The storage industry includes two primary segments: fixed-site self-storage and portable storage. Whereas fixed-site self-storage is used primarily by individuals for the temporary storage of household items at a permanent facility, portable storage brings secure, temporary storage to a customer’s location and is used primarily by businesses.

Portable storage offers its users a flexible, cost-effective and convenient alternative to permanent warehouse space and fixed-site self-storage. During periods of increased business activity, portable storage offers additional space for storage of higher levels of inventory, equipment or other goods. During periods of economic contraction portable storage provides companies with a way to address storage needs while controlling capital expenditures and operating costs. Growth of the portable storage market is being driven primarily by trends towards outsourcing of non-core business functions, reduction of investment in non-core assets and continuing implementation of just-in-time inventory management.

The portable storage industry is highly fragmented and remains mostly local in nature. It is estimated that there are over 2,000 local and regional portable storage rental companies in the U.S. and over 300 such companies in the U.K. Most of these are family-run operations with fleet sizes of 500 units or fewer. It is believed that a local presence is critical as decisions to use portable storage have historically been made at the local level based on personal relationships, customer service, delivery speed and price.

The Company’s storage containers vary in size from 10 feet to 40 feet in length, with 20-foot and 40-foot length containers being the most common. The Company’s standard storage containers are eight feet wide and eight and one-half feet high. The Company has also complemented its mix of storage containers with 24-foot length containers and Tunnel-Tainers, a 40-foot long, steel container with swing doors on each end for easy accessibility.

The Company’s storage trailers are cartage trailers that are no longer used for transportation and are similar to its storage containers, except that storage trailers are raised off of the ground. The Company generally offers storage trailers in lengths of 28 feet to 45 feet.

The Company purchases new and used containers of varying sizes, which it then modifies, repairs, if necessary, paints and converts into portable office units for rent. The Company also purchases pre-built modular offices, which require little or no modification, for rent as portable office units. These office units range from 10 feet to 60 feet in length, and most include air conditioning and heating, phone jacks, tiled floors, secure doors, windows and electrical wiring.

The Company’s fleet of cartage trailers is comprised of new and used over-the-road trailers of varying sizes, ranging from 28 feet to 53 feet in length, with 45-foot and 48-foot length trailers being the most common. Unlike storage units, the Company’s customers use cartage trailers to transport cargo. The Company’s cartage trailers are fully licensed by appropriate authorities.

To complement its core rental business, the Company sells equipment to both rental and non-rental customers. The equipment is refurbished, if required, and modified according to customer specifications.

Although the majority of the Company’s equipment sales involve little or no modification, modifying or customizing units for sale represents a growing share of its equipment sale business. Modifications requested by the Company’s customers range from simple installation of shelves to more substantive conversions of units into finished, portable, insulated, air-conditioned office units, typically for use at construction sites and by governmental agencies.

Cost of sales increased by $12.5 million, or 72%, to $29.8 million for the year ended December 31, 2001 from $17.3 million for the year ended December 31, 2000.

Trucking and yard costs increased by $4.5 million, or 30.8%, to $19.3 million for the year ended December 31, 2001 from $14.7 million for the year ended December 31, 2000.

Depreciation and amortization expenses increased by $1.4 million, or 16.7%, to $9.5 million for the year ended December 31, 2001 from $8.1 million for the year ended December 31, 2000.

Net income for the year ended December 31, 2001 was $9.8 million, compared with net loss for the year ended December 31, 2000 of $0.3 million.