The U.S. construction equipment distribution industry is fragmented and consists mainly of a small number of multi-location regional or national operators and a large number of relatively small, independent businesses serving discrete local markets. Construction equipment is largely distributed to end users through two channels: equipment rental companies and equipment dealers.

The business is driven by a broad range of economic factors including total U.S. non-residential construction trends, construction machinery demand, and demand for rental equipment. Current trends in non-residential construction spending support a positive outlook for demand for construction equipment.

According to the annual rates published by the U.S. Census Bureau, between 1993 and 2000, private non-residential construction spending (as measured by the value of construction work done on projects underway during the period) grew at a compound annual growth rate of approximately 9.1%. From 2001 to 2004, spending levels declined and slowed dramatically in line with the slowdown of the general industrial economy, and in 2004 spending increased by approximately 4.2% over the prior year. Increased non-residential construction spending has contributed to increased demand for construction machinery. According to a December 2004 issue of Machinery Outlook published by Manfredi & Associates, a leading industry consultant, U.S. consumption of construction machinery is expected to grow to approximately 184,00 units in 2005, representing a 6.6% increase over 2004. This increase continues the strong recovery seen in 2004 (24.4% growth) and in 2003 (9.2% growth) following the downturn that began in 2000.

Equipment rental demand is also affected by non- residential construction spending as well as by general economic conditions. During the industrial downturn in the early 2000s, rental equipment operators rationalized excess capacity that had been built up during the 1990s, resulting in improved equipment rental rates as the markets recovered beginning in 2004. Between 1990 and 2004, Manfredi & Associates reports that the U.S. construction equipment rental industry grew from approximately $6.6 billion to a forecasted $26.4 billion. Growth is expected to remain strong in 2005.

The Company sells used equipment primarily from its rental fleet, as well as inventoried equipment that it acquires through trade-ins from its equipment customers and selective purchases of high-quality used equipment. The Company sells used equipment through its retail sales force and it does not rely on auction houses or other wholesale channels for disposition like many of its competitors.

The Company sells new and used parts to customers and also provides parts to its own rental fleet. The Company sells a range of maintenance and replacement parts from original equipment manufacturers on equipment it sells, as well as for makes of equipment that it does not sell or rent. The Company maintains an extensive in-house parts inventory in order to provide timely parts and service support to its customers as well as to its own rental fleet. The Company generally is able to acquire non-stock or out-of-stock parts directly from manufacturers within one to two business days. The Company’s product support sales representatives are specialists by equipment type. Its parts sales provide the Company with a relatively stable revenue stream that is less sensitive to economic cycles than its rental and equipment sales operations.

The Company provides maintenance and repair services for its customers’ owned equipment and to its own rental fleet. In addition to repair and maintenance on an as-needed or scheduled basis, the Company provides ongoing preventative maintenance services and warranty repairs for its customers. The Company has approximately 521 technicians and over 600 field service and delivery trucks.

In addition to its principal business activities the Company provides ancillary equipment support activities including transportation, hauling, parts shipping and loss damage waivers. The Company has specialized information systems that track, rental inventory utilization statistics, maintenance and repair costs, returns on investment for specific equipment types and detailed operational and financial information for each piece of equipment.

Revenues from equipment rentals for the six months ended June 30, 2005 increased $11.6 million, or 15.5%, to $86.2 million from $74.6 million for the six months ended June 30, 2004.

New equipment sales for the six months ended June 30, 2005 increased $11.9 million, or 23.0%, to $63.7 million from $51.8 million for the six months ended June 30, 2004.

Total gross profit for the six months ended June 30, 2005 was $78.9 million compared to $53.7 million, a $25.2 million, or 46.9% increase for the six months ended June 30, 2004.

Selling, general and administrative expenses for the six months ended June 30, 2005 increased $4.7 million, or 9.7%, to $53.1 million from $48.4 million for the six months ended June 30, 2004.