<PAGE>   1
================================================================================
                  SECURITIES AND EXCHANGE COMMISSION FORM 10-Q

                             WASHINGTON, D.C. 20549


                                   FORM 10-Q

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

                  FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1997

                                       OR

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

               FOR THE TRANSITION PERIOD FROM _______ TO ________

                          COMMISSION FILE NO. 0-81084

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


              DELAWARE                                         75-2283921
    (State or other jurisdiction of                         (I.R.S. Employer
    incorporation or organization)                         Identification No.)

   6688 N. CENTRAL EXPWY., SUITE 800
            DALLAS, TEXAS                                        75206
(Address of principal executive offices)                       (Zip code)

                                 (214) 750-5809
              (Registrant's telephone number, including area code)

                                 NOT APPLICABLE
              (Former name, former address and former fiscal year,
                         if changed since last report.)

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

               YES [X]                                  NO [ ]


As of August 7, 1997, there were 100 shares of the registrant's common stock
outstanding, all of which were owned by PageMart Wireless, Inc.

The registrant meets the conditions set forth in General Instruction H(1)(a)
and (b) of Form 10-Q and is therefore filing this Form with the reduced
disclosure format.
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<PAGE>   2
                        PAGEMART, INC. AND SUBSIDIARIES
                               INDEX TO FORM 10-Q


<TABLE>
<CAPTION>
PART I.  FINANCIAL INFORMATION                                               PAGE
                                                                             ----

<S>                                                                            <C>
ITEM 1.  FINANCIAL STATEMENTS

         Condensed Consolidated Balance Sheets at December 31, 1996
           and June 30, 1997 ..............................................    3

         Condensed Consolidated Statements of Operations for the
           Three and Six Months Ended June 30, 1996 and 1997 ..............    4

         Condensed Consolidated Statements of Cash Flows for the Six
           Months Ended June 30, 1996 and 1997 ............................    5

         Notes to Condensed Consolidated Financial Statements .............    6

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF
           FINANCIAL CONDITION AND RESULTS OF OPERATIONS ..................    6


PART II. OTHER INFORMATION


ITEM 1.  LEGAL PROCEEDINGS ................................................   14

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K .................................   14
</TABLE>


                                       2
<PAGE>   3
                        PAGEMART, INC. AND SUBSIDIARIES
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                  (DOLLARS IN THOUSANDS, EXCEPT SHARE AMOUNTS)




<TABLE>
<CAPTION>
                                                    December 31,      June 30,
                                                        1996            1997
                                                    ------------    ------------
                                                                     (Unaudited)
<S>                                                 <C>             <C>         
ASSETS
Current assets:
  Cash and cash equivalents                         $         55    $         --
  Accounts receivable, net                                   134             916
  Inventories                                                  1             488
  Prepaid expenses and other current assets                3,021           2,746
                                                    ------------    ------------
      Total current assets                                 3,211           4,150

Property and equipment, net                               82,960          83,870

Narrowband licenses                                       38,210          38,210

Deferred debt issuance costs, net                          2,355           2,182

Other assets                                               5,731           3,611
                                                    ------------    ------------
      Total assets                                  $    132,467    $    132,023
                                                    ============    ============

LIABILITIES AND STOCKHOLDER'S DEFICIT
Current liabilities:
  Accounts payable                                  $     28,133    $     16,244
  Current maturities of long-term debt                        --             923
  Deferred revenue                                        44,507          55,381
  Other current liabilities                                8,925          10,320
                                                    ------------    ------------
      Total current liabilities                           81,565          82,868

Long-term debt                                           107,947         119,852

Commitments and contingencies

Stockholder's deficit:
  Common stock $.0001 par value per share, 1,000
    shares authorized, 100 issued at December 31,
    1996 and June 30, 1997                                    --              --
  Additional paid-in capital                             124,438         124,438
  Accumulated deficit                                   (181,483)       (195,135)
                                                    ------------    ------------
      Total stockholder's deficit                        (57,045)        (70,697)
                                                    ------------    ------------
      Total liabilities and stockholder's deficit   $    132,467    $    132,023
                                                    ============    ============
</TABLE>


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


                                       3
<PAGE>   4
                        PAGEMART, INC. AND SUBSIDIARIES
                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                             (DOLLARS IN THOUSANDS)
                                  (UNAUDITED)



<TABLE>
<CAPTION>
                                            Three Months             Six Months 
                                           Ended June 30,          Ended June 30,
                                        --------------------    --------------------
                                          1996        1997        1996        1997
                                        --------    --------    --------    --------
<S>                                     <C>         <C>         <C>         <C>      
Revenues:
  Recurring revenue                     $ 36,964    $ 50,006    $ 70,707    $ 96,481
  Equipment sales and activation fees     12,153      15,896      26,955      31,144
                                        --------    --------    --------    --------
      Total revenues                      49,117      65,902      97,662     127,625

Cost of equipment sold                    14,641      20,263      31,723      38,382

Operating expenses:
  Technical                                8,783      11,385      16,873      22,150
  Selling                                 10,464      12,339      19,911      25,005
  General and administrative              13,043      15,814      25,962      31,577
  Depreciation and amortization            4,942       7,240       9,190      14,048
                                        --------    --------    --------    --------
      Total operating expenses            37,232      46,778      71,936      92,780
                                        --------    --------    --------    --------
      Operating loss                      (2,756)     (1,139)     (5,997)     (3,537)

Other (income) expense:
  Interest expense                         4,052       4,238       8,095       8,668
  Interest income                            (41)        (10)       (133)        (39)
  Other                                      554         749         749       1,486
                                        --------    --------    --------    --------
      Total other (income) expense         4,565       4,977       8,711      10,115
                                        --------    --------    --------    --------
Net loss                                $ (7,321)   $ (6,116)   $(14,708)   $(13,652)
                                        ========    ========    ========    ========
</TABLE>






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


                                       4
<PAGE>   5
                        PAGEMART, INC. AND SUBSIDIARIES
                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (DOLLARS IN THOUSANDS)
                                  (UNAUDITED)



<TABLE>
<CAPTION>
                                                                     Six Months 
                                                                    Ended June 30,
                                                                --------------------
                                                                  1996        1997
                                                                --------    --------
<S>                                                             <C>         <C>      
Cash flows from operating activities:
  Net loss                                                      $(14,708)   $(13,652)
  Adjustments to reconcile net loss to
    net cash provided by operating activities
    Depreciation and amortization                                  9,190      14,048
    Provision for bad debt                                         2,777       5,371
    Accretion of discount on senior discount notes                 6,290       7,149
    Amortization of deferred debt issuance costs                     168         173
    Changes in certain assets and liabilities:
      (Increase) decrease in accounts receivable                   4,984      (6,153)
      (Increase) decrease in inventories                           8,987        (487)
      Decrease in prepaid expenses and other current assets          471         275
      (Increase) decrease in other assets                         (1,472)      1,429
      Increase (decrease) in accounts payable                      1,168     (11,889)
      Increase in deferred revenue                                16,399      10,874
      Increase in other current liabilities                          716       1,395
                                                                --------    --------
          Net cash provided by operating activities               34,970       8,533
                                                                --------    --------

Cash flows from investing activities:
  Purchases of property and equipment, net                       (25,915)    (13,501)
  Release of restricted cash                                         500          --
  Other                                                              (89)       (766)
                                                                --------    --------
          Net cash used in investing activities                  (25,504)    (14,267)
                                                                --------    --------

Cash flows from financing activities:
  Borrowings from vendor financing arrangement                        --       5,857
  Payments on vendor financing arrangement                       (15,027)       (178)
                                                                --------    --------
          Net cash provided by (used in) financing activities    (15,027)      5,679
                                                                --------    --------

Net decrease in cash and cash equivalents                         (5,561)        (55)

Cash and cash equivalents, beginning of period                     9,897          55
                                                                --------    --------
Cash and cash equivalents, end of period                        $  4,336    $      0
                                                                ========    ========

Supplemental disclosures of cash flow information:

  Cash paid during the period for:
    Interest                                                    $  1,265    $    209
    Income taxes                                                $     --    $     --
</TABLE>





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


                                       5
<PAGE>   6
                        PAGEMART, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                    THREE AND SIX MONTHS ENDED JUNE 30, 1997

                                  (UNAUDITED)


1. GENERAL

     PageMart, Inc. ("PageMart"), a wholly owned subsidiary of PageMart
Wireless, Inc. ("Wireless"), was incorporated as a Delaware corporation on May
8, 1989 to provide wireless messaging products and services. The consolidated
financial statements of PageMart include the accounts of PageMart II, Inc.,
PageMart Operations, Inc., PageMart of California, Inc., PageMart of Virginia,
Inc. and PageMart International, Inc. Each of these companies is a wholly-owned
subsidiary of PageMart. PageMart II, Inc. and PageMart Operations, Inc. hold
certain Federal Communications Commission ("FCC") licenses. PageMart
International, Inc., which has had no significant operations to date, holds
certain investments in an international venture in Canada. Other than these
licenses and international investments, the subsidiaries of PageMart have no
significant assets or liabilities. PageMart and its subsidiaries are referred
to herein as the "Company."

2. BASIS OF PRESENTATION

     The accompanying unaudited condensed consolidated financial statements
have been prepared by the Company in accordance with generally accepted
accounting principles for interim financial information and are in the form
prescribed by the Securities and Exchange Commission in instructions to Form
10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of
the information and footnotes required by generally accepted accounting
principles for complete financial statements. The interim unaudited financial
statements should be read in conjunction with the audited financial statements
of the Company for the year ended December 31, 1996. In the opinion of
management, all adjustments (consisting only of normal recurring accruals)
considered necessary for a fair presentation have been included. Operating
results for the three and six months ended June 30, 1997 are not necessarily
indicative of the results that may be expected for the year ending December 31,
1997.

     Certain amounts in the prior year condensed consolidated financial
statements have been reclassified to conform with the current year
presentation.

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

     The following is a discussion of the results of operations and financial
condition of the Company for the three and six months ended June 30, 1997 and
1996. This discussion should be read in conjunction with the Company's
condensed consolidated financial statements and the notes thereto included
elsewhere in this report.

     When used in this discussion, the words 'estimate,' 'project,' 'plan,'
'expect' and similar expressions are intended to identify forward-looking
statements. Such statements are subject to certain risks and uncertainties that
could cause actual results to differ materially from those projected. Readers
are cautioned not to place undue reliance on these forward-looking statements,
which reflect management's judgment only as of the date hereof.

GENERAL

     The Company has constructed and operates a wireless messaging and
communications network and provides paging and other one-way wireless messaging
services to its subscribers. In addition, the Company sells and distributes
wireless messaging equipment to subscribers, retailers and resellers. The
Company earns recurring revenues from each subscriber in the form of fixed
periodic fees and incurs substantial operating expenses in offering its
services, including technical, customer service and general and administrative
expenses. See "Management's Presentation of Results of Operations."




                                       6
<PAGE>   7

     Since commencing operations in 1990, the Company has invested heavily in
its one-way wireless communications network and administrative infrastructure
in order to establish nationwide coverage, sales offices in major metropolitan
areas, customer service call centers and centralized administrative support
functions. The Company incurs substantial fixed operating costs related to its
one-way wireless communications infrastructure, which is designed to serve a
larger subscriber base than the Company currently serves in order to
accommodate growth. In addition, the Company incurs substantial costs
associated with new subscriber additions. As a result, the Company has
generated significant net operating losses for each year of its operations. See
"Management's Presentation of Results of Operations."

     The Company's strategy is to expand its subscriber base and to increase
profitability and cash flow through greater utilization of its nationwide
wireless communications network. From June 30, 1996 to June 30, 1997, the
number of domestic units in service increased from 1,524,297 to 2,181,775. None
of the Company's growth is attributable to acquisitions. Given its growth
strategy and the substantial associated selling and marketing expenses, the
Company expects to continue to generate operating losses in 1997 from its
one-way wireless communications business. The Company's ability to generate
operating income is primarily dependent on its ability to attain a sufficiently
large installed subscriber base that generates recurring revenues which offsets
the fixed operating costs of its wireless networks, administration and selling
and marketing expenses. The Company intends to achieve this growth by promoting
its customized paging and other wireless messaging services through its
national sales offices, retail distribution channels, private brand strategic
alliances with GTE Corporation, Southwestern Bell Mobile Systems, AT&T Wireless
Services, Ameritech Mobile Services, Inc. and long distance reseller EXCEL
Communications, Inc., and international expansion.

     Unlike most other paging carriers, the Company sells, rather than leases,
substantially all of the messaging equipment used by its subscribers. As a
result, the Company has much less capital invested in messaging equipment than
other paging carriers since it recoups a substantial portion of messaging
equipment costs upon sale to retailers and subscribers. This results in
significantly lower capital expenditures and depreciation expense than if the
Company leased such equipment to its subscribers. In addition, the Company's
financial results are much different from those of other paging carriers that
lease messaging equipment to subscribers because the Company recognizes the
cost of messaging equipment sold in connection with adding new subscribers at
the time of sale rather than capitalizing and depreciating the cost of
messaging equipment over periods ranging from three to five years as occurs
with paging carriers that lease messaging equipment to subscribers. In
addition, the Company's retail distribution strategy results in the recognition
of expenses associated with messaging equipment sales and other sales and
marketing expenses in advance of new subscribers being added to the base and
generating revenues (as retailers carry inventory).

     The Company sells its messaging equipment through multiple distribution
channels, including direct sales, third-party resellers, private brand
strategic alliances and local and national retail stores. Selling and marketing
expenses are primarily attributable to compensation paid to the Company's sales
force, advertising and marketing costs and to losses resulting from the fact
that, for competitive and marketing reasons, the Company generally sells each
new unit for less than its acquisition cost. The Company's accounting practices
result in selling and marketing expenses, including loss on sale of equipment,
being recorded at the time a unit is sold. Units sold by the Company during a
given month may exceed units activated and in service due to inventory stocking
by and distribution strategies of national retailers. As a result, selling and
marketing expenses per net subscriber addition may fluctuate from period to
period.

     The Company derives its recurring revenue primarily from fixed periodic
fees for services that are not generally dependent on usage. Consequently, the
Company's ability to recoup its initial selling and marketing costs, to meet
operating expenses and to achieve profitability is dependent on the average
length of each customer's subscription period. As long as a subscriber
continues to utilize the Company's service, operating results benefit from the
recurring payments of the fixed fees without the incurrence of additional
selling expenses by the Company. Conversely, operating results are adversely
affected by customer disconnections. Each month a percentage of the Company's
existing customers have their service terminated for a variety of reasons,
including failure to pay, dissatisfaction with service and switching to a
competing service provider. The Company's average monthly disconnection rates
for the years ended December 31, 1994, 1995, 1996 and for the six months ended
June 30, 1997


                                       7
<PAGE>   8

were 3.4%, 2.5%, 2.4% and 2.4%, respectively.

     Approximately 90% of the Company's average monthly revenue per unit
("ARPU") is attributable to fixed fees for airtime, coverage options and
features. A portion of the remainder of additional ARPU is dependent on usage.

RESULTS OF OPERATIONS

     The Company's principal operations to date are its domestic one-way
wireless messaging division. The following discussion of results of operations
analyzes the results of the Company's one-way wireless messaging operations,
unless otherwise indicated.

     Certain of the following financial information is presented on a per unit
basis. Management believes that such a presentation is useful in understanding
the Company's results because it is a meaningful comparison period to period
given the Company's growth rate and the significant differences in the number
of subscribers of other paging companies.

THREE AND SIX MONTHS ENDED JUNE 30, 1996 AND 1997

Units in Service

     Units in service from domestic operations were 1,524,297 and 2,181,775 as
of June 30, 1996 and 1997, respectively, representing an annual growth rate of
43%. In addition, for the three and six months ended June 30, 1997, PageMart
Canada Limited ("PageMart Canada") added 5,629 and 11,721 subscribers,
respectively. As a result of its ownership interest in PageMart Canada, the
Company's proportional share of net subscriber additions from PageMart Canada
was 3,378 and 7,033 units for the three and six months ended June 30, 1997,
respectively. The Company has experienced strong growth in units in service due
primarily to the success of its sales and marketing strategies in the national
retail, private brand strategic alliance and direct sales programs.

Revenues

     Revenues for the three and six months ended June 30, 1997 were $65.9
million and $127.5 million, respectively, compared to $49.1 million and $97.7
million for the three and six months ended June 30, 1996. Recurring revenues
for airtime, voice mail and other services for the three and six months ended
June 30, 1997 were $50.0 million and $96.5 million, respectively, compared to
$37.0 million and $70.7 million for the comparable periods ended June 30, 1996.
Revenues from equipment sales and activation fees for the three and six months
ended June 30, 1997 were $15.9 million and $31.1 million, respectively,
compared to $12.2 million and $27.0 million for the comparable periods ended
June 30, 1996. The increases in recurring revenues and revenues from equipment
sales and activation fees were primarily due to the rapid growth in the number
of units in service. The increase in equipment sales during the second quarter
of 1997 was somewhat offset by a decline in the average price per unit sold.
The Company expects equipment prices per unit generally to remain constant or
decline only slightly as sales volumes increase.

     The Company's ARPU was $8.50 and $7.97 in the second quarter of 1996 and
1997, respectively. Over the past year, the Company's ARPU has decreased
primarily as a result of an increase in subscribers added through the private
brand strategic alliance channel. This decrease in ARPU has been offset
somewhat by a higher mix of multi-city, regional and nationwide services as
well as increased sales of other value-added services such as voice mail and
toll-free numbers. Management anticipates that the Company's ARPU will decline
in the foreseeable future due to a continued higher mix of subscribers added
through private brand strategic alliance programs, which yield lower ARPU. ARPU
is lower for subscribers added through private brand strategic alliances
because these are generally high volume customers that are charged wholesale
airtime rates. However, because private brand strategic alliance partners are
responsible for selling and marketing costs, billing, collection and other
administrative costs associated with end-users, the Company incurs
substantially lower marketing and administrative costs with respect to such
subscribers.




                                       8
<PAGE>   9

Cost of Equipment Sold

     The cost of equipment sold for the three and six months ended June 30,
1997 was $20.2 million and $38.3 million, respectively, compared to $14.6
million and $31.7 million for the comparable periods ended June 30, 1996. The
change in 1997 was primarily due to an increase in the number of units sold.
The Company expects pager costs generally to remain constant with modest
reductions in cost to the Company as a result of volume purchases. Management
anticipates that loss on equipment sold will generally remain constant on a per
unit basis for the foreseeable future.

Operating Expenses

     Technical expenses were $11.4 million and $22.2 million for the three and
six months ended June 30, 1997, respectively, compared to $8.8 million and
$16.9 million for the comparable 1996 periods. The increase was primarily due
to increased telecommunications and site expenses associated with servicing the
Company's expanded network and larger subscriber base. On an average monthly
cost per unit in service basis, technical expenses were $2.02 and $1.81 in the
second quarter of 1996 and 1997, respectively, compared to $2.02 and $1.83 for
the six months ended June 30, 1996 and 1997, respectively. The per unit
decrease was the result of increased operating efficiencies and economies of
scale achieved through the growth of the Company's subscriber base.

     Selling expenses for the three and six months ended June 30, 1997 were
$12.2 million and $24.8 million respectively, compared to $10.5 million and
$19.9 million for the three and six months ended June 30, 1996, respectively.
This increase resulted from greater marketing and advertising costs related to
the growth in units sold as well as costs associated with the stocking of
additional retail outlets. The Company added 6,126 retail outlets from June 30,
1996 to June 30, 1997. During the six months ended June 30, 1996 and 1997, the
Company added 284,273 and 330,330 net new domestic units in service,
respectively. Management views the net loss on equipment sold to be a component
of selling and marketing expenses incurred to add new subscribers. See
"Management's Presentation of Results of Operations." Selling and marketing
expenses per net subscriber addition (including loss on equipment sales) were
$85 and $86 for the three and six months ended June 30, 1996, respectively,
compared to $92 and $97 for the three and six months ended June 30, 1997,
respectively. This increase was due to losses recognized on the sale of pagers
due to stocking new retail outlets in the second quarter of 1997. The Company
added 3,024 additional retail outlets in the three months ended June 30,1997,
including additions from RadioShack(R) and Southland (7-Eleven) stores. The
losses on equipment sold are recognized when pagers are shipped to retailers,
usually before the units are placed into service, thus increasing selling
expenses (including loss on the sale of equipment) per net subscriber addition.
During the three and six months ended June 30, 1997, the Company incurred
$150,000 and $244,000 respectively, in selling expenses associated with its
international operations (including loss on sale of equipment).

     General and administrative expenses (including costs associated with
customer service, field administration and corporate headquarters) for the
three and six months ended June 30, 1997 were $15.8 million and $31.6 million,
respectively, compared to $13.0 million and $26.0 million for the comparable
1996 periods. This increase was attributable to the Company's expansion of its
customer service call centers and other administrative capabilities to support
the growing subscriber base which required additional office space,
administrative personnel and customer service representatives. On an average
cost per month per unit in service basis, general and administrative expenses
were $3.00 and $2.52 in the second quarter of 1996 and 1997, respectively, and
$3.13 and $2.61 for the six months ended June 30, 1996 and 1997, respectively.
The per unit decrease was a result of increased operating efficiencies and
economies of scale achieved through the growth of the Company's subscriber
base.

     Depreciation and amortization for the three and six months ended June 30,
1997 were $7.2 million and $14.0 million, respectively, compared to $4.9
million and $9.2 million for the comparable periods ended June 30, 1996. The
increase resulted from the expansion of the Company's network infrastructure
including transmitter and terminal equipment, as well as the purchase and
development of a new centralized administrative system in 1996 and the first
six months of 1997. As an average cost per month per unit in service,
depreciation and amortization were $1.14 and $1.15 in the second quarter of
1996 and 1997, respectively, and were $1.11 and $1.16 for the six months ended
June 30, 1996 and 1997, respectively.




                                       9
<PAGE>   10

Interest Expense

     Interest expense for the three and six months ended June 30, 1997 was $4.2
million and $8.7 million, respectively, compared to $4.1 million and $8.1
million for the comparable periods ended June 30, 1996. The increase in 1997
was primarily the result of increased interest expense related to the 12 1/4%
Senior Discount Notes due 2003 issued by the Company in October 1993 (the "12
1/4% Notes"). Interest expense related to the 12 1/4% Notes was $3.3 million
and $3.7 million for the three months ended June 30, 1996 and 1997,
respectively, and was $6.5 million and $7.3 million for the six months ended
June 30, 1996 and 1997, respectively.

Net Loss

     The Company sustained net losses for the three and six months ended June
30, 1997 of $6.1 million and $13.7 million, respectively, compared to $7.3
million and $14.7 million for the three and six months ended June 30, 1996,
respectively, principally due to the cost of funding the growth rate of the
Company's subscriber base which resulted in an increase in units sold, selling
and marketing expenses, operating expenses and interest expense.




                                      10
<PAGE>   11

MANAGEMENT'S PRESENTATION OF RESULTS OF OPERATIONS

Comparison with GAAP Presentation

     The Company's unaudited condensed consolidated financial statements for
the three and six months ended June 30, 1996 and 1997 included elsewhere in
this report, have been prepared in accordance with generally accepted
accounting principles ("GAAP"). For internal management purposes, the Company
prepares statements of operations that are derived from the Company's GAAP
financial statements but are reordered in a format that management uses for its
internal review of the Company's performance and that management believes is
useful in understanding the Company's results.

     Management believes that operating profit before selling expenses is a
meaningful indicator of the profitability of the Company's installed base of
units in service because it measures the recurring revenues received for
services less the costs (including depreciation and amortization) associated
with servicing that installed base. Operating profit before selling expenses
per subscriber per month for the Company's one-way operations has grown from
$1.66 during the third quarter of 1995 to $2.48 during the second quarter of
1997 due primarily to the Company's increase in subscribers and resulting
benefits in economies of scale.

     In addition, selling and marketing expenses (including loss on equipment
sold) provide a measure of the costs associated with obtaining new subscribers
that the Company needs to generate the incremental recurring revenue necessary
to achieve profitability. Under the GAAP presentation, recurring revenues and
equipment and activation revenues are aggregated and are not separately
compared to the costs associated with each.

     The items included in Management's Presentation of the Results of
Operations and their derivation from financial information presented in
accordance with GAAP are described below.

     Recurring Revenues. Recurring revenues include periodic fees for airtime,
     voice mail, customized coverage options, toll-free numbers, excess usage
     fees and other recurring revenues and fees associated with the subscriber
     base. Recurring revenues do not include equipment sales revenues or
     initial activation fees. Recurring revenues are the same under both the
     management and GAAP presentations.

     Technical Expenses. This item is the same under the management and GAAP
     presentations.

     General and Administrative Expenses. This item is the same under the
     management and GAAP presentations.

     Depreciation and Amortization. This item is the same under the management
     and GAAP presentations.

     Operating Profit Before Selling Expenses. Operating profit before selling
     expenses under the management presentation is equal to recurring revenues
     less technical expenses, general and administrative expenses and
     depreciation and amortization. Operating profit before selling expenses is
     not derived pursuant to GAAP.

     Selling Expenses. Selling expenses under the management presentation
     represent the cost to the Company of selling pagers and other messaging
     units to a customer, and are equal to selling costs (sales compensation,
     advertising, marketing, etc.) plus costs of units sold less revenues from
     equipment sales and activation fees. As described above, the Company sells
     rather than leases substantially all of the one-way messaging equipment
     used by subscribers. Selling expenses under the management presentation
     are not derived pursuant to GAAP. Net loss on equipment sales is not
     included in the GAAP presentation of selling expenses.

     Operating Income (Loss). This item is the same under the management and
     GAAP presentations.

     EBITDA. EBITDA represents earnings (loss) before interest, taxes,
     depreciation and amortization. EBITDA is a financial measure commonly used
     in the paging industry. EBITDA is not derived pursuant to GAAP and
     therefore should not be construed as an alternative to operating income,
     as an alternative to cash flows from operating activities (as determined
     in accordance with GAAP) or as a measure of liquidity. The calculation of
     EBITDA does not include the commitments of the Company for capital
     expenditures and payment of debt and should not be deemed to represent
     funds available to the Company. In the fourth quarter of 1995, the
     Company's EBITDA from its one-way operations became positive for the first
     time.



                                      11
<PAGE>   12

Selected Quarterly Results of Operations

     The table below sets forth management's presentation of results of one-way
domestic operations and other data on a quarterly basis for the eight most
recent fiscal quarters. This presentation should be read in conjunction with
the condensed consolidated financial statements of the Company and the notes
thereto included elsewhere in this report and the Company's quarterly reports
on Form 10-Q for the corresponding periods below, and should not be considered
in isolation or as an alternative to results of operations that are presented
in accordance with GAAP (in thousands, except other data).

<TABLE>
<CAPTION>
                                                                 THREE MONTHS ENDED
                             -----------------------------------------------------------------------------------------------------
                              SEPT. 30,    DEC. 31,     MARCH 31,    JUNE 30,     SEPT. 30,    DEC. 31,     MARCH 31,    JUNE 30,
                                1995         1995         1996         1996         1996         1996         1997         1997
                             ----------   ----------   ----------   ----------   ----------   ----------   ----------   ----------
                                                                    (UNAUDITED)
<S>                          <C>          <C>          <C>          <C>          <C>          <C>          <C>          <C>
OPERATING DATA:
Recurring revenues           $   26,994   $   30,658   $   33,743   $   36,964   $   39,697   $   42,637   $   46,475   $   50,004
Technical expenses                6,842        7,015        7,943        8,783        9,725       10,273       10,765       11,385
General and
  administrative expenses        11,350       12,243       12,792       13,043       13,668       14,162       15,763       15,814
Depreciation and
  amortization                    3,469        3,910        4,248        4,942        5,714        6,288        6,808        7,240
                             ----------   ----------   ----------   ----------   ----------   ----------   ----------   ----------
Operating profit before
  selling expenses                5,333        7,490        8,760       10,196       10,590       11,914       13,139       15,565
Selling expenses (1)             10,889       11,181       11,601       12,836       13,588       14,900       15,443       16,556
                             ----------   ----------   ----------   ----------   ----------   ----------   ----------   ----------
Operating income (loss)      $   (5,556)  $   (3,691)  $   (2,841)  $   (2,640)  $   (2,998)  $   (2,986)  $   (2,304)  $     (991)
                             ==========   ==========   ==========   ==========   ==========   ==========   ==========   ==========

EBITDA                       $   (2,087)  $      219   $    1,407   $    2,302   $    2,716   $    3,302   $    4,504   $    6,249
                             ==========   ==========   ==========   ==========   ==========   ==========   ==========   ==========

OTHER DATA:
Units in service (2)          1,131,464    1,240,024    1,374,146    1,524,297    1,684,937    1,851,445    2,001,525    2,181,775
Net subscriber additions        122,781      108,560      134,122      150,151      160,640      166,508      150,080      180,250
ARPU (3)                     $     8.41   $     8.62   $     8.61   $     8.50   $     8.25   $     8.04   $     8.04   $     7.97
National retail outlets           3,408        3,411        3,690        4,286        5,025        5,530        7,388       10,412

Operating profit before
  selling expenses per
  subscriber per month (4)   $     1.66   $     2.11   $     2.23   $     2.35   $     2.20   $     2.25   $     2.27   $     2.48
Selling expenses per net
  subscriber addition (1)(5) $       89   $      103   $       86   $       85   $       85   $       89   $      103   $       92
</TABLE>

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

(1)  Includes loss on sale of equipment.

(2)  Stated as of the end of each period.

(3)  Calculated by dividing recurring revenues for the quarter by the average
     number of units in service during that quarter. Stated as the monthly
     average for the quarter.

(4)  Calculated by dividing operating profit before selling expenses (selling
     expenses include loss on sale of equipment) for the quarter by the average
     number of units in service during that quarter. Stated as the monthly
     average for the quarter.

(5)  Calculated by dividing selling expenses, including loss on sale of
     equipment, for the quarter by the net subscriber additions for the
     quarter.





                                      12
<PAGE>   13




     This Form 10-Q contains statements that constitute forward-looking
statements. Readers are cautioned that such forward-looking statements involve
risk and uncertainties, and are subject to change based on various important
factors. The following factors, among others, in some cases have affected and
in the future could affect the Company's financial performance and actual
results, and could cause actual results for 1997 and beyond to differ
materially from those expressed in any such forward-looking statements --
economic conditions generally in the United States and consumer confidence; the
ability of the Company to manage its debt levels; the impact of technological
change in the telecommunications industry; the future cost of network
infrastructure and subscriber equipment; the impact of competition and pricing
of paging and wireless services; the timely development and acceptance of new
products; changes in regulation by the Federal Communications Commission and
various state regulatory agencies and the ability of the Company to obtain
financing to construct, operate and market the transmission network for two-way
services.





                                      13
<PAGE>   14
                           PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

     The Company is involved in various lawsuits arising in the normal course
of business. In management's opinion, the ultimate outcome of these lawsuits
will not have a material adverse effect on the Company's financial position or
results of operations.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a)  Exhibits

          The exhibits listed on the accompanying index to exhibits are filed
          as a part of this quarterly report.

(b)  Reports on Form 8-K

          None.





                                      14
<PAGE>   15

                                   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.


                                        PAGEMART, INC.


                                        /s/ JOHN D. BELETIC
                                        ------------------------------------
                                        John D. Beletic
August 13, 1997                         Chairman, President and
                                        Chief Executive Officer


                                        /s/ G. CLAY MYERS
                                        ------------------------------------
                                        G. Clay Myers
August 13, 1997                         Vice President, Finance,
                                        Chief Financial Officer and
                                        Treasurer (principal financial
                                        and chief accounting officer)





                                      15
<PAGE>   16

                                 EXHIBIT INDEX


<TABLE>
<CAPTION>
EXHIBIT NO.   DESCRIPTION
-----------   -----------
<S>           <C>
10.1*         Purchase Financing Agreement dated March 21, 1997 between
              PageMart, Inc. and Glenayre Electronics, Inc.

27.1*         Financial Data Schedule.
</TABLE>


*    Filed herewith.