilution of their present
equity ownership  position and voting rights.  Depending on the number of shares
and the terms and conditions of the issuance,  any new equity  securities  could
have rights,  preferences, or privileges senior to those of the Company's common
stock. If the Company secured funds through additional borrowings, the terms and
conditions  of such  borrowings  could be more  onerous to the Company  than the
terms and  conditions of the Company's  existing  senior  subordinated  notes or
other existing borrowings.  The Company also believes that even if the principal
amount  of the  Senior  Subordinated  Notes  are paid it will  need to  increase
revenues  to  generate  sufficient  cash to pay the  increase in interest in its
Senior  Secured  Notes to 18%,  effective  December 15, 2003.  In addition,  the
Company has retained an investment bank, Brown Gibbons Lang & Company, to assist
in finalizing  the  Company's  plans to improve its capital  structure  with the
objective of providing longer term sustainability.

<PAGE>12


   Revolving Credit Facility
   -------------------------

     Concurrent  with the Exchange  Offer,  on February  26,  2003,  the Company
completed a refinancing of its Fleet Credit Agreement and term notes and entered
into the new  Credit  Agreement  dated  February  26,  2003 with  Merrill  Lynch
("Merrill Credit Agreement"). The total commitment was reduced from the original
$251.7 million ($200 million  revolving line of credit and $51.7 million of term
notes) to $125 million ($100 million revolving line of credit and $25 million of
term notes).  The Merrill Credit Agreement expires on February 26, 2007, and the
term notes are now due February 26, 2007,  with quarterly  repayments  beginning
May 31, 2003.

     On March 28, 2003, the Company requested the lenders to extend the due date
for delivery of certain Deposit Account  Control  Agreements,  as defined by the
Merrill Credit Agreement with certain local bank deposit accounts  maintained by
the Company.  The lenders agreed to amend (First Amendment) the Credit Agreement
to extend delivery of these agreements until May 31, 2003.

     As a result of (i) the  Company's  failure to deliver  to the  lenders  its
fiscal 2002 audited financial  statements by March 30, 2003 and (ii) as of April
4, 2003,  Riverside  Group Inc. and J. Steven Wilson ceasing between them to own
at least 25% of the Company's  outstanding common stock and Imagine Investments,
Inc.  owning a greater  percentage of such shares than Riverside and Mr. Wilson,
certain  events of  default  arose  under the  Merrill  Credit  Agreement.  Such
defaults were simultaneously  waived by the lenders and the Credit Agreement was
amended  (Second  Amendment)  in certain  respects,  including the addition of a
provision which permitted the Company to make a severance  payment to Mr. Wilson
and placed a limitation on the Company's ability to repurchase, redeem or retire
Senior  Subordinated  Notes. In connection with such waiver and amendments,  the
Company paid to the lenders a fee of $312,500.

     On May 31, 2003 the  Merrill  Credit  Agreement  was again  amended  (Third
Amendment)  whereby  the  lenders  agreed to (i) to reduce  the  revolving  loan
commitment  by $15.0 million and (ii) extend the due date to August 31, 2003 for
the  delivery of Deposit  Account  Control  Agreements  with  respect to certain
deposit  accounts  maintained by the Company.  The Company  received a refund of
$112,500 of the original closing fees pursuant to this amendment.

     As of June 28, 2003, the Company was in compliance  with its bank covenants
with the exception of its minimum  EBITDA  requirement.  On August 15, 2003, the
lenders agreed to waive the default of its minimum EBITDA  requirement and amend
the levels of EBITDA as defined within the Credit Agreement (Fourth  Amendment).
In addition, it amended the original credit agreement to include a prepayment of
term loan of $1.5 million by September 20, 2003,  less any  prepayment  from the
proceeds of the sale of certain real estate.  Further,  the  agreement  requires
that the Company maintain minimum  availability of $15 million for the remainder
of  the  agreement  and a 25  basis  point  increase  in  interest  spreads.  In
connection  with such waiver and  amendments,  the Company paid to the lenders a
fee of $100,000.

<PAGE>13

     As of June 28, 2003 there was $64.4 million  outstanding  under the Merrill
Credit  Agreement of which $39.8 million was revolving  credit and $24.6 million
was term notes. The spread on prime rate borrowings under the Merrill  agreement
ranges  from 1.25% to 2.00% over  prime for  revolving  loans and 2.00% to 2.75%
over prime under the term notes.  The spread for LIBOR  based  borrowing  ranges
from 2.50% to 3.25% over LIBOR for revolving loans and 3.25% to 4.00% over LIBOR
for term notes.  The spread over the prime or LIBOR  rates is  determined  based
upon the Company's  Fixed Charge  Coverage  Ratio,  as defined under the Merrill
Credit  Agreement.  However,  an event of  default  could  increase  each of the
Company's prime and LIBOR margins by 25 basis points. The Company's base rate on
revolving loans, 6.00% at June 28, 2003 and 5.50% at June 29, 2002,  included an
interest spread over prime of 1.75% and 0.75%, respectively. The Company's LIBOR
borrowing rate on revolving loans,  4.12% at June 28, 2003 and 4.58% at June 29,
2002,  included an interest spread over LIBOR of 3.00% and 2.75%,  respectively.
The Company's  weighted  average interest rates on revolver loans were 7.23% and
6.45% for the six months  ended June 28, 2003 and June 29,  2002,  respectively.

     The Merrill Credit Agreement  limits the level of capital  expenditures for
each annual period,  while allowing for reinvestment of proceeds on asset sales.
The  Company is also  subject to certain  minimum  levels of EBITDA,  as defined
within  the  Credit  Agreement.  Availability  is  generally  limited  to 85% of
eligible accounts receivable and 60% of eligible inventory.  As of June 28, 2003
unused  availability  was $27.7  million  and,  under the Merrill  Agreement  as
amended, minimum availability is required to be $15 million for the remainder of
the agreement.  Therefore, the Company held $12.7 million of excess availability
as of June 28, 2003 after all reserves and minimums were deducted.

     Under the Merrill  Credit  Agreement,  a commitment  fee of .375% to .5% is
payable on the unused  revolving  credit  amount.  Ranges of fees are determined
based upon the aforementioned  Fixed Charge Coverage Ratio, as defined under the
Credit Agreement.

<PAGE>14


   Aggregate Maturities
   --------------------

     The Senior Subordinated Notes totaling $21.1 million mature on December 15,
2003.  The Senior  Secured Note totaling  $37.0 million mature on July 29, 2005.
The term portion of the revolving credit facility requires  quarterly  principal
payments  totaling  approximately  $0.8 million in fiscal 2003,  $2.6 million in
fiscal 2003,  $3.4 million in fiscal 2005, $3.5 million in fiscal 2006 and $14.4
in fiscal 2007.




4. INCOME TAXES
   ------------

     The  Company  recorded a $29.6  million  charge to  establish  a  valuation
allowance for its net deferred tax assets  including  net  operating  loss carry
forwards  during the second  quarter of 2003.  These  conclusions  were  reached
largely due to the uncertainty  around the Company's  ability to utilize certain
operating loss carry forwards  based on the Company's  operating  results in the
most recent  three-year period and doubt about the Company's ability to continue
as a going concern,  which represented negative evidence sufficient to require a
full valuation allowance under the provisions of SFAS 109 "Accounting for Income
Taxes".

     The Company will be required to maintain a full valuation allowance for its
net deferred tax assets and net operating loss carry  forwards until  sufficient
positive  evidence exists to support  reversal of the remaining  reserve.  Until
such  time,  except for state and local  provisions,  the  Company  will have no
reported tax provision, net of valuation allowance adjustments.

     The income tax  expense  from  continuing  operations  for the  three-month
period  ended  June 28,  2003 was $24.5  million,  which is  comprised  of $29.6
million disclosed above offset by the impact of a $5.1 million benefit generated
during the second quarter, which was fully provided for. Income tax expense from
continuing  operations  for the three month  period ended June 29, 2002 was $0.2
million.  The Company's  effective tax rate from  continuing  operations for the
three-month  period ended June 29, 2002 was 22.8% which includes franchise taxes
and non-deductible items of $0.1 million.

     Income tax expense from  continuing  operations  for the  six-month  period
ended June 28, 2003 was $19.7  million,  which is comprised of the $29.6 million
charge  and a benefit  of $9.9  million.  Income  tax  expense  from  continuing
operations  was $2.9  million  for the same  period  in the  prior  year,  which
included franchise taxes and non-deductible items of $0.1 million. The Company's
effective tax rate from  continuing  operations  for the six-month  period ended
June 29, 2002 was 35.7%.

     On July  22,  2003,  as a  result  of  Bradco  Supply  and  its  affiliates
increasing  their common stock holdings in the Company above 15% of total shares
outstanding,  an ownership  change occurred as per Internal Revenue Code Section
382. A change in control, for tax purposes, could limit the Company's ability to
utilize its net operating loss carry-forwards.

<PAGE>15


5. COMMITMENTS AND CONTINGENCIES
   -----------------------------

     At June 28,  2003,  the  Company  had accrued  approximately  $425,000  for
remediation of certain environmental and product liability matters.

     Many of the  sales  and  distribution  facilities  presently  and  formerly
operated  by the Company at one time  contained  underground  petroleum  storage
tanks.  All such tanks known to the Company and located on  facilities  owned or
operated  by the  Company  have  been  filled  or  removed  in  accordance  with
applicable environmental laws in effect at the time. As a result of reviews made
in connection with the sale or possible sale of certain facilities,  the Company
has found petroleum  contamination  of soil and ground water on several of these
sites and has taken, and expects to take, remedial actions with respect thereto.
In addition,  it is possible that similar  contamination may exist on properties
no longer owned or operated by the Company, the remediation of which the Company
could, under certain circumstances, be held responsible. Since 1988, the Company
has  incurred  approximately  $2.3  million  of  costs,  net  of  insurance  and
regulatory  recoveries,  with respect to the filling or removing of  underground
storage  tanks and related  investigatory  and remedial  actions.  Insignificant
amounts of contamination have been found on excess properties sold over the past
six years.

     The Company is one of many  defendants  in two class  action suits filed in
August of 1996 by  approximately  200  claimants  for  unspecified  damages as a
result of health  problems  claimed to have been caused by  inhalation of silica
dust, a byproduct of concrete  and mortar mix,  allegedly  generated by a cement
plant with which the Company  has no  connection  other than as a customer.  The
Company has entered into a  cost-sharing  agreement  with its insurers,  and any
liability is not expected to be material.

     The Company is one of many defendants in approximately 670 actions, each of
which seeks  unspecified  damages,  primarily in Michigan  state courts  against
manufacturers and building  material  retailers by individuals who claim to have
suffered injuries from products containing asbestos. The Company is aggressively
defending  these  actions and does not believe  that these  actions  will have a
material adverse effect on the Company.  Since 1993, the Company has settled 522
similar actions for insignificant amounts, and another 362 of these actions have
been dismissed. None of these suits have made it to trial.

<PAGE>16


     Losses in excess of the $425,000 reserved as of June 28, 2003 are possible,
but a reasonable estimate of these amounts cannot be made.

     The  Company  is  involved  in various  other  legal  proceedings  that are
incidental to the conduct of its business.  Certain of these proceedings involve
potential damages for which the Company's insurance coverage may be unavailable.
While the Company  does not believe  that any of these  proceedings  will have a
material adverse effect on the Company's financial  position,  annual results of
operations or liquidity, there can be no such assurance of this result.


6. EARNINGS PER SHARE
   ------------------

     The Company  calculates  earnings per share in accordance with SFAS 128. In
periods where net losses are incurred, dilutive common stock equivalents are not
used in the  calculation  of diluted  EPS as they  would  have an  anti-dilutive
effect on EPS. For the three and six month periods  ended June 29, 2002,  common
stock  equivalents of approximately  116,000 shares were included in calculating
diluted weighted average shares  outstanding.  Common stock  equivalents for the
same  periods  of 1,282  were  excluded  from  earnings  per  share as they were
anti-dilutive.  In addition,  options to purchase  255,532 and 440,000 shares of
common stock at June 28, 2003 and June 29, 2002,  respectively,  had an exercise
price greater than the average market price.


7. RELATED PARTY TRANSACTIONS
   --------------------------

     At March 29, 2003, approximately 34% of the Company's outstanding shares of
common stock were owned by Riverside Group, Inc. and approximately 13% was owned
by Imagine Investments, Inc. and its parent, Stone Investments, Inc. On April 4,
2003, Imagine Investments,  Inc. acquired 2,797,743 common shares of Wickes Inc.
previously  owned  by  Riverside  Group,  Inc.  and an  option  to  purchase  an
additional 53,700 shares.  As of this date,  Imagine  Investments,  Inc. and its
affiliates  beneficially owned approximately 47.3% of the Company's  outstanding
common stock.

     At June 29,  2002,  the Company held a  promissory  note from  Riverside of
$425,000 including accrued interest. As of December 28, 2002 the Company had not
received payment for the principal and accrued interest,  and therefore provided
a reserve for the outstanding balance.

     For the six months  ended June 28,  2003,  the Company  paid  approximately
$420,000,  compared to approximately  $547,000 for the six months ended June 29,
2002, in  reimbursements  to affiliates of the Company's  former Chairman of the
Board and President  primarily for use of a corporate aircraft as well as office
space and office support services.

<PAGE>17


8. STORE CLOSINGS
   --------------

     Pursuant  to  certain   initiatives  to  improve   performance  and  reduce
under-performing  assets, the Company has closed or consolidated seven locations
during the first six months of 2003. The Company incurred costs of approximately
$3.2 million  related to severance  benefits  paid to senior  executives  and an
additional 66 headquarters and 86 field  personnel.  In addition the Company has
incurred  $1.8  million in  property  and other  carrying  costs that  primarily
include insurance,  maintenance / repair and lease commitments. During the first
six  months of 2002 the  Company  sold  seven  locations  and  consolidated  one
location.  Employee  severance  costs for 74  employees  and  property and other
carrying  costs  incurred  during the first six months of 2002 were $1.0 million
and $0.7 million respectively. The following is a summary of the activity in the
reserve  balances from December 29, 2001 through June 29, 2002 and from December
28, 2002 through June 28, 2003 (in thousands):

<TABLE>


                                                     Employee      Property and
                                                    Separation    Other Carrying
                                                      Costs           Costs         Total
                                                      ------          ------       ------

<S>                                                     <C>              <C>          <C>

       Accrual balance at December 28, 2002          $   385         $    15      $   400
       1st Qtr Store closing and other costs             610             701        1,311
       1st Qtr Related payments                         (848)           (671)      (1,519)
                                                      ------          ------        -----
       Accrual balance at March 29, 2003             $   147         $    45      $   192
       2nd Qtr Store closing and other costs           2,550           1,066        3,616
       2nd Qtr Related payments                       (2,353)         (1,039)      (3,392)
                                                      ------          ------       ------
       Accrual balance at June 28, 2003              $   344         $    72      $   416

       Accrual balance at December 29, 2001              139             286          425
       1st Qtr Store closing and other costs             763             199          962
       1st Qtr Related payments                         (827)           (363)      (1,190)
                                                      ------          ------       ------
       Accrual balance at March 30, 2002             $    75         $   122      $   197
       2nd Qtr Store closing and other costs             252             533          785
       2nd Qtr Related payments                         (327)           (583)        (910)
                                                      ------          ------       ------
       Accrual balance at June 29, 2002              $     0         $    72      $    72
</TABLE>


     The costs  incurred to liquidate the inventory has been included in cost of
sales on the  Company's  financial  statements.  The costs of reserving  for bad
debt, write-offs and subsequent collections,  has been included in provision for
doubtful accounts. All other costs are included in store closing costs.

<PAGE>18


9. SUBSEQUENT EVENTS
   -----------------

     On July  22,  2003,  as a  result  of  Bradco  Supply  and  its  affiliates
increasing  their common stock holdings in the Company above 15% of total shares
outstanding,  an ownership  change occurred as per Internal Revenue Code Section
382. A change in control,  for tax purposes,  may limit the Company's ability to
utilize its net operating loss carry-forwards.  The Company is in the process of
determining the impact of this event, if any, to the financial statements.

     As of June 28, 2003, the Company was in compliance  with its bank covenants
with the exception of its minimum  EBITDA  requirement.  On August 15, 2003, the
lenders agreed to waive the default of its minimum EBITDA  requirement and amend
the levels of EBITDA as defined within the Credit Agreement. In addition, it (1)
amended the original  credit  agreement to include a prepayment  of term loan of
$1.5 million by September 20, 2003, less any prepayment from the proceeds of the
sale of certain real estate  and(2)increased  the interest rate on the Company's
revolving  loans  by 25  basis  points.  In  connection  with  such  waiver  and
amendments, the Company paid to the lenders a fee of $100,000.

<PAGE>19



                          WICKES INC. AND SUBSIDIARIES

Item 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

     The following  discussion  should be read in conjunction with the Condensed
Consolidated  Financial  Statements and Notes thereto contained elsewhere herein
and in conjunction with the Annual Consolidated  Financial  Statements and Notes
thereto and  Management's  Discussion  and Analysis of Financial  Condition  and
Results of Operations  contained in the Company's Annual Report on Form 10-K for
the fiscal year ended December 28, 2002.

     This Discussion and Analysis contains  statements which, to the extent that
they  are  not  recitations  of  historical  fact,  constitute  Forward  Looking
Statements  that are made pursuant to the safe harbor  provisions of the Private
Securities  Litigation  Reform  Act  of  1995  and  are  inherently  subject  to
uncertainty.  A number of important  factors could cause the Company's  business
and financial  results and financial  condition to be materially  different from
those stated in the Forward Looking Statements.

     Among the factors that could cause actual results to differ  materially are
the following:  effects of seasonality and cyclicality;  effects of competition;
interest rates and the Company's ability to service and comply with the terms of
its debt; lumber prices;  the success of the Company's  operational  initiatives
and the outcome of the contingencies discussed in Note 5.

     Under certain scenarios,  the Company may not generate sufficient cash from
operations to pay the principal amount of the Senior Subordinated Notes when due
and,  therefore,  the Company may seek to secure such funds  through the sale of
additional equity,  through borrowings,  or through an exchange or restructuring
of the  Company's  existing  debt  obligations,  as  noted  above.  There  is no
assurance  that the Company  will be able to obtain  such funds or whether  such
funds can be obtained on terms acceptable to the Company, or whether an exchange
or restructuring is feasible,  which raises doubt about the Company's ability to
continue  as a going  concern.  Except for a  valuation  allowance  against  the
Company's  deferred tax assets,  these  financial  statements do not include any
adjustments  relating to the recoverability and classification of asset carrying
amounts or the amount and classification of liabilities that could result should
the Company be unable to continue as a going concern.

                                  INTRODUCTION

     Wickes Inc. and its consolidated  subsidiaries  ("Wickes" or the "Company")
is a leading supplier of lumber,  building  materials and manufactured  building
components  in the United  States.  The Company  sells its products and services
primarily to  residential  and  commercial  building  professionals,  repair and
remodeling contractors and, to a lesser extent, project do-it-yourself consumers
involved  in major home  improvement  projects.  At June 28,  2003,  the Company
operated 52 sales and  distribution  facilities  and 11 component  manufacturing
facilities in 19 states in the Midwest, Northeast, and South.

     The Company's  mission is to be the premier provider of building  materials
and services and manufactured  building components to the professional  segments
of the building and construction industry.

<PAGE>20


     The Company focuses on the professional  builder and contractor market. The
Company  targets five customer  groups:  the production or volume  builder;  the
custom  builder;  the tradesman;  the repair and  remodeler;  and the commercial
developer.  Its marketing  approach  encompasses three channels of distribution:
large  metropolitan  markets,  smaller rural markets,  and Wickes Direct.  These
channels  are  supported  by  the  Company's   network  of  building   component
manufacturing  facilities. In large metropolitan markets, the Company serves the
national,  regional,  and large  local  builder in larger  markets  with a total
solutions  approach and  specialized  services.  In smaller rural  markets,  the
Company provides the smaller building professional in less-populous markets with
tailored  products and  services.  Wickes  Direct  provides  materials  flow and
logistics management services to commercial  customers.  The Company also serves
building  professionals  through  its  network  of  11  component  manufacturing
facilities  that produce  value-added,  wood framed wall panels,  roof and floor
truss systems, and pre-hung interior and exterior doors.

                              RESULTS OF OPERATIONS

     In fiscal 2002,  the Company sold 31  distribution  centers and 4 component
plants to Lanoga Corporation (the "Lanoga Sale"). The operations included in the
transaction were treated as discontinued operations in accordance with statement
of Financial  Accounting  Standards No. 144  "Accounting  for the  Impairment or
Disposal  of  Long-lived  Assets."  The  results of these  operations  have been
reclassified  as  discontinued  operations  for the three and six-month  periods
ended June 28, 2002.

     The following table sets forth, for the periods  indicated,  the percentage
relationship  to  net  sales  of  certain  expense  and  income  items.  Certain
reclassifications have been made to prior year amounts to conform to the current
presentation.  All material  intercompany  balances and  transactions  have been
eliminated.  The table below,  and the  subsequent  discussion of the results of
operations,  has been  adjusted  to exclude  those  operations  reclassified  as
discontinued  operations  that were part of the  Lanoga  Sale.  (See  additional
discussion in Note 2 to the condensed consolidated financial statements.)
<TABLE>


                                   Three Months Ended       Six Months Ended
                                   ------------------       ----------------
                                   June 28,   June 29,     June 28,   June 29,
                                     2003       2002         2003       2002
                                     ----       ----         ----       ----
<S>                                <C>        <C>          <C>        <C>

Net sales                           100.0%     100.0%       100.0%     100.0%
Gross profit                         20.1%      21.4%        20.2%      20.9%
Selling, general and
  administrative expense             23.5%      19.2%        25.5%      19.9%
Depreciation                          0.8%       0.7%         0.8%       0.8%
Provision for doubtful accounts       0.2%       0.2%         0.2%       0.3%
Store closing costs                   2.9%       0.5%         2.2%       0.6%
Other operating income               (0.1)%     (1.1)%       (0.6)%     (0.7)%
(Loss) income from operations
before interest and taxes            (7.2)%      1.9%        (8.0)%      0.1%

</TABLE>


<PAGE>21

     The Company's  results of operations  are  historically  affected by, among
other  factors,  interest  rates,  lumber  prices,  housing  starts and  weather
conditions. In general, this year's weather conditions were comparable with last
year with the  exception  of late season snow storms this year which the Company
believes  postponed sales activity in the first quarter and severely damaged one
of the Company's  component  facilities.  The Company's weighted average rate of
interest on revolver  loans  increased  to 7.23%  during the first six months of
2003  compared  to 6.45% for the same  period  last  year.  The first six months
results were  negatively  affected by lower commodity  lumber prices,  down 3.1%
from last  year.  Housing  starts  nationally  were up 2.2% in the first half of
2003,  however in the Company's  primary markets,  the Northeast,  Midwest,  and
South,  starts were down 6.2%, up 0.4% and down 1.3%, from housing starts in the
first half of 2002, respectively.

     Losses from  continuing  operations  for the six months ended June 28, 2003
and June 29, 2002 were $45.1 million and $5.2 million, respectively.
<PAGE>22



                    Three Months Ended June 28, 2003 Compared
                    with the Three Months Ended June 29, 2002

     The following  discussion is based on the results of continuing  operations
of the Company.  The Lanoga Sale,  which is treated as discontinued  operations,
has been excluded  from prior year's  results.  (See Note 2 to the  consolidated
financial statements.)

    Net Sales
    ---------

     Net sales for the second quarter of 2003 decreased 20.5%, to $127.6 million
compared to $160.5  million for the second  quarter of 2002.  The sales decrease
primarily  was  attributable  to a $21.9  million  decline in sales from  closed
locations (excluding  discontinued  operations) and a 9.0% decline in same store
sales. Total sales to building professionals represented 93.5% of total sales in
the second quarter of 2003,  compared with 93.3% in 2002.  Housing starts in the
Company's primary markets,  the Northeast,  Midwest, and South, starts were down
6.5%, up 4.6% and down 2.8%,  from housing starts in the second quarter of 2002,
respectively.

     The Company  believes that sales  decreases for the three months ended June
28, 2003 primarily resulted from a decline in the number of locations, uncertain
economic conditions and lumber deflation.  The Company estimates that the effect
of lumber  deflation  for the second  quarter of 2003  decreased  total sales by
approximately  $2.1 million compared with the same period last year.  Lumber and
building  materials  increased to 85.9% of total sales in the second  quarter of
2003 compared with 84.2% in 2002.

     Products  that  exhibited  the  greatest  change in sales  dollars  for the
quarter ended June 28, 2003 versus the comparable prior year period were: lumber
and plywood (down 25.2%), doors and windows (down 13.5%), trusses and engineered
wood products (down 13.4%), roofing (down 22.3%) and mouldings (down 23.7%).

   Gross Profit
   ------------

     Gross profit  decreased to $25.6 million in the second quarter of 2003 from
$34.3 million in the second quarter of 2002, an $8.6 million or 25.2%  decrease.
Gross profit as a percentage  of sales  declined to 20.1% in the second  quarter
compared to a gross profit  percentage  of 21.4% in the second  quarter of 2002.
The  Company  believes  that the  decrease  in  gross  profit  dollars  resulted
primarily from the reduction in sales as discussed above. Of the Company's major
product lines,  building  materials  accounted for approximately  34.8% of total
Company sales,  up from 32.4% last year,  however,  gross margin  percentage for
these products decreased to 19.6% from 21.9% last year.

   Selling, General and Administrative Expense ("SG&A")
   ----------------------------------------------------

     SG&A expense decreased  approximately  $0.8 million to $30.0 million in the
second  quarter of 2003 from $30.8  million in the second  quarter of 2002. As a
percentage of sales,  SG&A increased to 23.5% of net sales in the second quarter
of 2003  compared  with  19.2% of net sales in the second  quarter of 2002.  The
increase as a percentage  of sales  primarily is due to the decrease in sales as
well as overhead costs which remained high until  reductions were completed late
in the second  quarter to re-align  overhead  with the  reduction in  locations.
Reductions in labor costs and other overhead costs were partially  offset by the
Company's  move  from  co-operative  marketing  and cost  recovery  programs  to
purchase based rebate programs in 2003,  professional  fees due to the company's
exchange offer, and an accrual for certain  anticipated  litigation  costs. As a
percentage of sales, salaries, taxes and benefits increased by 140 basis points,
elimination  of a cost  recovery  rebate  program  resulted in an increase of 80
basis points and office and professional fees increased 120 basis points.

<PAGE>23

   Depreciation
   ------------

     Depreciation  decreased  to $1.0  million  for the  second  quarter of 2003
compared to $1.1 million for the same period in 2002.


   Provision for Doubtful Accounts
   -------------------------------

     The   provision   for  doubtful   accounts  was   basically   unchanged  at
approximately  $0.3 million in the second quarter of 2003. The Company continues
to strive to improve its collection  efforts and reduce credit  exposure and bad
debts.


   Store Closing Costs
   -------------------

     Pursuant  to  certain   initiatives  to  improve   performance  and  reduce
under-performing  assets, the Company  consolidated seven sales and distribution
centers  during the first quarter of 2003.  There were no closings in the second
quarter of 2003,  however the Company did incur severance costs of approximately
$2.6 million  related to severance  benefits  paid to senior  executives  and an
additional 57 headquarters and 43 field personnel in a plan to re-align overhead
costs with the number of remaining locations.  In addition, the Company incurred
approximately  $1.1 million in property and other  carrying costs that primarily
include insurance, maintenance / repair and lease commitments. During the second
quarter of 2002,  the Company sold two  distributions  centers and incurred $0.3
million and $0.5  million  related to severing  ten  employees  and property and
other carrying costs,  respectively.  The following is a summary of the activity
in the reserve  balances from March 29, 2003 through June 28, 2003 and March 30,
2002 through June 29, 2002 (in thousands):
<TABLE>

                                                     Employee     Property and
                                                    Separation   Other Carrying
                                                      Costs           Costs         Total
                                                      ------          ------        ------
<S>                                                  <C>             <C>           <C>

       Accrual balance at March 29, 2003             $   147         $    45       $   192
       2nd Qtr Store closing and other costs           2,550           1,066         3,616
       2nd Qtr Related payments                       (2,353)         (1,039)       (3,392)
                                                      ------          ------        ------
       Accrual balance at June 28, 2003              $   344         $    72       $   416

       Accrual balance at March 30, 2002             $    75         $   122       $   197
       2nd Qtr Store closing and other costs             252             533           785
       2nd Qtr Related payments                         (327)           (583)         (910)
                                                      ------          ------        ------
       Accrual balance at June 29, 2002              $     0         $    72       $    72

</TABLE>
<PAGE>24


   Other Operating Income
   ----------------------

     Other  operating  income for the second  quarter of 2003 was income of $0.1
million  compared with income of $1.8 million for the second quarter 2002. Other
operating income primarily includes gains on early retirement of debt, the sales
or  disposals  of  property,  plant  and  equipment,  service  charges  assessed
customers  on past due accounts  receivables,  and  casualty  gains/losses.  The
decrease in 2003 primarily is due to a $0.2 million write-down of certain assets
to their net realizable value,  compared to a gain in 2002 from the sale of real
estate that resulted in a gain of approximately $1.3 million.

   Interest Expense
   ----------------

     In the second quarter of 2003,  interest expense  decreased to $3.6 million
from $4.1 million  during the second  quarter of 2002.  The  Company's  weighted
average  rate of  interest  on all debt  increased  to 10.3%  during  the second
quarter of 2003  compared to 7.7% for the same period  last year.  The  weighted
average rate of interest  increased as a result of using an effective or average
interest rate of 16.5% for the Senior  Secured Notes issued in February of 2003.
See additional discussion at Note 4 to the consolidated financial statements and
in  Liquidity  and Capital  Resources  included in  Managements  Discussion  and
Analysis.  The  Company's  average  debt levels  decreased  by 39.6% from second
quarter 2002 to second quarter 2003. This decrease in outstanding debt primarily
is due to the use of  proceeds  from the Lanoga  Sale to pay down the  revolving
credit facility.

    Income Taxes
    ------------

     The  Company  recorded a $29.6  million  charge to  establish  a  valuation
allowance for its net deferred tax assets  including  net  operating  loss carry
forwards  during the second  quarter of 2003.  These  conclusions  were  reached
largely due to the uncertainty  around the Company's  ability to utilize certain
operating loss carry forwards  based on the Company's  operating  results in the
most recent  three-year period and doubt about the Company's ability to continue
as a going concern,  which represented negative evidence sufficient to require a
full valuation allowance under the provisions of SFAS 109 "Accounting for Income
Taxes".

     The Company will be required to maintain a full valuation allowance for its
net deferred tax assets and net operating loss carry  forwards until  sufficient
positive  evidence exists to support  reversal of the remaining  reserve.  Until
such  time,  except for state and local  provisions,  the  Company  will have no
reported tax provision, net of valuation allowance adjustments.

<PAGE>25


     The income tax  expense  from  continuing  operations  for the  three-month
period  ended June 28,  2003 was $24.5  million,  which  differs  from the $29.6
million  disclosed above due to the impact of a $5.1 million  benefit  generated
during the second quarter, which was fully provided for. Income tax expense from
continuing  operations  for the three month  period ended June 29, 2002 was $0.2
million.  The Company's  effective tax rate from  continuing  operations for the
three-month  period ended June 29, 2002 was 22.8% which includes franchise taxes
and non-deductible items of $0.1 million.


                     Six Months Ended June 28, 2003 Compared
                     with the Six Months Ended June 29, 2002


     The following  discussion is based on the results of continuing  operations
of the Company.  The Lanoga Sale,  which is treated as discontinued  operations,
has been  excluded  from  prior  year's  results.  (See Note 2 to the  condensed
consolidated financial statements.)


   Net Sales
   ---------

     Net sales for the first six  months of 2003  decreased  $67.3  million,  or
22.7%,  to $228.7  million from $295.9  million in the first six months of 2002.
The sales  decrease  primarily was  attributable  to a $43.3 million  decline in
sales from closed  locations  (excluding  discontinued  operations)  and a 12.3%
decline in same store sales. Total sales to building  professionals  represented
93.9% of total sales,  compared to 93.6% for the same quarter last year. Housing
starts in the Company's  primary  markets,  the Northeast,  Midwest,  and South,
starts were down 6.2%, up 0.4% and down 1.3%,  from housing  starts in the first
half of 2002, respectively.

     The Company believes that sales decreases for the six months ended June 28,
2003 primarily  resulted from a decline in the number of locations,  late season
snow  storms in the  first  quarter,  uncertain  economic  conditions,  internal
reorganizations  and lumber deflation.  The Company estimates that the effect of
lumber  deflation  for the first six  months of 2003  decreased  total  sales by
approximately  $4.8 million compared with the same period last year.  Lumber and
building materials  increased to 85.8% of total sales in the first six months of
2003 compared with 84.0% for the same period in 2002.

     Products that  exhibited  the greatest  change in sales dollars for the six
months ended June 28, 2003 versus the comparable prior year period were:  lumber
and plywood (down 28.0%), doors and windows (down 15.7%), trusses and engineered
wood products (down 13.8%) and roofing (down 26.4%).

<PAGE>26


   Gross Profit
   ------------

     Gross profit decreased $15.6 million to $46.2 million or 20.2% of net sales
for 2003 compared with $61.9 million or 20.9% of net sales for 2002. The Company
believes that deflation in lumber and drywall prices  decreased the dollar value
of gross profit by approximately  $1.0 million for the six months ended June 28,
2003.  During the first half of 2003, the Company closed or  consolidated  seven
facilities  and recorded a charge to gross profit of $0.5 million for  inventory
liquidation  costs.  Of the Company's  major product lines,  building  materials
accounted for  approximately  36.2% of total Company  sales,  up from 33.5% last
year,  however,  gross margin  percentage for these products  decreased to 20.4%
from 21.7% last year.

   Selling, General, and Administrative Expense
   --------------------------------------------

     SG&A  expense  decreased  $0.6  million  or 1.0% to $58.4  million  in 2003
compared  with  $58.9  million  in 2002.  As a  percentage  of net  sales,  SG&A
increased to 25.5% in the first six months of 2003,  compared  with 19.9% of net
sales in the first six months of 2002.  The  increase as a  percentage  of sales
primarily  is due to the  decrease  in sales  as well as  overhead  costs  which
remained high until  reductions  were  completed  late in the second  quarter to
re-align  overhead  with the reduction in  locations.  In addition,  the Company
moved from  co-operative  marketing and cost recovery programs to purchase based
rebate  programs  in 2003 and has accrued  for  certain  anticipated  litigation
costs. As a percentage of sales,  salaries,  taxes and benefits increased by 220
basis points,  change to purchase base rebate program  increased SG&A expense by
105 basis points and office and professional fees increased 117 basis points.

   Depreciation
   ------------

     Depreciation costs decreased  approximately $0.4 million to $1.9 million in
the first six months of 2003, compared with $2.3 million in the first six months
of 2002. As a percentage of sales, depreciation costs compared to last year were
flat.

   Provision for Doubtful Accounts
   -------------------------------

     Provision for doubtful accounts  decreased to approximately $0.4 million or
0.2% of sales in the first six months of 2003 from approximately $0.8 million or
0.3% of sales  for the  first  six  months  of 2002.  Approximately  $64,000  of
provision  for  doubtful  accounts  related to closed  locations in this period,
compared to $168,000 for the same period last year.

<PAGE>27


   Store Closing Costs and Other Charges
   -------------------------------------

     Pursuant  to  certain   initiatives  to  improve   performance  and  reduce
under-performing  assets, the Company has closed or consolidated seven locations
during the first six months of 2003. The Company incurred costs of approximately
$3.2 million  related to severance  benefits  paid to senior  executives  and an
additional 66 headquarters and 86 field  personnel.  In addition the Company has
incurred  $1.8  million in  property  and other  carrying  costs that  primarily
include insurance,  maintenance / repair and lease commitments. During the first
six  months of 2002 the  Company  sold  seven  locations  and  consolidated  one
location.  Employee  severance  costs for 74  employees  and  property and other
carrying  costs  incurred  during the first six months of 2002 were $1.0 million
and $0.7 million respectively. The following is a summary of the activity in the
reserve  balances from December 29, 2001 through June 29, 2002 and from December
28, 2002 through June 28, 2003 (in thousands):
<TABLE>


                                                   Employee       Property and
                                                  Separation     Other Carrying
                                                      Costs           Costs         Total
                                                      ------          ------        ------
<S>                                                 <C>             <C>          <C>

       Accrual balance at December 28, 2002          $   385         $    15       $   400
       1st Qtr Store closing and other costs             610             701         1,311
       1st Qtr Related payments                          848             671         1,519
                                                      ------          ------        ------
       Accrual balance at March 29, 2003             $   147         $    45       $   192
       2nd Qtr Store closing and other costs           2,550           1,066         3,616
       2nd Qtr Related payments                        2,353           1,039         3,392
                                                      ------          ------        ------
       Accrual balance at June 28, 2003              $   344         $    72       $   416

       Accrual balance at December 29, 2001              139             286           425
       1st Qtr Store closing and other costs             763             199           962
       1st Qtr Related payments                          827             363         1,190
                                                      ------          ------        ------
       Accrual balance at March 30, 2002             $    75         $   122       $   197
       2nd Qtr Store closing and other costs             252             533           785
       2nd Qtr Related payments                          327             583           910
                                                      ------          ------        ------
       Accrual balance at June 29, 2002              $     0         $    72       $    72

</TABLE>

   Other Operating Income
   ----------------------

     Other operating income decreased to approximately $1.3 million in the first
six months of 2003,  compared with $2.2 million in the first six months of 2002.
Other operating  income  primarily  includes the gain on the early retirement of
debt,  sale or  disposal  of  property,  plant and  equipment,  service  charges
assessed customers on past due accounts receivable,  and casualty losses. During
the first six months of 2002,  the Company sold seven  facilities for a net gain
of $1.3  million,  while in the first six months of 2003 the Company  recorded a
$0.9 million gain on the early retirement of debt partially offset by write-down
of certain assets to their net realizable value.

<PAGE>28

   Interest Expense
   ----------------

     Interest expense  decreased to $7.1 million in the first six months of 2003
from $8.5  million  in the first six  months of 2002.  Interest  expense in 2003
includes a charge for the  write-off of a portion of debt issue costs related to
the Fleet  Credit  Agreement of $0.5  million.  The  Company's  weighted-average
interest  rate on all  outstanding  borrowings  increased  to 10.7%  during this
period,  compared  to 8.2% for the  comparable  period last year.  The  weighted
average  interest  rate was affected by the increase in the effective or average
interest rate of 16.5% attributed to the Senior Secured Notes issued in February
2003.  See  additional  discussion  at  Note  4 to  the  consolidated  financial
statements  and in  Liquidity  and Capital  Resources  included  in  Managements
Discussion and Analysis.  The Company's  average debt levels  decreased by 43.5%
from first half of 2002 to first half 2003.  This decrease in  outstanding  debt
primarily  is due to the use of  proceeds  from the Lanoga  Sale to pay down the
revolving credit facility.

   Income Taxes
   ------------

     The  Company  recorded a $29.6  million  charge to  establish  a  valuation
allowance for its net deferred tax assets  including  net  operating  loss carry
forwards  during the second  quarter of 2003.  These  conclusions  were  reached
largely due to the uncertainty  around the Company's  ability to utilize certain
operating loss carry forwards  based on the Company's  operating  results in the
most recent  three-year period and doubt about the Company's ability to continue
as a going concern,  which represented negative evidence sufficient to require a
full valuation allowance under the provisions of SFAS 109 "Accounting for Income
Taxes".

     The Company will be required to maintain a full valuation allowance for its
net deferred tax assets and net operating loss carry  forwards until  sufficient
positive  evidence exists to support  reversal of the remaining  reserve.  Until
such  time,  except for state and local  provisions,  the  Company  will have no
reported tax provision, net of valuation allowance adjustments.


     The income tax expense from continuing  operations for the six-month period
ended June 28, 2003 was $19.7  million,  which  differs  from the $29.6  million
disclosed above due to the impact of a $9.9 million benefit generated during the
six  month  period,  which was fully  provided  for.  Income  tax  expense  from
continuing  operations  for the  six-month  period  ended June 29, 2002 was $2.9
million which included franchise taxes and non-deductible items of $0.1 million.
The Company's  effective tax rate from  continuing  operations for the six-month
period ended June 29, 2002 was 35.7%.

     This assessment  constitutes  Forward-Looking  Information made pursuant to
the safe harbor  provisions of the Private  Securities  Litigation Reform Act of
1995 and is inherently  subject to uncertainty  and dependent upon the Company's
future  profitability,  which in turn depends  upon a number of  important  risk
factors  including,  but not  limited  to, the  effectiveness  of the  Company's
operational efforts, the sale of certain assets,  cyclicality and seasonality of
the Company's business,  the effects of the Company's substantial leverage,  and
competition.

<PAGE>29


                         LIQUIDITY AND CAPITAL RESOURCES

     The Company's principal sources of working capital and liquidity are income
from  operations  and  borrowings  under  its  credit  facility.  The  Company's
assessment  of  its  future  funds  availability   constitutes   Forward-Looking
Information  made pursuant to the Private  Securities  Litigation  Reform Act of
1995 and is  inherently  subject to  uncertainty  resulting  from,  among  other
things,  the  factors  discussed  in  paragraph  three  of  Item  2:  Management
Discussion and Analysis.  The Company's primary need for capital resources is to
finance  inventory,  accounts  receivable,  improvements  to plant  property and
equipment, insurance reserves and debt service.

     During the first six months of 2003, net cash used in operating  activities
was $33.1 million  compared  with net cash  provided by operating  activities of
$2.1 for the first six months of 2002.  The  increase in cash used in  operating
activities  primarily  is due to net  losses for the  period  and  increases  in
inventory and accounts receivable from December 28, 2002 to June 28, 2003.

     The Company's  accounts  receivable from continuing  operations at June 28,
2003  increased  $8.6  million.  This  increase  primarily  is the result of the
seasonal increase in sales.

     The Company's  inventory balance at June 28, 2003 increased $2.9 million or
5.5% when compared to the balance at December 28, 2002. This increase  primarily
is also the result of the  seasonal  increase  in sales.  Accounts  payable  and
accrued  liabilities at June 28, 2003 increased  approximately $2.3 million from
December 28, 2002.

     The Company's capital expenditures consist primarily of the construction of
product  storage  facilities,  the  remodeling  and  reformatting  of sales  and
distribution facilities and component manufacturing facilities, and the purchase
of vehicles,  equipment and management information systems for both existing and
new operations.  The Company also may make  expenditures to establish or acquire
operations to expand or complement  its existing  operations,  especially in its
major markets.  In the first six months of 2003, the Company spent approximately
$2.0  million on capital  expenditures,  compared  to $0.5  million for the same
period in 2002. Under the Merrill Credit Agreement,  capital expenditures during
2003 are currently limited to $6.0 million.  The Company expects to fund capital
expenditures through borrowings and its internally generated cash flow.


     At June 28, 2003 the Company operated 52 sales and distribution centers and
11 component  manufacturing  facilities  compared with 91 sales and distribution
facilities  and 24 component  manufacturing  facilities  at June 29,  2002.  The
reduction  in  facilities  is due to the Lanoga  Sale as well as other  facility
sales and  consolidations  that took place during this period. At June 28, 2003,
there  were  no  material  commitments  to  third  parties  for  future  capital
expenditures.

<PAGE>30

     The  Company  maintained  excess  availability  under  the  Merrill  Credit
Agreement throughout the first six months of 2003. The Company's receivables and
inventory typically increase in the second and third quarters of the year due to
higher sales in the peak building  season.  In these same  periods,  the Company
typically reaches its peak utilization of its revolving credit agreement because
of the increased  inventory and receivables needed for the peak building season.
At June 28,  2003,  the Company  had  outstanding  borrowings  under the Merrill
Credit  Agreement of $64.4 million,  the minimum  availability  requirement  was
$15.0 million and the unused  availability was $27.7 million.  Therefore,  as of
June 28, 2003 after all reserves and minimums,  the Company had $12.7 million of
excess availability

   Senior Subordinated Debt
   ------------------------

     On February 26, 2003,  the Company  completed its offer to exchange its new
Senior Secured Notes due 2005 for any and all of its  outstanding 11 5/8% Senior
Subordinated  Notes due 2003.  The Company  accepted  for the exchange all $42.8
million of Senior  Subordinated  Notes validly tendered in exchange for an equal
principal  amount  of Senior  Secured  Notes.  The  tendered  notes  represented
approximately  67% of the Senior  Subordinated  Notes outstanding as of February
26, 2003.  The Senior  Secured  Notes,  which bear interest at 11 5/8% per annum
from  the date of  issuance  through  December  15,  2003  and at 18% per  annum
thereafter, are secured by subordinated liens on the Company's owned real estate
and  equipment.  These liens are junior to the liens  securing  amounts  payable
under the Company's senior credit facility.

     Concurrent with the closing of the exchange offer, the indenture  governing
the outstanding  Senior  Subordinated Notes was amended to remove or modify many
of the restrictive covenants.  Those restrictions included (but were not limited
to) certain  limitations on transactions  with  affiliates,  dividend  payments,
changes in control,  and sales of assets. In addition,  the Senior Secured notes
permit the Company to call the senior secured notes, at its option, at declining
discounts starting at 15% on December 15, 2003.

     In March 2003,  the  Company  redeemed  outstanding  Senior  Secured  Notes
aggregating $5.9 million face value for $5.0 million. The resulting gain of $0.9
million was recorded in other  operating  income on the  Company's  Statement of
Operations.

<PAGE>31

     The Company  continues to carry Senior  Subordinated  Notes due in December
2003  of  approximately  $21.1  million.  Sufficient  liquidity  to  meet  these
obligations  and the interest  obligations on the Senior Secured Notes when they
come due is contingent  on a number of risk  factors,  as discussed in Item 1 of
the  Company's  2002  Form10-K.  The Company  does not believe it will  generate
sufficient  cash from  operations  to pay the  principal  amount  of the  Senior
Subordinated  Notes when due. The Company may seek to secure the necessary funds
through the sale of additional  equity,  through borrowings or both. There is no
assurance  that the Company  will be able to obtain  such funds or whether  such
funds can be obtained on terms acceptable to the Company. If the Company secures
additional  funds  through the issuance of  additional  equity  securities,  the
Company's existing stockholders will likely experience dilution of their present
equity ownership  position and voting rights.  Depending on the number of shares
and the terms and conditions of the issuance,  any new equity  securities  could
have rights,  preferences, or privileges senior to those of the Company's common
stock. If the Company secured funds through additional borrowings, the terms and
conditions  of such  borrowings  could be more  onerous to the Company  than the
terms and  conditions of the Company's  existing  senior  subordinated  notes or
other existing borrowings.  The Company also believes that even if the principal
amount  of the  Senior  Subordinated  Notes  are paid it will  need to  increase
revenues  to  generate  sufficient  cash to pay the  increase in interest in its
Senior  Secured  Notes to 18%,  effective  December 15, 2003.  In addition,  the
Company has retained an investment bank, Brown Gibbons Lang & Company, to assist
in finalizing  the  Company's  plans to improve its capital  structure  with the
objective of providing longer term sustainability.

   Revolving Credit Facility
   -------------------------

     Concurrent  with the Exchange  Offer,  on February  26,  2003,  the Company
completed a refinancing  of its Credit  Agreement  with Fleet and term notes and
entered into the new Credit Agreement dated February 26, 2003 with Merrill Lynch
("Merrill Credit Agreement"). The total commitment was reduced from the original
$251.7 million ($200 million  revolving line of credit and $51.7 million of term
notes) to $125 million ($100 million revolving line of credit and $25 million of
term notes).  The Merrill Credit Agreement expires on February 26, 2007, and the
term notes are now due February 26, 2007,  with quarterly  repayments  beginning
May 31, 2003.

     On March 28, 2003, the Company requested the lenders to extend the due date
for delivery of certain deposit  account  control  agreements with certain local
bank deposit  accounts  maintained  by the borrow.  The lenders  agreed to amend
(First  Amendment) the Credit  Agreement to extend delivery of these  agreements
until May 31, 2003.

<PAGE>32


     As a result of (i) the  Company's  failure to deliver  to the  lenders  its
fiscal 2002 audited financial  statements by March 30, 2003 and (ii) as of April
4, 2003,  Riverside  Group Inc. and J. Steven Wilson ceasing between them to own
at least 25% of the Company's  outstanding common stock and Imagine Investments,
Inc.  owning a greater  percentage of such shares than Riverside and Mr. Wilson,
certain  events of  default  arose  under the  Merrill  Credit  Agreement.  Such
defaults were simultaneously  waived by the lenders and the Credit Agreement was
amended  (Second  Amendment)  in certain  respects,  including the addition of a
provision which permitted the Company to make a severance  payment to Mr. Wilson
and placed a limitation on the Company's ability to repurchase, redeem or retire
Senior  Subordinated  Notes. In connection with such waiver and amendments,  the
Company paid to the lenders a fee of $312,500.

     On May 31, 2003 the  Merrill  Credit  Agreement  was again  amended  (Third
Amendment) whereby the lenders agreed to (i) amend the Credit Agreement in order
to reduce the revolving loan commitment by $15.0 million and (ii) extend the due
date to August 31, 2003 for the delivery of Deposit Account  Control  Agreements
with respect to certain deposit accounts maintained by the Company.  The Company
received a refund of  $112,500 of the  original  closing  fees  pursuant to this
amendment.

     As of June 28, 2003, the Company was in compliance  with its bank covenants
with the exception of its minimum  EBITDA  requirement.  On August 15, 2003, the
lenders agreed to waive the default of its minimum EBITDA  requirement and amend
the levels of EBITDA as defined within the Credit Agreement (Fourth  Amendment).
In addition, it amended the original credit agreement to include a prepayment of
term loan of $1.5 million by September 20, 2003,  less any  prepayment  from the
proceeds of the sale of certain real estate.  Further,  the  agreement  requires
that the Company  maintain  minimum  availability of $15 million  throughout the
remainder of the agreement and a 25 basis point increase in interest spreads. In
connection  with such waiver and  amendments,  the Company paid to the lenders a
fee of $100,000.

     As of June 28, 2003 there was $64.4 million  outstanding  under the Merrill
Credit  Agreement of which $39.8 million was revolving  credit and $24.6 million
was term notes. The spread on prime rate borrowings under the Merrill  agreement
ranges  from 1.25% to 2.00% over  prime for  revolving  loans and 2.00% to 2.75%
over prime under the term notes.  The spread for LIBOR  based  borrowing  ranges
from 2.50% to 3.25% over LIBOR for revolving loans and 3.25% to 4.00% over LIBOR
for term notes.  The spread over the prime or LIBOR  rates is  determined  based
upon the Company's  Fixed Charge  Coverage  Ratio,  as defined under the Merrill
Credit  Agreement.  However,  an event of  default  could  increase  each of the
Company's prime and LIBOR margins by 25 basis points. The Company's base rate on
revolving loans, 6.00% at June 28, 2003 and 5.50% at June 29, 2002,  included an
interest spread over prime of 1.75% and 0.75%, respectively. The Company's LIBOR
<PAGE>33

borrowing rate on revolving loans,  4.12% at June 28, 2003 and 4.58% at June 29,
2002,  included an interest spread over LIBOR of 3.00% and 2.75%,  respectively.
The Company's  weighted  average interest rates on revolver loans were 7.23% and
6.45% for the six months  ended June 28, 2003 and June 29,  2002,  respectively.

     The Merrill Credit Agreement  limits the level of capital  expenditures for
each annual period,  while allowing for reinvestment of proceeds on asset sales.
The  Company is also  subject to certain  minimum  levels of EBITDA,  as defined
within  the  Credit  Agreement.  Availability  is  generally  limited  to 85% of
eligible accounts receivable and 60% of eligible inventory.  As of June 28, 2003
unused  availability  was $27.7  million  and,  under the Merrill  Agreement  as
amended, minimum availability is required to be $15 million for the remainder of
the agreement.  Therefore, the Company held $12.7 million of excess availability
as of June 28, 2003 after all reserves and minimums were deducted.

     Under the Merrill  Credit  Agreement,  a commitment  fee of .375% to .5% is
payable on the unused  revolving  credit  amount.  Ranges of fees are determined
based upon the aforementioned  Fixed Charge Coverage Ratio, as defined under the
Credit Agreement.

   Net Operating Loss Carryforwards
   --------------------------------

     Though fully provided for, the Company has net operating loss carryforwards
available to offset future taxable income of  approximately  $22.4 million as of
December  28, 2002  expiring in the years 2011  through  2021 (see Note 4 to the
financial statements and discussion in Item 2). On July 22, 2003, as a result of
Bradco Supply and its affiliates  increasing  their common stock holdings in the
Company above 15% of total shares  outstanding,  an ownership change occurred as
per Internal  Revenue Code Section 382. A change in control of the Company,  for
tax purposes, may limit the Company's ability to utilize these carryforwards.

<PAGE>34




                          WICKES INC. AND SUBSIDIARIES

Item 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     For information of the Company's  Quantitative and Qualitative  Disclosures
About Market Risk,  please see the Company's  Annual Report on Form 10-K for the
fiscal year ended December 28, 2002.  There have been no material changes in the
Company's  quantitative or qualitative  exposure to market risk since the end of
fiscal 2002.


Item 4. CONTROLS AND PROCEDURES

     The Company has performed an evaluation  under the supervision and with the
participation of management,  including the Chief Executive  Officer ("CEO") and
Chief  Financial  Officer  ("CFO"),  of  the  effectiveness  of the  design  and
operation of the disclosure  controls and procedures.  Based on that evaluation,
the CEO and CFO  concluded  that the  disclosure  controls and  procedures  were
effective as of June 28,  2003.  There have been no  significant  changes in the
internal  controls or other  factors that could  significantly  affect  internal
controls subsequent to June 28, 2003.

<PAGE>35




                                     PART II
                                OTHER INFORMATION

Item 1.   Legal Proceedings
          -----------------

Item 2.   Changes in Securities and Use of Proceeds
          -----------------------------------------

  (a)     None
  (b)     None
  (c)     None
  (d)     None


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

  (a)     Exhibits

          4.1(j) Waiver and First Amendment to Credit Agreement,  dated April 4,
          2003 among  Registrant  and Merrill  Lynch Capital as Lender and Agent
          for  each  Lender

          4.1(k) Waiver and Second Amendment to Credit Agreement, dated April 4,
          2003 among  Registrant  and Merrill  Lynch Capital as Lender and Agent
          for each Lender.

          4.1(l) Consent and Third Amendment to Credit Agreement,  dated May 31,
          2003 among  Registrant  and Merrill  Lynch Capital as Lender and Agent
          for each Lender.

          4.1(m) Waiver and Fourth  Amendment to Credit  Agreement  dated August
          15,  2003 among  Registrant  and Merrill  Lynch  Capital as Lender and
          Agent for each Lender.

          99.1 Certification of Chief Executive Officer

          99.2 Certification of Chief Financial Officer

  (b)     Reports on Form 8-K

          A Current  Report on Form 8-K dated April 3, 2003 was filed under Item
          5  disclosing  that the Company  confirmed  receiving  an  unsolicited
          proposal  from  Bradco  Supply  Corporation  to acquire  all shares of
          Wickes  common stock not owned by Bradco and its  affiliate  for $1.12
          per share.

          A Current  Report on Form 8-K dated April 7, 2003 was filed under Item
          5  disclosing  the  acquisition  of  Wickes  common  stock by  Imagine
          Investments,  Inc. and the resignation of J. Steven Wilson as Chairman
          and Chief Executive Officer of Wickes. The acquisition resulted in 51%
          ownership of the  Company's  outstanding  common  stock.  In addition,
          Albert Ernest, Jr., a director of Wickes since 1993, resigned from the
          Company's Board of Directors.

<PAGE>36


          A Current Report on Form 8-K dated April 16, 2003 was filed under Item
          5  disclosing  that the Company  received  notice from Nasdaq that the
          Company has not regained  compliance  in accordance  with  Marketplace
          Rule  4310 (c) (8) (D).  The  notice  stated  that the  Company  meets
          initial  listing  requirements  fro the Nasdaq  SmallCap  Market under
          Marketplace Rule 4310 (c) (2) (A).

          A Current Report on Form 8-K dated April 21, 2003 was filed under Item
          1 disclosing  that Imagine  Investments,  Inc. and its  affiliates  as
          current beneficiary owners of 4,308,443 shares of Wickes common stock,
          or  approximately  51.9%  of the  Company's  outstanding  shares  and,
          therefore,  may be deemed to control Wickes. The item also stated that
          Robert E.  Mulcahy  III, a director  since  1988,  has been  appointed
          Chairman  of  Wickes  Inc.,  and that the  Wickes  Board of  Directors
          established an Executive Management Committee to oversee the Company's
          operations on a day-to-day basis.

          A Current Report on Form 8-K dated April 28, 2003 was filed under Item
          5  disclosing  the  election of Jim O'Grady as the new  President  and
          Chief Executive Officer of Wickes Lumber.

          A Current  Report on Form 8-K dated June 13, 2003 was filed under Item
          5  disclosing  that the  Company  was  notified  by Nasdaq that it has
          regained  compliance  with  Marketplace  Rule  42.10  (c)  (4),  which
          requires  a  minimum  bid  price  of $1.00  per  share  and that  this
          compliance matter is closed.

          A Current  Report on Form 8-K dated July 15, 2003 was filed under Item
          5  disclosing  the  resignation  of  Frederick  H.  Schultz  from  his
          positions on the Company's Board of Directors.

<PAGE>37




                                   SIGNATURES

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

                                           WICKES INC.


                                     By:   /s/ Jim O'Grady
                                           ---------------
                                           Jim O'Grady
                                           President and Chief Executive Officer


                                     By:   /s/ James A. Hopwood
                                           --------------------
                                           James A. Hopwood
                                           Senior Vice President and
                                           Chief Financial Officer


Date:  August 15, 2003



<PAGE>38


                            SECTION 302 CERTIFICATION
                            -------------------------

I, Jim O'Grady, certify that:


1. I have reviewed this quarterly report on Form 10-Q of Wickes Inc.;


2. Based on my  knowledge,  this  quarterly  report  does not contain any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made, not misleading with respect to the period covered by this report;


3.  Based  on my  knowledge,  the  financial  statements,  and  other  financial
information included in this report, fairly present in all material respects the
financial  condition,  results of operations and cash flows of the registrant as
of, and for, the periods presented in this report;


4.  The  registrant's  other  certifying  officer  and  I  are  responsible  for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a) designed such disclosure  controls and  procedures,  or cause such disclosure
controls and  procedures to be designed  under our  supervision,  to ensure that
material  information  relating to the  registrant,  including its  consolidated
subsidiaries, is made known to us by others within those entities,  particularly
during the period in which this report is being prepared;


b) evaluated  the  effectiveness  of the  registrant's  disclosure  controls and
procedures and present in this report our conclusions about the effectiveness of
the disclosure  controls and procedures,  as of the end of the period covered by
this report based on such evaluation; and


c) disclosed in this report any change in the registrant's internal control over
financial  reporting that occurred  during the  registrant's  most recent fiscal
quarter (the  registrant's  fourth quarter in the case of an annual report) that
has  materially  affected,  or is reasonable  likely to materially  affect,  the
registrant's internal control over financial reporting; and


5. The registrant's other certifying officer and I have disclosed,  based on our
most recent  evaluation of internal  control over  financial  reporting,  to the
registrant's auditors and the audit committee of registrant's board of directors
(or persons performing the equivalent function):


a) all  significant  deficiencies  and  material  weaknesses  in the  design  or
operation of internal  control over  financial  reporting  which are  reasonably
likely  to  adversely  affect  the  registrant's  ability  to  record,  process,
summarize and report financial information;


b) any  fraud,  whether  or not  material,  that  involves  management  or other
employees who have a significant role in the registrant's internal controls.

Date: August 15, 2003               Signature: /s/ Jim O'Grady
      ---------------                          ---------------
                                               President and
                                               Chief Executive Officer

<PAGE>39


                            SECTION 302 CERTIFICATION
                            -------------------------

I, James Hopwood, certify that:


1. I have reviewed this quarterly report on Form 10-Q of Wickes Inc.;


2. Based on my  knowledge,  this  quarterly  report  does not contain any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made, not misleading with respect to the period covered by this report;


3.  Based  on my  knowledge,  the  financial  statements,  and  other  financial
information included in this report, fairly present in all material respects the
financial  condition,  results of operations and cash flows of the registrant as
of, and for, the periods presented in this report;


4.  The  registrant's  other  certifying  officer  and  I  are  responsible  for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

b) designed such disclosure  controls and  procedures,  or cause such disclosure
controls and  procedures to be designed  under our  supervision,  to ensure that
material  information  relating to the  registrant,  including its  consolidated
subsidiaries, is made known to us by others within those entities,  particularly
during the period in which this report is being prepared;


b) evaluated  the  effectiveness  of the  registrant's  disclosure  controls and
procedures and present in this report our conclusions about the effectiveness of
the disclosure  controls and procedures,  as of the end of the period covered by
this report based on such evaluation; and


c) disclosed in this report any change in the registrant's internal control over
financial  reporting that occurred  during the  registrant's  most recent fiscal
quarter (the  registrant's  fourth quarter in the case of an annual report) that
has  materially  affected,  or is reasonable  likely to materially  affect,  the
registrant's internal control over financial reporting; and


5. The registrant's other certifying officer and I have disclosed,  based on our
most recent  evaluation of internal  control over  financial  reporting,  to the
registrant's auditors and the audit committee of registrant's board of directors
(or persons performing the equivalent function):


a) all  significant  deficiencies  and  material  weaknesses  in the  design  or
operation of internal  control over  financial  reporting  which are  reasonably
likely  to  adversely  affect  the  registrant's  ability  to  record,  process,
summarize and report financial information;


b) any  fraud,  whether  or not  material,  that  involves  management  or other
employees who have a significant role in the registrant's internal controls.


Date: August 15, 2003               Signature: /s/ James A. Hopwood
      ---------------                          --------------------
                                               Senior Vice President and
                                               Chief Financial Officer

<PAGE>40


                                                                    Exhibit 99.1

                                  CERTIFICATION
                       PURSUANT TO 18 U.S.C. SECTION 1350,
           AS ADOPTED BY SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

     I, Jim O'Grady,  President and Chief Executive  Officer of Wickes Inc. (the
"Registrant")  hereby  certify,  pursuant to 18  U.S.C.ss.  1350,  as adopted by
Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

     (1) the  Quarterly  Report on Form 10-Q for the period ending June 28, 2003
as filed  with/submitted  to the U.S.  Securities and Exchange  Commission  (the
"Report"),  fully  complies  with  the  requirements  of  Section  13(a)  of the
Securities Exchange Act of 1934, as amended; and

     (2)  the  information  contained  in the  Report  fairly  presents,  in all
material  respects,  the  financial  condition  and results of operations of the
Registrant.

Dated:  August 15, 2003


                            /s/ Jim O'Grady
                            ---------------
                            Jim O'Grady,
                            President and Chief Executive Officer



     A signed  original of this  written  statement  required by Section 906 has
been  provided to Wickes Inc. and will be retained by Wickes Inc. and  furnished
to the Securities and Exchange Commission or its staff upon request.

<PAGE>41

                                                                    Exhibit 99.2

                                  CERTIFICATION
                       PURSUANT TO 18 U.S.C. SECTION 1350,
           AS ADOPTED BY SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

     I, James A. Hopwood,  Senior Vice President and Chief Financial  Officer of
Wickes Inc. (the "Registrant") hereby certify, pursuant to 18 U.S.C.ss. 1350, as
adopted by Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

     (1) the  Quarterly  Report on Form 10-Q for the period ending June 28, 2003
as filed  with/submitted  to the U.S.  Securities and Exchange  Commission  (the
"Report"),  fully  complies  with  the  requirements  of  Section  13(a)  of the
Securities Exchange Act of 1934, as amended; and

     (2)  the  information  contained  in the  Report  fairly  presents,  in all
material  respects,  the  financial  condition  and results of operations of the
Registrant.

Dated:  August 15, 2003

                           /s/ James A. Hopwood
                           --------------------
                           James A. Hopwood,
                           Senior Vice President and
                           Chief Financial Officer




     A signed  original of this  written  statement  required by Section 906 has
been  provided to Wickes Inc. and will be retained by Wickes Inc. and  furnished
to the Securities and Exchange Commission or its staff upon request.