UNITED STATES
SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q* |_|  
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT                     OF 1934 For the quarterly
period ended September 30, 2004 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 number
  333-56857        
             
              
         
333-56857-01          
             
              
       
333-56857-02 ALLIANCE LAUNDRY
SYSTEMS LLC ALLIANCE LAUNDRY CORPORATION ALLIANCE LAUNDRY HOLDINGS LLC (EXACT NAME OF
REGISTRANT AS SPECIFIED IN ITS CHARTER) DELAWARE
DELAWARE
DELAWARE
(STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION)
39-1927923
39-1928505
52-2055893
(I.R.S. EMPLOYER IDENTIFICATION NO.)  P.O. BOX 990
RIPON, WISCONSIN 54971-0990 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (920) 748-3121
(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
(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 |_|      No |_| Indicate
by check mark whether the registrant is an accelerated filer as defined in Rule 12b-2 of
the Exchange Act of 1934:  Yes |_|     No |_| * This report is being filed pursuant
to requirements contained in the indenture governing the registrants Senior
Subordinated Notes and not as required under Section 13 or 15(d) of the Securities
Exchange Act of 1934.   Alliance Laundry
Holdings LLC Form 10-Q For The Period Ended September 30, 2004 Table of Contents Page No.PART
      I
    
    Financial
      InformationItem
      1.
    
    Financial
      StatementsConsolidated
      Balance Sheets as of September 30, 2004 and December 31, 2003
    
    3Consolidated
      Statements of Income for the periods ended September 30, 2004 and
      September 30, 2003
    
    4Consolidated
      Statements of Cash Flows for the periods ended September 30, 2004 and
      September 30, 2003
    
    5Notes
      to Unaudited Consolidated Financial Statements
    
    6Item
      2.
    
    Managements
      Discussion and Analysis of Financial Condition and Results of Operations
    
    13Item
      3.
    
    Quantitative
      and Qualitative Disclosure About Market Risk
    
    20Item
      4.
    
    Controls
      and Procedures
    
    21PART
      II
    
    Other
      InformationItem
      1.
    
    Legal
      Proceedings
    
    22Item
      2.
    
    Unregistered
      Sales of Equity Securities and Use of Proceeds
    
    22Item
      3.
    
    Defaults
      upon Senior Securities
    
    22Item
      4.
    
    Submission
      of Matters to a Vote of Security Holders
    
    22Item
      5.
    
    Other
      Information
    
    22Item
      6.
    
    Exhibits
      and Reports on Form 8-K
    
    22Signatures
    
    
    
    23  2    PART I
FINANCIAL INFORMATION   ITEM 1.
FINANCIAL STATEMENTS.   ALLIANCE LAUNDRY
HOLDINGS LLCCONSOLIDATED BALANCE SHEETS (unaudited)(in thousands) September
      30,
      2004
    
    December 31,
      2003AssetsCurrent assets:Cash
    
    
    $
    8,834
    
    $       7,937Accounts
      receivable, net
    
    
    
    8,954
    
    9,157Inventories,
      net
    
    
    
    28,963
    
    26,215Beneficial
      interests in securitized accounts receivable
    
    
    
    17,352
    
    16,789Prepaid
      expenses and other
    
    
    
    958
    
    898Total
      current assets
    
    
    
    65,061
    
    60,996Notes
      receivable, net
    
    
    
    5,952
    
    8,161Property,
      plant and equipment, net
    
    
    
    30,946
    
    34,035Goodwill,
      net
    
    
    
    55,414
    
    55,414Beneficial
      interests in securitized financial assets
    
    
    
    19,750
    
    22,676Debt
      issuance costs, net
    
    
    
    6,208
    
    7,636Other assets
    
    
    
    4,978
    
    1,721Total
      assets
    
    
    $
    188,309
    
    $       190,639Liabilities
      and Members DeficitCurrent liabilities:Current
      portion of long-term debt
    
    
    $
    12,305
    
    $      11,270Revolving
      credit facility
    
    
    
    
    
    Accounts
      payable
    
    
    
    11,820
    
    11,279Other
      current liabilities
    
    
    
    21,404
    
    20,428Total
      current liabilities
    
    
    
    45,529
    
    42,977Long-term
      debt:Senior
      credit facility
    
    
    
    123,947
    
    145,975Senior
      subordinated notes
    
    
    
    110,000
    
    110,000Junior
      subordinated note
    
    
    
    27,551
    
    24,171Other
      long-term debt
    
    
    
    593
    
    783Other long-term
      liabilities
    
    
    
    6,899
    
    6,491Mandatorily
      redeemable preferred interests
    
    
    
    6,000
    
    Total
      liabilities
    
    
    
    320,519
    
    330,397Commitments
      and contingencies (see Note 3)Mandatorily
      redeemable preferred interests
    
    
    
    
    
    6,000Members
      deficit
    
    
    
    (132,210
    )
    (145,758
    )Total
      liabilities and members deficit
    
    
    $
    188,309
    
    $       190,639  The accompanying notes
are an integral part of the financial statements. 3    ALLIANCE LAUNDRY
HOLDINGS LLCCONSOLIDATED STATEMENTS OF INCOME(unaudited)(in
thousands) Three Months
      Ended
    
    Nine
      Months EndedSeptember
      30,
      2004
    
    September
      30,
      2003
    
    September
      30,
      2004
    
    September
      30,
      2003Net
      revenues:Commercial
      laundry
    
    
    $
    55,805
    
    $
    56,991
    
    $
    176,023
    
    $
    170,462Service
      parts
    
    
    
    9,341
    
    
    9,449
    
    
    28,773
    
    
    28,08865,146
    
    
    66,440
    
    
    204,796
    
    
    198,550Cost
      of sales
    
    
    
    47,001
    
    
    46,918
    
    
    144,761
    
    
    141,152Gross
      profit
    
    
    
    18,145
    
    
    19,522
    
    
    60,035
    
    
    57,398Selling,
      general and administrative expense
    
    
    
    8,269
    
    
    8,521
    
    
    25,995
    
    
    24,920Offering
      related expenses
    
    
    
    30
    
    
    
    
    
    1,298
    
    
    Total
      operating expense
    
    
    
    8,299
    
    
    8,521
    
    
    27,293
    
    
    24,920Operating
      income
    
    
    
    9,846
    
    
    11,001
    
    
    32,742
    
    
    32,478Interest
      expense
    
    
    
    6,849
    
    
    6,523
    
    
    19,219
    
    
    21,928Other (income)
      expense, net
    
    
    
    (52
    )
    
    1
    
    
    
    
    
    798Income
      before taxes
    
    
    
    3,049
    
    
    4,477
    
    
    13,523
    
    
    9,752Provision
      for income taxes
    
    
    
    10
    
    
    7
    
    
    64
    
    
    50Net
      income
    
    
    $
    3,039
    
    $
    4,470
    
    $
    13,459
    
    $
    9,702  The accompanying notes
are an integral part of the financial statements. 4    ALLIANCE LAUNDRY
HOLDINGS LLCCONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)(in thousands) Nine Months
      EndedSeptember
      30,
      2004
    
    September
      30,
      2003Cash
      flows from operating activities:Net
      income
    
    $
    13,459
    
    $
    9,702Adjustments
      to reconcile net income to net cash 
         provided
      by operating activities:Depreciation
      and amortization
    
    
    7,585
    
    
    8,264Non-cash
      interest
    
    
    3,456
    
    
    4,456Non-cash
      incentive unit compensation
    
    
    540
    
    
    Gain
      on sale of property, plant and equipment
    
    
    
    
    
    (8
    )Changes
      in assets and liabilities:Accounts
      receivable
    
    
    203
    
    
    (1,887
    )Inventories
    
    
    (2,748
    )
    
    (2,152
    )Other
      assets
    
    
    1,722
    
    
    (171
    )Accounts
      payable
    
    
    541
    
    
    (2,980
    )Other
      liabilities
    
    
    1,308
    
    
    3,232Net
      cash provided by operating activities
    
    
    26,066
    
    
    18,456Cash flows
      from investing activities:Additions
      to property, plant and equipment
    
    
    (2,982
    )
    
    (3,145
    )Proceeds
      on disposal of property, plant and equipment
    
    
    67
    
    
    35Net
      cash used in investing activities
    
    
    (2,915
    )
    
    (3,110
    )Cash flows
      from financing activities:Repayment
      of management note
    
    
    
    
    
    32Principal
      payments on long-term debt
    
    
    (21,183
    )
    
    (17,177
    )Cash
      paid for capitalized offering related costs
    
    
    (1,071
    )
    
    Net
      increase in revolving line of credit borrowings
    
    
    
    
    
    Net
      cash used in financing activities
    
    
    (22,254
    )
    
    (17,145
    )Increase
      (decrease) in cash
    
    
    897
    
    
    (1,799
    )Cash at beginning
      of period
    
    
    7,937
    
    
    7,339Cash at end
      of period
    
    $
    8,834
    
    $
    5,540Supplemental
      disclosure of cash flow information:Cash
      paid for interest
    
    $
    14,058
    
    $
    14,083  The accompanying notes
are an integral part of the financial statements. 5    Notes to Unaudited
Consolidated Financial Statements NOTE 1.
BASIS OF PRESENTATION  Throughout
this quarterly report, we refer to Alliance Laundry Holdings LLC, a Delaware limited
liability company, as Alliance Holdings, and, together with its consolidated
operations, as Alliance, we, our, and us,
unless otherwise indicated. Any reference to Alliance Laundry refers to our
wholly-owned subsidiary, Alliance Laundry Systems LLC, a Delaware limited liability
company, and its consolidated operations, unless otherwise indicated. The
unaudited financial statements as of and for the quarter and the nine months ended
September 30, 2004 and 2003, respectively, present the consolidated financial position and
results of operations of Alliance Laundry Holdings LLC, including our wholly-owned direct
and indirect subsidiaries, Alliance Laundry Systems LLC and Alliance Laundry Corporation. In
the opinion of management, the accompanying unaudited interim financial statements contain
all adjustments necessary (consisting only of normal recurring adjustments) to present
fairly our financial position and operating results for the periods presented. The results
of operations for such interim periods are not necessarily indicative of results of
operations to be expected for the full year. These
financial statements have been prepared by us pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and disclosures normally included
in financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such regulations, although we
believe the disclosures provided are adequate to prevent the information presented from
being misleading. Certain
amounts in the prior year financial statements have been reclassified to conform to the
current year presentation. This
report on Form 10-Q for the period ended September 30, 2004 should be read in conjunction
with the audited financial statements presented in our Annual Report on Form 10-K (file
no. 333-56857) filed with the Securities and Exchange Commission, which includes our
audited financial statements as of and for the year ended December 31, 2003. During
January 2003, the Financial Accounting Standards Board, or FASB, issued FIN No. 46,
Consolidation of Variable Interest Entities, which clarifies the consolidation
and disclosure requirements related to variable interests in a variable interest entity. A
variable interest entity is an entity for which control is achieved through means other
than voting rights. In December 2003, the FASB issued a revision to FIN No. 46, which
replaced FIN No. 46. The revised Interpretation (FIN 46-R) was adopted by us
beginning on January 1, 2004 for interests in entities created on or before December 31,
2003 and as of the date we first become involved with a potential variable interest entity
created after December 31, 2003. FIN
46-R provides exceptions from its scope for certain entities, including qualifying
special-purpose securitization entities subject to the reporting requirements of SFAS No.
140 and business entities, as defined, that do not possess certain characteristics. 6   Our
primary variable interests are notes receivable that have not been sold and are comprised
primarily of equipment loans to laundromat operators and other end-users. Excluding notes
awaiting sale, the carrying value of such loans was approximately $4.8 million at
September 30, 2004. If in the future we are required to consolidate a variable interest entity in which
one or both of our SFAS No. 140 qualifying special-purpose entities also holds a variable
interest, the qualifying status of the special-purpose entity with such holdings would be
eliminated. In that instance, we would be required to determine if we are the primary
beneficiary of the affected securitization entity under FIN 46-R and if so, to consolidate
that entity, which would have a material effect on our consolidated financial position,
results of operations and cash flows. During
May 2003, the FASB issued SFAS No. 150, Accounting for Certain Financial Instruments
with Characteristics of both Liabilities and Equity, which establishes standards for
the classification and measurement of certain financial instruments with characteristics
of both liabilities and equity. The FASB has also subsequently issued certain staff
positions that effectively amended SFAS No. 150. The Statement is effective for us
beginning January 1, 2004. As a result of the adoption of SFAS No. 150, as amended, our
mandatorily redeemable preferred interests have been reclassified from mezzanine equity to
the long- term liability section of our consolidated balance sheet (see Note 9). During
December 2003, the FASB revised SFAS No. 132, Employers Disclosures about
Pensions and Other Postretirement Benefits, to require additional disclosures about
the assets, obligations, cash flows, and net periodic benefit cost of defined benefit
pension plans and other defined benefit postretirement plans. These disclosure
requirements were effective for our plans in 2003. This Statement also requires
interim-period disclosures of the components of net periodic benefit cost and, if
significantly different from previously disclosed amounts, the amount of contributions and
projected contributions to fund pension and other postretirement benefit plans. These
interim-period disclosures have been included within our financial statement notes (see
Note 6). On
December 8, 2003, the Medicare Prescription Drug, Improvement and Modernization Act of
2003, or the Medicare Act, was signed into law. The Medicare Act introduces a prescription
drug benefit under Medicare (Medicare Part D) as well as a federal subsidy to sponsors of
retiree health care benefit plans that provide a benefit that is at least actuarially
equivalent to Medicare Part D. Because our postretirement health care plan does not
provide prescription drug benefits beyond age 65 (general eligibility for Medicare Part
D), the Medicare Act will have no effect on our accumulated postretirement
benefit obligations or net periodic postretirement benefit cost. The
FASB is expected to re-expose a proposed statement that would amend and clarify SFAS No.
140 (and related implementation guidance). The proposed statement will address permitted
activities of qualifying special-purpose entities, including the degree of discretion
allowable in determining the terms of beneficial interests issued after inception, and
whether certain transfers can meet the criteria for sale accounting under SFAS No. 140 if
the transferor or any consolidated affiliate provides liquidity support for the
transferees beneficial interests. As the proposed statement has not been issued, we
are unable to determine the effects of the related transition provisions, if any, on our
existing securitization entities. However, in the event that transfers to our existing
asset backed facility would no longer qualify as sales of financial assets in the future,
we may recognize additional costs for a replacement facility or it may have other material
financial statement effects. 7   NOTE 2.
INVENTORIES  Inventories
are stated at cost using the first-in, first-out method but not in excess of net
realizable value, and consist of the following (in thousands): September
      30,
      2004
    
    December 31,
      2003(Unaudited)Materials
      and purchased parts
    
    
    $
    9,528
    
    $
    9,124Work in process
    
    
    
    3,615
    
    
    3,083Finished
      goods
    
    
    
    17,451
    
    
    15,594Less: inventory
      reserves
    
    
    
    (1,631
    )
    
    (1,586
    )$
    28,963
    
    $
    26,215  NOTE 3.
COMMITMENTS AND CONTINGENCIES  Various
claims and legal proceedings generally incidental to the normal course of business are
pending or threatened against us. While we cannot predict the outcome of these matters, in
the opinion of management, any liability arising thereunder will not have a material
adverse effect on our business, financial condition and results of operations after giving
effect to provisions already recorded. In
September 1999, Juan Carlos Lopez pursued an arbitration against Alliance Laundry Sociedad
Anonima, or ALSA, a foreign subsidiary of Alliance Laundry Systems LLC, under UNCITRAL
rules in Buenos Aires, Argentina, seeking in pertinent part, to be paid fees arising from
a consulting agreement, and indemnification for lost profits in Argentina and Brazil, plus
damages for pain and suffering. Because of the risk this lawsuit presented, we entered
into a settlement, release, discharge and indemnification agreement with Mr. Lopez on July
17, 2003. While denying any liability whatsoever, we agreed to and paid Mr. Lopez US
$736,440 on August 6, 2003 and agreed to deliver commercial laundry equipment, free of
charge, up to a cost of US $60,000 to Mr. Lopez in Brazil. In consideration of the
aforementioned payment and delivery of equipment, Mr. Lopez released and forever
discharged, and waived any claims or rights of any nature whatsoever against the Company
and a number of our affiliated subsidiary companies. In addition, Mr. Lopez and his
counsel signed the dismissal of the lawsuit referred to above. A provision for this
settlement was recorded in the second quarter of our 2003 consolidated financial
statements. In
April 2002 we were named as a defendant in a lawsuit filed by Imonex Services, Inc.
for patent infringement arising from a coin selector, the W2000, which was a
vendor-supplied component used in certain of our products. The vendor, W. H.
Münzprüfer Dietmar Trenner GmbH, indemnified us pursuant to an indemnification
agreement and agreed to pay and is paying for our legal representation in this matter.
Imonex accused us, and other Münzprüfer customers, of patent infringement
resulting from the sales of the W2000 within the Münzprüfer customers
products. The trial with respect to this lawsuit commenced on January 6, 2003 in the
United States District Court for the Eastern District of Texas. Following the trial, the
court indicated it would enter an order rendering judgment for Imonex that the patents in
question were infringed, are not invalid, and were procured by inequitable conduct. On
August 1, 2003, the court ruled it will not increase any of the damages awarded by
the jury for willful infringement, but entered judgment for Imonex on the issues of
infringement, and validity of Imonexs patents. Imonex submitted expert reports at
the new trial on damages which attempted to prove actual damages of approximately
$16,267,644 (approximately $6,305,232 against us with the remainder against other
Münzprüfer customers). On August 12, 2003 a preliminary injunction was
issued prohibiting W2000 coin selector usage. 8   The
trial on damages commenced August 18, 2003 and yielded a jury verdict of $1,396,873
to Imonex ($614,662 against us with the remainder against the other Münzprüfer
customers), and final judgment on the August 18, 2003 jury verdict was rendered on
February 9, 2004 against all the Münzprüfer customers. The final judgment
included the $614,662 against us, plus prejudgment interest, yielding $771,728 against us.
In addition, the judgment awarded court costs to Imonex, including attorneys fees.
On February 23, 2004, Imonex submitted an application seeking from all the
Münzprüfer customers a total of $669,107 in attorneys fees and $133,214 in
court costs. The preliminary injunction of August 12, 2003 was made permanent. The
Münzprüfer customers have filed a post judgment motion seeking to have the
judgment amended or set aside. The lawsuit is currently in the appeal process. To-date,
the Court of Appeals for the Federal Circuit has not set a schedule to hear the
parties oral arguments. Our
position remains that any liability related to this lawsuit is properly borne by
Münzprüfer. We believe that Münzprüfer has the ability to fully
satisfy its indemnification obligations up to the amount of the final judgment of the
lawsuit. We have also reached tentative agreement with Münzprüfer as to
acceptable methods of satisfying the provisions of the indemnification agreement, in the
event the judgment is not appealed, or is not overturned upon appeal. In accordance with
generally accepted accounting principles, as a judgment has been rendered by the court, in
the fourth quarter of 2003 we recorded an appropriate payable to Imonex related to our
liability and a corresponding receivable balance from Münzprüfer within our
consolidated financial statements. Environmental, Health and
Safety Matters We
are subject to comprehensive and frequently changing federal, state and local
environmental and occupational health and safety laws and regulations, including laws and
regulations governing emissions of air pollutants, discharges of waste and storm water and
the disposal of hazardous wastes. We are also subject to liability for the investigation
and remediation of environmental contamination (including contamination caused by other
parties) at the properties we own or operate and at other properties where the Company or
our predecessors have arranged for the disposal of hazardous substances. As a result, we
are involved, from time to time, in administrative and judicial proceedings and inquiries
relating to environmental matters. There can be no assurance that we will not be involved
in such proceedings in the future and that the aggregate amount of future clean-up costs
and other environmental liabilities will not have a material adverse effect on our
business, financial condition and results of operations. We believe that our facilities
and operations are in material compliance with all environmental, health and safety laws. NOTE 4.
GUARANTEES  Pursuant
to the terms of a $300.0 million asset backed facility, entered into in November of 2002
by a special-purpose bankruptcy remote subsidiary of ours (the Asset Backed
Facility), we provide credit enhancement to the note purchasers consisting of an
irrevocable letter of credit, an unconditional lending commitment of the lenders under our
senior credit facility, subject to certain limits. We are obligated under the
reimbursement provisions of the senior credit facility to reimburse the lenders for any
drawings on the credit enhancement by the facility indenture trustee. If the credit
enhancement is not replenished by us after a drawing, the trust will not be permitted to
request new borrowings under the Asset Backed Facility and the Asset Backed Facility will
begin to amortize. The amount of the irrevocable letter of credit related to the Asset
Backed Facility at September 30, 2004 was $25.4 million. 9   We
offer warranties to our customers depending upon the specific product and the product use.
Standard product warranties vary from one to three years for most parts with certain
components extending to five years. Certain customers have elected to buy products without
warranty coverage. The standard warranty program requires that we replace defective
components within a specified time period from the date of installation. We record an
estimate for future warranty related costs based on actual historical incident rates and
cost per incident trends. Based on analysis of these and other factors, the carrying
amount of our warranty liability is adjusted as necessary. While our warranty costs have
historically been within our calculated estimates, it is possible that future warranty
costs could exceed those estimates. The
changes in the carrying amount of our total product warranty liability for the nine months
ended September 30, 2004 and 2003 were as follows: Nine Months
      EndedSeptember
      30,
      2004
    
    September
      30,
      2003(Unaudited)Balance
      at beginning of period
    
    $
    4,759
    
    $
    4,890Accruals
      for current and pre-existing warranties 
          issued during the period
    
    
    1,434
    
    
    1,643Settlements
      made during the period
    
    
    (1,884
    )
    
    (1,718
    )Balance at
      end of period
    
    $
    4,309
    
    $
    4,815  NOTE 5.
COMPREHENSIVE INCOME  Comprehensive
income for the three months ended September 30, 2004 and 2003 consist of the following (in
thousands): Three
      Months EndedSeptember
      30,
      2004
    
    September
      30,
      2003(Unaudited)Comprehensive
      income:Net
      income
    
    
    $
    3,039
    
    $
    4,470Other
      comprehensive incomeNet
      unrealized holding gain (loss) on residual interests
    
    
    
    693
    
    
    (910
    )Comprehensive
      income
    
    
    $
    3,732
    
    $
    3,560  Comprehensive income for the nine
months ended September 30, 2004 and 2003 consist of the following (in thousands): Nine Months
      EndedSeptember
      30,
      2004
    
    September
      30,
      2003(Unaudited)Comprehensive
      income:Net
      income
    
    
    $
    13,459
    
    $
    9,702Other
      comprehensive incomeNet
      unrealized holding gain (loss) on residual interests
    
    
    
    (451
    )
    
    262Comprehensive
      income
    
    
    $
    13,008
    
    $
    9,964 10   NOTE 6.
EMPLOYEE BENEFIT PLANS  Substantially
all of our employees are covered by a defined benefit pension plan. In addition, we
provide certain health care benefits for retired employees. The components of periodic
benefit costs for these plans for the three months ended September 30, 2004 and 2003 are
as follows: Pension Benefits
    
    Other BenefitsThree Months
      Ended
    
    Three
      Months EndedSeptember
      30,
    
    September
      30,
    
    September
      30,
    
    September
      30,2004
    
    2003
    
    2004
    
    2003(Unaudited)
    
    (Unaudited)Service
      cost
    
    $
    406
    
    $
    361
    
    $
    23
    
    $
    16Interest
      cost
    
    
    671
    
    
    642
    
    
    27
    
    
    22Expected
      return on assets
    
    
    (827
    )
    
    (706
    )
    
    
    
    
    Amortization
      of net obligation
    
    
    
    
    
    
    
    
    11
    
    
    11Amortization
      of prior service cost
    
    
    18
    
    
    18
    
    
    
    
    
    Amortization
      of loss
    
    
    18
    
    
    130
    
    
    14
    
    
    9Net
      periodic benefit cost
    
    $
    286
    
    $
    445
    
    $
    75
    
    $
    58  The components of periodic benefit
costs for the nine months ended September 30, 2004 and 2003 are as follows: Pension Benefits
    
    Other BenefitsNine Months
      Ended
    
    Nine Months
      EndedSeptember
      30,
    
    September
      30,
    
    September
      30,
    
    September
      30,2004
    
    2003
    
    2004
    
    2003(Unaudited)
    
    (Unaudited)Service
      cost
    
    
    $
    1,218
    
    $
    1,083
    
    $
    69
    
    $
    47Interest
      cost
    
    
    
    2,013
    
    
    1,927
    
    
    81
    
    
    67Expected
      return on assets
    
    
    
    (2,480
    )
    
    (2,117
    )
    
    
    
    
    Amortization
      of net obligation
    
    
    
    
    
    
    
    
    
    34
    
    
    34Amortization
      of prior service cost
    
    
    
    53
    
    
    53
    
    
    
    
    
    Amortization
      of loss
    
    
    
    54
    
    
    388
    
    
    43
    
    
    27Net periodic
      benefit cost
    
    
    $
    858
    
    $
    1,334
    
    $
    227
    
    $
    175  Employer Contributions We
previously disclosed in our financial statements for the year ended December 31, 2003 that
we did not expect to make any contributions to our pension plan for 2004. As of September
30, 2004, $1.1 million of voluntary contributions have been made. We do not presently
anticipate contributing additional funds to our pension plan in 2004. We currently
anticipate making an additional voluntary contribution of approximately $1.1 million in
2005. In
April 2004, the Pension Funding Equity Act of 2004, or the Pension Funding Act, was signed
into law allowing many corporations to reduce their required pension contributions during
2004 and 2005. The Pension Funding Act had no material impact on our 2004 required minimum
contribution of zero. 11   Postretirement Health
Care Plan Our
postretirement health care plan provides for prescription drug benefits. On December 8,
2003, the Medicare Prescription Drug, Improvement and Modernization Act of 200, or the Medicare Act,
was signed into law. The Medicare Act introduces a prescription drug
benefit under Medicare (Medicare Part D) as well as a federal subsidy to sponsors of
retiree health care benefit plans that provide a benefit that is at least actuarially
equivalent to Medicare Part D. Because our postretirement health care plan does not
provide prescription drug benefits beyond age 65 (general eligibility for Medicare Part
D), the Medicare Act will have no effect on our accumulated postretirement benefit
obligations or net periodic postretirement benefit cost. NOTE 7.
RELATED PARTY TRANSACTIONS  2003 Executive Unit
Agreements On
July 23, 2003, we amended and restated our Limited Liability Company Agreement to issue
Class M Units and to issue incremental Class B Units, which in turn have been issued to
certain members of management (each an Executive). These units were issued in
return for the Executives present service to us and as an incentive for the
Executive to continue to provide future services to us. These units are subject to certain
terms and conditions which include vesting provisions and repurchase provisions if the
Executive is no longer employed by us. The
Class M and incremental Class B Units were purchased by the Executives at a nominal value
based upon the subordinated nature of such interests. Based upon a valuation of these and
all other previously issued incentive units, for the nine months ended September 30, 2004,
we have recognized $0.5 million of compensation expense and a corresponding credit to
additional paid in capital. At any such time that these units would be considered to have
a higher value, we would record an appropriate level of compensation expense. NOTE 8.
OFFERING OF INCOME DEPOSIT SECURITIES  On
April 13, 2004 we announced that Alliance Laundry Holdings Inc. (Alliance Laundry
Holdings), a company formed to be the holding company for the operations of Alliance
Laundry Systems LLC and its subsidiaries filed a registration statement with the
Securities and Exchange Commission relating to the proposed initial public offering of
Income Deposit Securities, or IDSs, representing shares of Alliance Laundry Holdings
Class A common stock and senior subordinated notes. The registration statement also
related to an offering of a separate issue of senior subordinated notes of the same series
as the senior subordinated notes represented by the IDSs. As a result of this offering, as
of September 30, 2004 we have incurred and recorded $1.3 million of offering related
expenses in the consolidated statement of income. In addition we have capitalized $3.1
million of debt and offering related costs in other assets within the consolidated balance
sheet. As with all transactions of this nature, in the event that the IDS offering is
abandoned, we would be required to write-off the capitalized debt and offering related
costs to our consolidated statement of income in the quarter in which such a decision is
made. In
connection with these offerings, we expect to commence a tender offer and consent
solicitation for all of our outstanding $110 million aggregate principal amount of 9 5/8%
senior subordinated notes due 2008. 12   NOTE 9.
MANDATORILY REDEEMABLE PREFERRED INTERESTS  Our
mandatorily redeemable preferred interests have a liquidation value of $6.0 million. These
mandatorily redeemable preferred interests do not accrete, accrue or pay dividends and are
redeemable at the earlier of (i) a change of control (as defined in the Alliance Laundry
Holdings Amended and Restated Limited Liability Company Agreement), (ii) any initial
public offering or (iii) November 5, 2009. The holders of the mandatorily redeemable
preferred interests are entitled to receive distributions from us in an amount equal to
their unreturned capital (as defined in the Alliance Laundry Holdings Amended and Restated
Limited Liability Company Agreement) prior to distributions in respect of any other
membership interests of the Company. We
adopted SFAS No. 150 as of January 1, 2004, which required us to reclassify the
mandatorily redeemable preferred interests from mezzanine equity to the long-term
liability section of our consolidated balance sheet. SFAS No. 150 requires us to measure
the mandatorily redeemable preferred interests at fair value at the time of adoption and
at each reporting date. The mandatorily redeemable preferred interests have been carried
at the $6.0 million redemption amount since inception, which approximates the fair value
of the mandatorily redeemable preferred interests. Upon
the consummation of the proposed offering of IDSs, the mandatorily redeemable preferred
interests would be redeemed.  ITEM 2.
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS  OVERVIEW We
believe we are the leading designer, manufacturer and marketer of stand-alone commercial
laundry equipment in North America and a leader worldwide. Under the well-known brand
names of Speed Queen, UniMac, Huebsch and Ajax, we produce a full line of commercial
washing machines and dryers with load capacities from 16 to 250 pounds as well as presses
and finishing equipment. Our commercial products are sold to four distinct customer
groups: (i) laundromats; (ii) multi-housing laundries, consisting primarily of common
laundry facilities in apartment buildings, universities and military installations; (iii)
on-premise laundries, consisting primarily of in-house laundry facilities of hotels,
hospitals, nursing homes and prisons; and (iv) drycleaners. This
discussion and analysis should be read in conjunction with the Financial Statements and
Notes thereto included in this report and in conjunction with Managements Discussion
and Analysis of Financial Condition and Results of Operations set forth in our Annual
Report on Form 10-K (file no. 333-56857) filed with the Securities and Exchange
Commission, which includes our audited financial position and operating results as of and
for the year ended December 31, 2003. 13   RESULTS OF OPERATIONS The following table sets forth our
historical net revenues for the periods indicated: Quarter EndedSeptember
      30,
      2004
    
    September
      30,
      2003(Dollars
      in millions)Net
      revenues:Commercial
      laundry
    
    
    $
    55.8
    
    $
    57.0Service
      parts
    
    
    
    9.3
    
    
    9.4$
    65.1
    
    $
    66.4  The following table sets forth
certain condensed historical financial data for us expressed as a percentage of net
revenues for each of the periods indicated: Quarter EndedSeptember
      30,
      2004
    
    September
      30,
      2003Net
      revenues
    
    100.0
    %
    
    
    100.0
    %Cost of sales
    
    72.1
    %
    
    
    70.6
    %Gross profit
    
    27.9
    %
    
    
    29.4
    %Selling,
      general and administrative expense
    
    12.7
    %
    
    
    12.8
    %Operating
      income
    
    15.2
    %
    
    
    16.6
    %Net
      income
    
    4.7
    %
    
    
    6.7
    %  Net
revenues. Net revenues for the quarter ended September 30, 2004 decreased $1.3
million, or 1.9%, to $65.1 million from $66.4 million for the quarter ended September 30,
2003. This decrease was primarily attributable to lower commercial laundry revenue of $3.7
million and lower service parts revenue of $0.1 million, which were partially offset by
higher consumer laundry revenue of $2.5 million. The decrease in commercial laundry
revenue was due primarily to lower North American equipment revenue of $5.3 million and
lower earnings from our equipment financing program of $0.3 million, which were partially
offset by higher international revenue of $1.9 million. Revenue for North America was
lower to coin-operated laundry customers and multi-housing laundry customers and higher to
drycleaners. The consumer laundry revenue resulted from sales to distributors in
preparation for our re-entry into the consumer laundry marketplace. Revenue for
international was higher to customers in Asia, the Middle East, Africa, and Europe. Gross
profit. Gross profit for the quarter ended September 30, 2004 decreased $1.4 million,
or 7.1%, to $18.1 million from $19.5 million for the quarter ended September 30, 2003.
This decrease was primarily attributable to nickel and chrome surcharges of $1.1 million
related to stainless steel purchases, higher medical and workers compensation costs and
the margins associated with the lower sales volume. Gross profit was not affected to the
full extent of recent steel market conditions as we have steel purchase agreements in
place. Once these agreements expire we will be subject to prevailing steel prices at that
time. As a result of the recent escalation in the cost of steel and the negative impact
from nickel and chrome surcharges related to stainless steel purchases, we have published
a price increase, effective on December 1, 2004, which is expected to offset for
anticipated steel cost increases. Gross profit as a percentage of net revenues decreased
to 27.9% for the quarter ended September 30, 2004 from 29.4% for the quarter ended
September 30, 2003 primarily as a result of the nickel and chrome surcharges. 14   Selling,
general and administrative expense. Selling, general and administrative expenses for
the quarter ended September 30, 2004 decreased $0.2 million, or 3.0%, to $8.3 million from
$8.5 million for the quarter ended September 30, 2003. The decrease in selling, general
and administrative expenses was primarily due to lower pension costs of $0.3 million and
lower incentive expenses of $0.4 million, which were partially offset by higher
independent development costs of $0.2 million and costs associated with the implementation
of Sarbanes-Oxley initiatives of $0.2 million. Selling, general and administrative
expenses as a percentage of net revenues decreased to 12.7% for the quarter ended
September 30, 2004 from 12.8% for the quarter ended September 30, 2003. Operating
income. As a result of the foregoing, operating income for the quarter ended September
30, 2004 decreased $1.2 million, or 10.5%, to $9.8 million from $11.0 million for the
quarter ended September 30, 2003. Operating income as a percentage of net revenues
decreased to 15.2% for the quarter ended September 30, 2004 from 16.6% for the quarter
ended September 30, 2003. Interest
expense. Interest expense for the quarter ended September 30, 2004 increased $0.3
million, or 5.0%, to $6.8 million from $6.5 million for the quarter ended September 30,
2003. Interest expense in 2003 includes a favorable non-cash adjustment of $0.5 million to
reflect changes in the fair values of an interest rate swap agreement. Cash interest
expense decreased by $0.5 million as compared to the prior year as a result of reductions
in total debt outstanding, but was partially offset by an increase of $0.3 million in
interest expense related to our junior subordinated notes. Net
income. As a result of the foregoing, net income for the quarter ended September 30,
2004 decreased $1.5 million to net income of $3.0 million as compared to net income of
$4.5 million for the quarter ended September 30, 2003. Net income as a percentage of net
revenues decreased to 4.7% for the quarter ended September 30, 2004 from 6.7% for the
quarter ended September 30, 2003. The following table sets forth our
historical net revenues for the periods indicated: Nine Months
      EndedSeptember
      30,
      2004
    
    September
      30,
      2003(Dollars
      in millions)Net
      revenues:Commercial
      laundry
    
    
    $
    176.0
    
    $
    170.5Service
      parts
    
    
    
    28.8
    
    
    28.1$
    204.8
    
    $
    198.6  The following table sets forth
certain condensed historical financial data for us expressed as a percentage of net
revenues for each of the periods indicated: Nine Months
      EndedSeptember
      30,
      2004
    
    September
      30,
      2003Net
      revenues
    
    
    
    100.0
    %
    
    100.0
    %Cost of sales
    
    
    
    70.7
    %
    
    71.1
    %Gross
      profit
    
    
    
    29.3
    %
    
    28.9
    %Selling,
      general and administrative expense
    
    
    
    12.7
    %
    
    12.6
    %Offering
      related expenses
    
    
    
    0.6
    %
    
    Operating
      income
    
    
    
    16.0
    %
    
    16.3
    %Net
      income
    
    
    
    6.6
    %
    
    4.9
    %  15   Net
revenues. Net revenues for the nine months ended September 30, 2004 increased $6.2
million, or 3.1%, to $204.8 million from $198.6 million for the nine months ended
September 30, 2003. This increase was primarily attributable to higher commercial laundry
revenue of $3.0 million, higher consumer laundry revenue of $2.5 million and higher
service parts revenue of $0.7 million. The increase in commercial laundry revenue was due
primarily to higher international revenue of $6.7 million, but was partly offset by lower
North American equipment revenue of $3.7 million. The decrease in North American equipment
revenues was primarily due to lower revenues from multi-housing laundry customers and
coin-operated laundry customers, which were partly offset by higher revenues from a
current year price increase, as well as higher revenues from on-premise laundry customers
and drycleaners. The consumer laundry revenue resulted from sales to distributors in
preparation for our re-entry into the consumer laundry marketplace. Revenue for
international was higher to customers in Asia, the Middle East, Africa and Europe. Gross
profit. Gross profit for the nine months ended September 30, 2004 increased $2.6
million, or 4.6%, to $60.0 million from $57.4 million for the nine months ended September
30, 2003. This increase was primarily attributable to the margins associated with the
higher sales volume, the price increase, and lower depreciation expense, which were
partially offset by nickel and chrome surcharges of $3.0 million related to stainless
steel purchases. Gross profit as a percentage of net revenues increased to 29.3% for the
nine months ended September 30, 2004 from 28.9% for the nine months ended September 30,
2003. Selling,
general and administrative expense. Selling, general and administrative expenses for
the nine months ended September 30, 2004 increased $1.1 million, or 4.3%, to $26.0 million
from $24.9 million for the nine months ended September 30, 2003. The increase in selling,
general and administrative expenses was primarily due to higher sales and marketing
expenses of $1.0 million, non-cash incentive compensation of $0.5 million in 2004, and
higher independent development costs of $0.5 million, which were partially offset by lower
pension expense of $0.8 million. Selling, general and administrative expenses as a
percentage of net revenues increased to 12.7% for the nine months ended September 30, 2004
from 12.6% for the nine months ended September 30, 2003. Offering
related expense. Offering related expense for the nine months ended September 30, 2004
was $1.3 million, with no similar expense in 2003. Offering related expense as a
percentage of net revenues was 0.6% for the nine months ended September 30, 2004. Operating
income.As a result of the foregoing, operating income for the nine months ended
September 30, 2004 increased $0.2 million, or 0.8%, to $32.7 million from $32.5 million
for the nine months ended September 30, 2003. Operating income as a percentage of net
revenues decreased to 16.0% for the nine months ended September 30, 2004 from 16.3% for
the nine months ended September 30, 2003. Interest
expense. Interest expense for the nine months ended September 30, 2004 decreased $2.7
million, or 12.4%, to $19.2 million from $21.9 million for the nine months ended September
30, 2003. Interest expense in 2004 includes a favorable non-cash adjustment of $1.1
million to reflect changes in the fair values of an interest rate swap agreement. Interest
expense in 2003 includes an unfavorable non-cash adjustment of $0.9 million to reflect
changes in the fair values of a similar interest rate swap agreement. Cash interest
expense was lower as compared to the prior year by $0.7 million as a result of reductions
in total debt outstanding, but was partially offset by $0.6 million of higher interest
expense related to our junior subordinated notes. 16   Net
income. As a result of the foregoing, net income for the nine months ended September
30, 2004 increased $3.8 million to net income of $13.5 million as compared to net income
of $9.7 million for the nine months ended September 30, 2003. Net income as a percentage
of net revenues increased to 6.6% for the nine months ended September 30, 2004 from 4.9%
for the nine months ended September 30, 2003. LIQUIDITY AND CAPITAL
RESOURCES On
April 13, 2004 we announced that Alliance Laundry Holdings Inc. (Alliance Laundry
Holdings), a company formed to be the holding company for the operations of Alliance
Laundry Systems LLC and its subsidiaries, filed a registration statement with the
Securities and Exchange Commission relating to the proposed initial public offering of
IDSs representing shares of Alliance Laundry Holdings Class A common stock and
senior subordinated notes. The registration statement also related to an offering of a
separate issue of senior subordinated notes of the same series as the senior subordinated
notes represented by the IDSs. As a result of this offering, as of September 30, 2004 we
have incurred and recorded $1.3 million of offering related expense in the consolidated
statement of income, and have capitalized $3.1 million of debt and offering related costs
in the consolidated balance sheet. In
connection with these offerings, we expect to commence a tender offer and consent
solicitation for all of our outstanding $110 million aggregate principal amount of 9 5/8%
senior subordinated notes due 2008. We
expect to use the proceeds from the offering to repay the outstanding indebtedness under
our existing senior credit facility. We will also enter into a new credit facility that
will be comprised of a senior secured revolving credit facility (the New
Revolver) and a senior secured term loan facility (the New Term Loan).
We expect to use borrowings under the New Revolver for general corporate purposes,
including working capital, capital expenditures, payment of dividends and letters of
credit. The
New Revolver will require that we meet certain financial tests and will contain customary
covenants and restrictions. We
believe, based on currently available information, that future cash flows from operations,
together with available borrowings under the New Revolver, will be adequate to meet our
anticipated requirements for capital expenditures, working capital, interest payments,
scheduled principal payments and other debt repayments while achieving all required
covenant requirements under the New Revolver and New Term Loan. Our
ability to make scheduled payments of principal or to refinance our indebtedness, or to
pay the interest or liquidated damages, if any thereon, or to fund planned capital
expenditures, will depend upon our future performance, which, in turn, is subject to
general economic, financial, competitive and other factors that are beyond our control.
There can be no assurance that our business will continue to generate sufficient cash flow
from operations in the future to service our debt and make necessary capital expenditures
after satisfying certain liabilities arising in the ordinary course of business. If unable
to do so, we may be required to refinance all or a portion of our debt, to sell assets or
to obtain additional financing. There can be no assurance that any such refinancing would
be available or that any such sales of assets or additional financing could be obtained. 17   As
of September 30, 2004, we have $274.4 million of combined indebtedness outstanding,
consisting of outstanding debt of $136.0 million under our term loan facility, $110.0
million of senior subordinated notes and $27.6 million of junior subordinated notes, $0.5
million of borrowings pursuant to a Wisconsin Community Development Block Grant Agreement
and $0.3 million of borrowings pursuant to an equipment financing transaction with Alliant
Energy  Wisconsin Power & Light Company. At September 30, 2004 there were no
borrowings under our revolving credit facility. Letters of credit issued on our behalf
under the revolving credit facility totaled $26.9 million at September 30, 2004. As a
result, at September 30, 2004 we had $18.1 million of our $45.0 million revolving credit
facility available subject to certain limitations under our senior credit facility. After
considering such limitations, which relate primarily to the maximum ratio of consolidated
debt to EBITDA, we could have borrowed $18.1 million at September 30, 2004 in additional
indebtedness under the revolving credit facility. The
term loan facility amortizes quarterly and is repayable in the following aggregate
amounts: Year
    Amount Due(Dollars
      in
      millions)2004
    $
    3.02005
    $
    12.12006
    $
    16.12007
    $
    104.8 Our
Asset Backed Facility provides for a total of $300.0 million in off-balance sheet
financing for trade receivables and equipment loans. The finance programs have been and
will continue to be structured in a manner that qualifies for off-balance sheet treatment
in accordance with generally accepted accounting principles. It is expected that under the
Asset Backed Facility, we will continue to act as originator and servicer of the equipment
financing promissory notes and the trade receivables. Historical Cash
generated from operations for the nine months ended September 30, 2004 of $26.1 million
was principally derived from operations (net income adjusted for depreciation,
amortization, non-cash interest and non-cash incentive unit compensation) as well as from
changes in working capital. The working capital investment for beneficial interests in
securitized accounts receivable at September 30, 2004 of $17.4 million increased $0.6
million as compared to the balance of $16.8 million at December 31, 2003, which was
primarily attributable to an increase in retained interests on trade receivables sold
under the new Asset Backed Facility. Other assets at September 30, 2004 of $5.0 million
increased $3.3 million as compared to the balance of $1.7 million at December 31, 2003,
which was primarily attributable to $3.1 million of capitalized IDS costs. Inventory at
September 30, 2004 of $29.0 million increased $2.8 million as compared to the balance of
$26.2 million at December 31, 2003. The investment in notes receivable at September 30,
2004 of $6.0 million decreased $2.2 million as compared to the balance of $8.2 million at
December 31, 2003. Net cash provided by operating
activities for the nine months ended September 30, 2004 of $26.1 million increased by
$7.6 million as compared to the nine months ended September 30, 2003. This increase was
primarily due to lower net cash used in changes in assets and liabilities of $5.0 million
and higher cash provided by operations of $2.6 million for the nine months ended
September 30, 2004 as compared to the nine months ended September 30, 2003. The lower net
cash impact from changes in assets and liabilities for the nine months ended September
30, 2004 of $5.0 million was largely due to an increase in accounts payable of $0.5
million for the nine months ended September 30, 2004 as compared to a decrease of $3.0
million for the nine months ended September 30, 2003. Additionally, accounts receivable
held by us decreased $0.2 million for the nine months ended September 30, 2004 as
compared to an increase of $1.9 million for the same period in 2003. 18   Capital Expenditures Our
capital expenditures for the nine months ended September 30, 2004 and September 30, 2003
were $3.0 million and $3.1 million, respectively. Capital spending in 2004 and 2003 was
oriented toward product feature enhancements, manufacturing process improvements and
replacement of aging equipment. We expect that capital expenditures for the full year 2004
will not exceed $4.5 million. Contingencies Contingent
liabilities arise in the normal course of our business, including pending litigation,
environmental remediation and other claims. Our legal department estimates the costs to
settle pending litigation, including legal expenses, based on past experience involving
similar cases, specific facts known, and, if applicable, material judgments of outside
counsel. The outcome of these matters is not expected to have a material adverse effect on
our consolidated financial position, results of operations, or cash flows. RECENTLY ISSUED
ACCOUNTING PRONOUNCEMENTS During
January 2003, the Financial Accounting Standards Board, or FASB, issued FIN No. 46,
Consolidation of Variable Interest Entities, which clarifies the consolidation
and disclosure requirements related to variable interests in a variable interest entity. A
variable interest entity is an entity for which control is achieved through means other
than voting rights. In December 2003, the FASB issued a revision to FIN No. 46, which
replaced FIN No. 46. The revised Interpretation (FIN 46-R) was adopted by us
beginning on January 1, 2004 for interests in entities created on or before December 31,
2003 and as of the date we first become involved with a potential variable interest entity
created after December 31, 2003. FIN
46-R provides exceptions from its scope for certain entities, including qualifying
special-purpose securitization entities subject to the reporting requirements of SFAS No.
140 and business entities, as defined, that do not possess certain characteristics. Our
primary variable interests are notes receivable that have not been sold and are comprised
primarily of equipment loans to laundromat operators and other end-users. Excluding notes
awaiting sale, the carrying value of such loans was approximately $4.8 million at
September 30, 2004. If in the future we are required to consolidate a variable interest entity in which
one or both of our SFAS No. 140 qualifying special-purpose entities also holds a variable
interest, the qualifying status of the special-purpose entity with such holdings would be
eliminated. In that instance, we would be required to determine if we are the primary
beneficiary of the affected securitization entity under FIN 46-R and if so, to consolidate
that entity, which would have a material effect on our consolidated financial position,
results of operations and cash flows. During
May 2003, the FASB issued SFAS No. 150, Accounting for Certain Financial Instruments
with Characteristics of both Liabilities and Equity, which establishes standards for
the classification and measurement of certain financial instruments with characteristics
of both liabilities and equity. The FASB has also subsequently issued certain staff
positions that effectively amended SFAS No. 150. The Statement is effective for us
beginning January 1, 2004. As a result of the adoption of SFAS No. 150, as amended,
our mandatorily redeemable preferred
interests have been reclassified from mezzanine equity to the long- term liability section
of our consolidated balance sheet (see Note 9). 19    During
December 2003, the FASB revised SFAS No. 132, Employers Disclosures about
Pensions and Other Postretirement Benefits, to require additional disclosures about
the assets, obligations, cash flows, and net periodic benefit cost of defined benefit
pension plans and other defined benefit postretirement plans. These disclosure
requirements were effective for our plans in 2003. This Statement also requires
interim-period disclosures of the components of net periodic benefit cost and, if
significantly different from previously disclosed amounts, the amount of contributions and
projected contributions to fund pension and other postretirement benefit plans. These
interim-period disclosures have been included within our financial statement notes (see
Note 6). On
December 8, 2003, the Medicare Prescription Drug, Improvement and Modernization Act of
2003, or the Medicare Act, was signed into law. The Medicare Act introduces a prescription
drug benefit under Medicare (Medicare Part D) as well as a federal subsidy to sponsors of
retiree health care benefit plans that provide a benefit that is at least actuarially
equivalent to Medicare Part D. Because our postretirement health care plan does not
provide prescription drug benefits beyond age 65 (general eligibility for Medicare Part
D), the Medicare Act will have no effect on our accumulated postretirement
benefit obligations or net periodic postretirement benefit cost. The
FASB is expected to re-expose a proposed statement that would amend and clarify SFAS No.
140 (and related implementation guidance). The proposed statement will address permitted
activities of qualifying special-purpose entities, including the degree of discretion
allowable in determining the terms of beneficial interests issued after inception, and
whether certain transfers can meet the criteria for sale accounting under SFAS No. 140 if
the transferor or any consolidated affiliate provides liquidity support for the
transferees beneficial interests. As the proposed statement has not been issued, we
are unable to determine the effects of the related transition provisions, if any, on our
existing securitization entities. However, in the event that transfers to our existing
asset backed facility would no longer qualify as sales of financial assets in the future,
we may recognize additional costs for a replacement facility or it may have other material
financial statement effects.  ITEM 3.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK  We
are potentially exposed to market risk associated with changes in interest and foreign
exchange rates. From time to time we may enter into derivative financial instruments to
hedge our interest rate exposures and to hedge exchange rate fluctuations between United
States dollars and foreign currencies. An instrument will be treated as a hedge if it is
effective in offsetting the impact of volatility in our underlying exposures. We do not
enter into derivatives for speculative purposes. We
are exposed to commodity price risk related to our purchase of selected commodities used
in the manufacture of our products. From time to time we have entered into foreign
exchange hedge contracts to stabilize the potential impact of raw material prices
denominated in foreign currencies. In addition, from time to time we hedge natural gas and
other commodity prices to stabilize the potential for changing commodity prices. With
the exception of recent increases in steel related material costs, there have been no
material changes in our market risk exposures as compared to those discussed in our Annual
Report on Form 10-K (file no. 333-56857). 20    ITEM 4.
CONTROLS AND PROCEDURES  (a) 
          We carried out an evaluation within the 90 day period prior to this report,
          under the supervision and with the participation of our management, including
          our Chairman and Chief Executive Officer along with our Chief Financial
Officer,           of the effectiveness of the design and operation of our disclosure
controls and           procedures. Based upon that evaluation, as of the end of the
period covered by           this quarterly report on Form 10-Q, our Chief Executive
Officer along with our           Chief Financial Officer concluded that our disclosure
controls and procedures           (as defined in Rules 13a-15(e) and 15d-15(e) under the
Securities Exchange Act           of 1934), as amended (1) are effective in timely
alerting them to material           information relating to the Company (including our
consolidated subsidiaries)           required to be included in our periodic Securities
and Exchange Commission           filings and (2) are adequate to ensure that information
required to be disclosed           by us in the reports filed or submitted by us under
the Securities Exchange Act           of 1934, as amended, is recorded, processed and
summarized and reported within           the time periods specified in the Securities and
Exchange Commissions           rules and forms. (b) 
          There have been no significant changes in our internal controls or in other
          factors, including any corrective actions with regard to significant
          deficiencies and material weaknesses, that have materially affected, or are
          reasonably likely to materially affect, internal controls subsequent to the
date           we carried out our evaluation. FORWARD-LOOKING STATEMENTS With
the exception of the reported actual results, the information presented herein contains
predictions, estimates or other forward-looking statements within the meaning of Section
27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Act of
1934, as amended, including items specifically discussed in the Note 3 
Commitments and Contingencies section of this document. Such forward-looking
statements involve known and unknown risks, uncertainties and other factors that may cause
actual results, performance or achievements to differ materially from those expressed or
implied by such forward-looking statements. Although we believe that our plans, intentions
and expectations reflected in such forward-looking statements are based on reasonable
assumptions, we can give no assurance that such plans, intentions, expectations,
objectives or goals will be achieved. Important factors that could cause actual results to
differ materially from those included in forward-looking statements include: impact of
competition; continued sales to key customers; possible fluctuations in the cost of raw
materials and components; possible fluctuations in currency exchange rates, which affect
the competitiveness of our products abroad; market acceptance of new and enhanced versions
of our products; the impact of substantial leverage and debt service on us and other risks
listed from time to time in our reports, including but not limited to our Annual Report on
Form 10-K (file no. 333-56857). We do not undertake any obligation to update any such
forward looking statements unless required by law. 21    PART II
OTHER INFORMATION   Item 1.
Legal Proceedings.   See Note 3 to Item 1 in Part I.   Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds.   None.   Item 3.
Defaults upon Senior Securities.   None.   Item 4.
Submission of Matters to a Vote of Security Holders.   None.   Item 5.
Other Information.  None.   Item 6.
Exhibits and Reports on Form 8-K.  (a)
List
of Exhibits.  Exhibit
    
    Description31.1
    
    Certification
      of Chief Executive Officer31.2
    
    Certification
      of Chief Financial Officer  22    SIGNATURES Alliance
Laundry Systems LLC has duly caused this quarterly report to be signed on its behalf by
the undersigned, thereunto duly authorized. Signature
    
    
    Title
    
    Date/s/
      Thomas F. LEsperance
      
    
    
    Chairman
      and CEO
    
    10-29-04Thomas
      F. LEsperance/s/
      Bruce P. Rounds
      
    
    
    Vice
      President, Chief Financial Officer
    
    
    10-29-04
      Bruce P.
      Rounds  Alliance
Laundry Corporation has duly caused this quarterly report to be signed on its behalf by
the undersigned thereunto duly authorized. Signature
    
    
    Title
    
    Date/s/
      Thomas F. LEsperance
      
    
    
    Chairman
      and CEO
    
    10-29-04Thomas
      F. LEsperance/s/
      Bruce P. Rounds
      
    
    
    Vice
      President, Chief Financial Officer
    
    
    10-29-04
      Bruce P.
      Rounds  Alliance
Laundry Holdings LLC has duly caused this quarterly report to be signed on its behalf by
the undersigned, thereunto duly authorized. Signature
    
    
    Title
    
    Date/s/
      Thomas F. LEsperance
      
    
    
    Chairman
      and CEO
    
    10-29-04Thomas
      F. LEsperance/s/
      Bruce P. Rounds
      
    
    
    Vice
      President, Chief Financial Officer
    
    
    10-29-04
      Bruce P.
      Rounds  23