The laundry equipment services industry is characterized by stable operating cash flows generated by long-term, renewable lease contracts with multi-family housing property owners and management companies. Based upon industry estimates, it is believed there are approximately 3.5 million installed machines in multi-family properties throughout the United States, approximately 2.4 million of which have been outsourced to independent operators and approximately 1.1 million of which continue to be operated by the owners of such locations, which are referred to as owner operators.

The industry’s consistent revenue and operating cash flows are primarily due to the long-term nature of location leases and the stable demand for laundry services. When new or renewal leases are signed, industry participants incur initial costs including the cost of washers and dryers, laundry room leasehold improvements and, at times, advance location payments. Property owners and landlords are typically responsible for utilities. Moreover, as the useful life of laundry equipment typically extends throughout the term of the contract pursuant to which it is installed, incremental capital requirements including working capital to service such contracts are not significant. Hence, the industry’s operating cash flows and capital requirements are predictable.

Historically, the industry has been characterized by stable demand and has generally been resistant to changing market conditions and economic cycles. While the industry is affected by changes in occupancy rates of residential units, the effect of such changes is limited as laundry services are a necessity for tenants.

The Company markets its products and services through a sales staff with an average industry experience of over ten years. The principal responsibility of the sales staff is to solicit customers and negotiate lease arrangements with building owners and managers.

The Company’s leases provide the Company the exclusive right to operate and service the installed laundry machines, including repairs, revenue collection and maintenance. The Company typically sets pricing for the use of the machines on location, and the property owner or property manager maintains the premises and provides utilities such as gas, electricity and water.

The Company’s integrated computer systems allow for the quick dispatch of service technicians in response to both computer-generated and customer-generated service calls. The Company’s integrated computer systems serve three major functions: tracking the service cycle of equipment monitoring revenues and costs by location, customer and salesperson and providing information on competitors’ and the Company’s lease renewal schedules.

The Company rebuilds and reinstalls a portion of its machines at approximately one-third the cost of acquiring new machines, providing cost savings. Remanufactured machines are restored to virtually new condition with the same estimated average life and service requirements as new machines.

The Company provides the highest level of security for revenue collection control in the laundry equipment services industry. The Company utilizes numerous precautionary procedures with respect to cash collection, including frequent alteration of collection patterns and extensive monitoring of collections and personnel.

Laundry operating expenses increased by approximately $0.7 million or less than 1% for the nine months ended December 31, 2003, as compared to the prior year’s corresponding period.

General and administrative expenses decreased by approximately 1% for the nine-month period ended December 31, 2003, as compared to the prior year’s corresponding period.

Depreciation and amortization expense increased by approximately 4% for the nine-month period ended December 31, 2003, as compared to the prior year’s corresponding period.