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, 2003



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.





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Alliance Laundry Holdings LLC

Form 10-Q

For The Period Ended September 30, 2003



Table of Contents



|           |  |                                                                                                       |  | Page No.
|---------- |  | ----------------------------------------------------------------------------------------------------- |  | --------
|PART I     |  | Financial Information                                                                                 |  |         
|           |  |                                                                                                      
|Item 1.    |  | Financial Statements                                                                                  |  |         
|           |  |                                                                                                      
|           |  | Consolidated Balance Sheets as of September 30, 2003 and December 31, 2002                            |  | 3       
|           |  |                                                                                                      
|           |  | Consolidated Statements of Income for the periods ended September 30, 2003 and September 30, 2002     |  | 4       
|           |  |                                                                                                      
|           |  | Consolidated Statements of Cash Flows for the periods ended September 30, 2003 and September 30, 2002 |  | 5       
|           |  |                                                                                                      
|           |  | Notes to Unaudited Consolidated Financial Statements                                                  |  | 6       
|           |  |                                                                                                      
|Item 2.    |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                 |  | 12      
|           |  |                                                                                                      
|Item 3.    |  | Quantitative and Qualitative Disclosure About Market Risk                                             |  | 19      
|           |  |                                                                                                      
|Item 4.    |  | Controls and Procedures                                                                               |  | 19      
|           |  |                                                                                                      
|PART II    |  | Other Information                                                                                     |  |         
|           |  |                                                                                                      
|Item 1.    |  | Legal Proceedings                                                                                     |  | 20      
|           |  |                                                                                                      
|Item 2.    |  | Changes in Securities                                                                                 |  | 20      
|           |  |                                                                                                      
|Item 3.    |  | Defaults upon Senior Securities                                                                       |  | 20      
|           |  |                                                                                                      
|Item 4.    |  | Submission of Matters to a Vote of Security Holders                                                   |  | 20      
|           |  |                                                                                                      
|Item 5.    |  | Other Information                                                                                     |  | 20      
|           |  |                                                                                                      
|Item 6.    |  | Exhibits and Reports on Form 8-K                                                                      |  | 20      
|           | 
|Signatures |  | 22                                                                                                   





2



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PART I     
FINANCIAL INFORMATION



ITEM 1.     
FINANCIAL STATEMENTS.



ALLIANCE
LAUNDRY HOLDINGS LLC

CONSOLIDATED BALANCE SHEETS

(in thousands)



|                                                        |  | September 30,2003 |          |   | December 31,2002 |  
|------------------------------------------------------- |  | ----------------- | -------- | - | ---------------- | -
|                                                        |  | (unaudited)       |          |   |                  |  
|Assets                                                  |  |                   |          |   |                  |  
|Current assets:                                         |  |                   |          |   |                  |  
|Cash                                                    |  | $                 | 5,540    |   |                  | $
|Cash-restricted                                         |  |                   |         |   |                  |  
|Accounts receivable, net                                |  |                   | 7,721    |   |                  |  
|Inventories, net                                        |  |                   | 27,849   |   |                  |  
|Beneficial interests in securitized accounts receivable |  |                   | 20,906   |   |                  |  
|Prepaid expenses and other                              |  |                   | 2,590    |   |                  |  
|                                                        |  |                   |          |   |                  |  
|Total current assets                                    |  |                   | 64,606   |   |                  |  
|Notes receivable, net                                   |  |                   | 8,122    |   |                  |  
|Property, plant and equipment, net                      |  |                   | 35,670   |   |                  |  
|Goodwill, net                                           |  |                   | 55,414   |   |                  |  
|Beneficial interests in securitized financial assets    |  |                   | 22,174   |   |                  |  
|Debt issuance costs, net                                |  |                   | 8,130    |   |                  |  
|Other assets                                            |  |                   | 1,685    |   |                  |  
|                                                        |  |                   |          |   |                  |  
|Total assets                                            |  | $                 | 195,801  |   |                  | $
|                                                        |  |                   |          |   |                  |  
|                                                        |  |                  
|Liabilities and Members Deficit                        |  |                   |          |   |                  |  
|Current liabilities:                                    |  |                   |          |   |                  |  
|Current portion of long-term debt                       |  | $                 | 10,589   |   |                  | $
|Revolving credit facility                               |  |                   |         |   |                  |  
|Accounts payable                                        |  |                   | 10,817   |   |                  |  
|Other current liabilities                               |  |                   | 24,227   |   |                  |  
|                                                        |  |                   |          |   |                  |  
|Total current liabilities                               |  |                   | 45,633   |   |                  |  
|Long-term debt:                                         |  |                   |          |   |                  |  
|Senior credit facility                                  |  |                   | 155,654  |   |                  |  
|Senior subordinated notes                               |  |                   | 110,000  |   |                  |  
|Junior subordinated note                                |  |                   | 23,142   |   |                  |  
|Other long-term debt                                    |  |                   | 845      |   |                  |  
|Other long-term liabilities                             |  |                   | 11,271   |   |                  |  
|                                                        |  |                   |          |   |                  |  
|Total liabilities                                       |  |                   | 346,545  |   |                  |  
|Mandatorily redeemable preferred equity                 |  |                   | 6,000    |   |                  |  
|Members deficit                                        |  |                   | (156,744 | ) |                  |  
|                                                        |  |                   |          |   |                  |  
|Total liabilities and members deficit                  |  | $                 | 195,801  |   |                  | $
|                                                        |  |                   |          |   |                  |  



The accompanying notes
are an integral part of the financial statements.



3



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ALLIANCE LAUNDRY HOLDINGS LLC

CONSOLIDATED STATEMENTS OF INCOME

(in thousands)



|                                            |  | Three Months Ended |        |   | Nine Months Ended 
|------------------------------------------- |  | ------------------ | ------ | - | ------------------
|                                            |  | September 30, 2003 |        |   | September 30, 2002
|                                            |  | (unaudited)        |        |   | (unaudited)       
|Net revenues:                               |  |                    |        |   |                   
|Commercial laundry                          |  | $                  | 57,185 |   |                   
|Service parts                               |  |                    | 9,449  |   |                   
|                                            |  |                    |        |   |                   
|                                            |  |                    | 66,634 |   |                   
|                                            |  |                    |        |  
|Cost of sales                               |  |                    | 47,112 |   |                   
|                                            |  |                    |        |   |                   
|Gross profit                                |  |                    | 19,522 |   |                   
|                                            |  |                    |        |  
|Selling, general and administrative expense |  |                    | 8,521  |   |                   
|                                            |  |                    |        |   |                   
|Operating income                            |  |                    | 11,001 |   |                   
|                                            |  |                    |        |  
|Interest expense                            |  |                    | 6,523  |   |                   
|Loss from early extinguishment of debt      |  |                    |       |   |                   
|Abandoned Canadian public offering costs    |  |                    |       |   |                   
|Other income (expense), net                 |  |                    | (1     | ) |                   
|                                            |  |                    |        |   |                   
|Income before taxes                         |  |                    | 4,477  |   |                   
|Provision for income taxes                  |  |                    | 7      |   |                   
|                                            |  |                    |        |   |                   
|Net income                                  |  | $                  | 4,470  |   |                   
|                                            |  |                    |        |   |                   













The accompanying notes are an integral part of the financial statements.



4



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ALLIANCE LAUNDRY HOLDINGS LLC

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)



|                                                                                  |  | Nine Months Ended |        
|--------------------------------------------------------------------------------- |  | ----------------- | -------
|                                                                                  |  | September 30,2003 |        
|                                                                                  |  | (unaudited)       |        
|Cash flows from operating activities:                                             |  |                   |        
|Net income                                                                        |  | $                 | 9,702  
|Adjustments to reconcile net income to net cash provided by operating activities: |  |                   |        
|Depreciation and amortization                                                     |  |                   | 8,264  
|Non-cash interest                                                                 |  |                   | 4,456  
|Non-cash loss from early extinguishment of debt                                   |  |                   |       
|Gain on sale of property, plant and equipment                                     |  |                   | (8     
|Changes in assets and liabilities:                                                |  |                   |        
|Accounts receivable                                                               |  |                   | (1,887 
|Inventories                                                                       |  |                   | (2,152 
|Other assets                                                                      |  |                   | 1,165  
|Accounts payable                                                                  |  |                   | (2,980 
|Other liabilities                                                                 |  |                   | 1,896  
|                                                                                  |  |                   |        
|Net cash provided by operating activities                                         |  |                   | 18,456 
|                                                                                  |  |                   |        
|Cash flows from investing activities:                                             |  |                   |        
|Additions to property, plant and equipment                                        |  |                   | (3,145 
|Proceeds on disposal of property, plant and equipment                             |  |                   | 35     
|                                                                                  |  |                   |        
|Net cash used in investing activities                                             |  |                   | (3,110 
|                                                                                  |  |                   |        
|Cash flows from financing activities:                                             |  |                   |        
|Repayment of management note                                                      |  |                   | 32     
|Proceeds from long-term debt                                                      |  |                   |       
|Principal payments on long-term debt                                              |  |                   | (17,177
|Debt financing costs                                                              |  |                   |       
|                                                                                  |  |                   |        
|Net cash used in financing activities                                             |  |                   | (17,145
|                                                                                  |  |                   |        
|Increase (decrease) in cash                                                       |  |                   | (1,799 
|Cash at beginning of period                                                       |  |                   | 7,339  
|                                                                                  |  |                   |        
|Cash at end of period                                                             |  | $                 | 5,540  
|                                                                                  |  |                   |        
|Supplemental disclosure of cash flow information:                                 |  |                   |        
|Cash paid for interest                                                            |  | $                 | 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



The unaudited financial statements as of September 30, 2003 and for the periods ended September 30, 2003 present the consolidated financial position and results of operations of Alliance Laundry Holdings LLC (the Company),
including its 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 the financial position and operating results of the Company 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 the Company 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 the Company believes 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 periods ended September 30, 2003 should be read in conjunction with the audited financial statements presented in the Companys Annual Report on Form 10-K (file no. 333-56857) filed with the Securities and Exchange Commission,
which includes the audited financial statements of the Company as of and for the year ended December 31, 2002.



In June 2001, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 143,
Accounting for Asset Retirement Obligations. This statement addresses the financial accounting and reporting for obligations associated with the retirement of tangible long-lived assets and the associated asset retirement costs. The
provisions of SFAS No. 143 are effective for fiscal years beginning after June 15, 2002. The Company adopted SFAS 143 effective January 1, 2003. The adoption did not have any impact on the consolidated financial statements.



In November 2002, the FASB issued FASB Interpretation No. (FIN)
45, Guarantors Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others. FIN 45 requires that upon issuance of a guarantee, the guarantor must recognize a liability for the fair
value of the obligation it assumes under that guarantee. In addition, FIN 45 requires additional disclosures about the guarantees that an entity has issued, including a reconciliation of the changes in the entitys product warranty liabilities
during the reporting period. The initial recognition and measurement provisions of FIN 45 are applicable on a prospective basis to guarantees issued or modified after December 31, 2002. The Company adopted the provisions of this statement effective
January 1, 2003. The adoption of the recognition and measurement provisions did not have a material impact on the consolidated financial statements.



During January 2003, the 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



6



---

voting rights. The consolidation provisions of FIN 46 are effective immediately for interests created after January 31,
2003. For interests created before February 1, 2003, the Company is required to adopt the consolidation provisions no later than December 31, 2003. The Company does not expect the implementation of FIN 46 to have an effect on its consolidated
financial statements as qualifying special-purpose securitization entities are excluded from the consolidation requirements of this Interpretation.



During April 2003, the FASB issued SFAS No. 149, Amendment of Statement 133 on Derivative Instruments and Hedging Activities, which amends and
clarifies financial accounting and reporting for certain derivative instruments modified or entered into after June 30, 2003. Generally, the provisions of SFAS No. 149 are effective beginning July 1, 2003. The Company adopted SFAS No. 149 effective
July 1, 2003. The adoption did not have any impact on the consolidated financial statements.



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 statement is effective for the Company beginning January 1, 2004. The Company is currently evaluating the impact of the adoption of this statement
on its consolidated financial statements.



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, 2003 |        |   | December 31, 2002 |  
|----------------------------- |  | ------------------ | ------ | - | ----------------- | -
|                              |  | (Unaudited)        |        |   |                   |  
|                              |  |                   
|Materials and purchased parts |  | $                  | 9,513  |   |                   | $
|Work in process               |  |                    | 4,176  |   |                   |  
|Finished goods                |  |                    | 16,015 |   |                   |  
|Less: inventory reserves      |  |                    | (1,855 | ) |                   |  
|                              |  |                    |        |   |                   |  
|                              |  | $                  | 27,849 |   |                   | $
|                              |  |                    |        |   |                   |  



NOTE
3.    COMMITMENTS AND CONTINGENCIES



Various claims and legal proceedings generally incidental to the normal course of business are pending or threatened against the Company. While the Company cannot predict the outcome of these matters, in the opinion of management, any
liability arising thereunder will not have a material adverse effect on the Companys 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, (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 loss of profits in Argentina and Brazil, plus damages for pain and suffering. An arbitration was conducted by an ad-hoc panel (the Lopez Arbitration), during which ALSA contended that Juan Carlos Lopez failed to fulfill
responsibilities under the Consulting Agreement and was therefore not entitled to the fees, and that ALSA was not liable for loss of profits either in Argentina or Brazil, nor



7



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for an indemnification for pain and suffering. On April 3, 2001, the Lopez Arbitration was concluded. The arbitration
panel awarded Argentine Pesos 1,408,900 (equivalent to $1.4 million U.S. dollars at the time), plus nine percent interest from September 6, 1999, plus ten percent over this principal and interest amount as moral damages, plus certain fees and costs,
while rejecting other claims of plaintiff. The Company believed, in as much as ALSA was a foreign subsidiary, ALSA was responsible for its own debts and obligations. In managements opinion based on the advice of counsel, under the terms of the
award, any such payments would have been forthcoming from the assets of ALSA. On December 20, 2001, ALSAs bankruptcy was decreed, at the request of Mr. Lopez, on grounds of non-payment of the arbitration award. On December 12, 2002, Mr. Lopez
filed a lawsuit with the National Commercial Court Number 13 in Buenos Aires, Argentina against the Company for the amount ordered to be paid in the Lopez Arbitration, plus unspecified damages caused by the award not having been timely paid.



Because of the risk this lawsuit presented, the Company
commenced settlement negotiations with Mr. Lopez in the second quarter of 2003. On July 17, 2003 a Settlement, Release, Discharge and Indemnification Agreement was entered into by Mr. Lopez and the Company. While denying any liability whatsoever,
the Company agreed to and paid Mr. Lopez US$736,440 on August 6, 2003 and agreed to deliver to Mr. Lopez in Brazil commercial laundry equipment, free of charge, up to a cost to the Company of US$60,000. 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 affiliated subsidiary companies. In addition, Mr. Lopez and his counsels signed the
dismissal of the lawsuit referred to above. A provision for this settlement was recorded in the Companys June 30, 2003 financial statements.



In April, 2002 the Company was named as a defendant in a lawsuit filed by Imonex Services, Inc. (the Plaintiff) for patent infringement,
arising from a vendor supplied coin selector, the W2000, used in certain of the Companys products. The vendor, W. H. Münzprüfer Dietmar Trenner GmbH (Münzprüfer), has indemnified the Company and has
agreed to pay and is paying for the Companys representation in this matter. Plaintiff accused the Company, and other Münzprüfer customers (the Defendants), of patent infringement resulting from the sales of the W2000
within the Defendants products. Trial commenced 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 the Plaintiff that the
asserted patent claims were infringed, are not invalid, and were not procured by inequitable conduct. The Court indicated it will issue a permanent injunction and invited the parties to submit proposed injunction languages, and objections thereto.
The Court has withheld ruling upon the timelines of Imonex bringing its damage claims. The Court reduced the jurys damage verdict from $10,350,000 ($5,382,000 against the Company with the remainder against the other Defendants) against all
Defendants, to $490,295 ($267,645 against the Company with the remainder against the other Defendants) and gave Plaintiff the option to accept the reduced damages or have a new trial on damages. On April 28, 2003, Plaintiff filed an election for a
new trial on damages, and filed proposed language for the injunction. The Defendants filed their objections to the injunction language on May 5, 2003. On August 1, 2003, the Court ruled it will not enhance any damages for willful infringement, while
entering judgment for Plaintiff on the issues of infringement, and validity of the Plaintiffs patents. Plaintiff submitted expert reports at the new trial on damages which attempted to prove actual damages of $16,267,644 ($6,305,232 against
the Company with the remainder against other Defendants). On August 12, 2003 a preliminary injunction was issued prohibiting W2000 coin selector usage.



The new trial on damages commenced August 18, 2003 and yielded a jury verdict of $1,396,873 to Plaintiff ($614,662 against the Company with the remainder
against the other Defendants) against all Defendants.



8



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On September 23, 2003 the Court declined to reduce the damages under Defendants theory that
Plaintiff had untimely filed its Complaint for patent infringement.



No entry of judgment arising from the new trial on damages has been made by the Court as of November 12, 2003.



The position of the Company remains that any liability related to this lawsuit is properly borne by Münzprüfer. The Company believes that
Münzprüfer has the ability to fully satisfy its indemnification obligations up to the amount of the revised jury award. As such, no liability has been recorded by the Company.



Environmental, Health and Safety Matters



The Company and its operations 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. The Company is also subject to liability for the
investigation and remediation of environmental contamination (including contamination caused by other parties) at the properties it owns or operates and at other properties where the Company or predecessors have arranged for the disposal of
hazardous substances. As a result, the Company is involved, from time to time, in administrative and judicial proceedings and inquires relating to environmental matters. There can be no assurance that the Company 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 the Companys business, financial condition and results of operations. The Company
believes that its facilities and operations are in material compliance with all environmental, health and safety laws.



NOTE 4.    GUARANTEES



Pursuant to the terms of the Asset Backed Facility, the Company provides credit enhancement to the note purchasers consisting of an irrevocable letter of
credit, an unconditional lending commitment of the lenders under the Senior Credit Facility, subject to certain limits. The Company is 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 the Company 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, 2003 was $23.7 million.



The Company offers warranties to its 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 without warranty coverage. The standard warranty program requires that the Company replace defective
components within a specified time period from the date of installation. The Company records an estimate for future warranty related costs based on actual historical incident rates and costs per incident trends. Based on analysis of these and other
factors, the carrying amount of the Companys warranty liability is adjusted as necessary. While the Companys warranty costs have historically been within its calculated estimates, it is possible that future warranty costs could exceed
those estimates.



9



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The changes in the carrying amount of the Companys total product warranty liability for the three
months ended September 30, 2003 and 2002 were as follows:



|                                                                             |  | Three Months Ended |      
|---------------------------------------------------------------------------- |  | ------------------ | -----
|                                                                             |  | September 30, 2003 |      
|Balance at beginning of period                                               |  | $                  | 4,890
|Accruals for warranties issued during the period                             |  |                    | 111  
|Accruals related to pre-existing warranties (including changes in estimates) |  |                    | 435  
|Settlements made during the period                                           |  |                    | (621 
|                                                                             |  |                    |      
|Balance at end of period                                                     |  | $                  | 4,815
|                                                                             |  |                    |      



The changes in the
carrying amount of the Companys total product warranty liability for the nine months ended September 30, 2003 and 2002 were as follows:



|                                                                             |  | Nine Months Ended  |       
|---------------------------------------------------------------------------- |  | ------------------ | ------
|                                                                             |  | September 30, 2003 |       
|Balance at beginning of period                                               |  | $                  | 4,890 
|Accruals for warranties issued during the period                             |  |                    | 1,043 
|Accruals related to pre-existing warranties (including changes in estimates) |  |                    | 600   
|Settlements made during the period                                           |  |                    | (1,718
|                                                                             |  |                    |       
|Balance at end of period                                                     |  | $                  | 4,815 
|                                                                             |  |                    |       



NOTE
5.    COMPREHENSIVE INCOME / (LOSS)



Comprehensive income/(loss) for the three months ended September 30, 2003 and 2002 consist of the following (in thousands):



|                                                         |  | September 30, 2003 |       |   | September 30, 2002
|-------------------------------------------------------- |  | ------------------ | ----- | - | ------------------
|Comprehensive income:                                    |  |                    |       |   |                   
|Net income                                               |  | $                  | 4,470 |   |                   
|Other comprehensive income                               |  |                    |       |   |                   
|Net unrealized holding gain (loss) on residual interests |  |                    | (910  | ) |                   
|                                                         |  |                    |       |   |                   
|Comprehensive income                                     |  | $                  | 3,560 |   |                   
|                                                         |  |                    |       |   |                   



10



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Comprehensive income/(loss) for the nine months ended September 30, 2003 and 2002 consist of the following (in
thousands):



|                                                  |  | Nine Months Ended 
|------------------------------------------------- |  | ------------------
|                                                  |  | September 30, 2003
|Comprehensive income:                             |  |                   
|Net income                                        |  | $                 
|Other comprehensive income                        |  |                   
|Net unrealized holding gain on residual interests |  |                   
|                                                  |  |                   
|Comprehensive income                              |  | $                 
|                                                  |  |                   



NOTE
6.    RELATED PARTY TRANSACTIONS



2003 Executive Unit
Agreements



On August 1, 2003, the Company amended and
restated its Limited Liability 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). The Class M Units have a higher priority in any
distributions as compared to the Companys Class A, Class B and Class C Units. These units were issued in return for the Executives present service to the Company and as an incentive for the Executive to continue to provide future
services to the Company. These units are subject to certain terms and conditions which include vesting provisions and Company repurchase provisions if the Executive is no longer employed by the Company.



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. The Company has not recognized any compensation expense related to these units. At any such time that these units would be considered to have intrinsic value, the Company would
record an appropriate level of compensation expense.



Sale of Raytheon
Security and Equity Interests



On September 12, 2003,
Raytheon Company completed the sale of all of its debt and equity interests in the Company to a group of investors consisting of TCW Shared Opportunity Fund IV, L.P., TCW Shared Opportunity Fund IVB, L.P., TCW Shared Opportunity Fund III, L.P., TCW
SHOP III Subsidiary Investment, Inc. and TCW SHOP IV Subsidiary Investment, Inc. (together, the TCW Funds) and Sankaty High Yield Partners II, L.P., Sankaty High Yield Partners III, L.P., Sankaty Credit Opportunities, L.P. and Sankaty
Alliance Corp (together, the Sankaty Funds). The debt consists of the Junior Subordinated Note and the equity interests consist of the Companys Preferred Units, and Raytheons Class A and Class L Common Units. As a result of
this transaction, the Raytheon Junior Subordinated Note was cancelled and new Junior Subordinated Notes were issued under the same terms and conditions as for Raytheon. Raytheon had formerly been the parent of the Company prior to a recapitalization
and merger transaction on May 5, 1998. The Sankaty Funds are an affiliate of Bain/RCL, L.L.C. which, before the sale, owned 55.9% of the outstanding common membership interests of the Company through its ownership of Class A and Class L membership
units in the Company.



11



---

|ITEM 2. | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|------- | -------------------------------------------------------------------------------------



OVERVIEW



The Company believes it is 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, the Company produces a full line of commercial washing machines and dryers with load capacities from 16 to 250 pounds as well as presses and finishing equipment. The Companys 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 the Companys Annual Report on Form 10-K (file no. 333-56857) filed with the Securities and Exchange Commission, which includes the audited financial position and operating results of the Company
as of and for the year ended December 31, 2002.



RESULTS OF OPERATIONS



The following table sets forth the Companys historical net revenues for
the periods indicated:



|                   |  | Quarter Ended        
|------------------ |  | ---------------------
|                   |  | September 30,2003    
|                   |  | (Dollars in millions)
|Net revenues:      |  |                      
|Commercial laundry |  | $                    
|Service parts      |  |                      
|                   |  |                      
|                   |  | $                    
|                   |  |                      



12



---

The following table sets forth certain condensed historical financial data for the Company expressed as a
percentage of net revenues for each of the periods indicated:



|                                            |  | Quarter Ended    
|------------------------------------------- |  | -----------------
|                                            |  | September 30,2003
|Net revenues                                |  | 100.0%           
|Cost of sales                               |  | 70.7%            
|Gross profit                                |  | 29.3%            
|Selling, general and administrative expense |  | 12.8%            
|Operating income                            |  | 16.5%            
|Net income                                  |  | 6.7%             



Net revenues.
Net revenues for the quarter ended September 30, 2003 increased $5.3 million, or 8.7%, to $66.6 million from $61.3 million for the quarter ended September 30, 2002. This increase was primarily attributable to higher commercial laundry revenue of
$5.1 million and service parts revenue of $0.2 million. The increase in commercial laundry revenue was due primarily to higher North American equipment revenue of $4.4 million and higher international revenue of $0.6 million. Revenue for North
America was higher to coin-operated laundry customers. Revenue from international customers was higher in Asia and Africa.



Gross profit. Gross profit for the quarter ended September 30, 2003 increased $1.8 million, or 10.2%, to $19.5 million from $17.7 million for the
quarter ended September 30, 2002. This increase was primarily attributable to margins associated with the higher sales volume, lower depreciation expense and a recent price increase, which were partially offset by unfavorable exchange rates related
to foreign purchases and higher utility costs. Gross profit as a percentage of net revenues increased to 29.3% for the quarter ended September 30, 2003 from 28.9% for the quarter ended September 30, 2002.



Selling, general and administrative expense. Selling, general and
administrative expenses for the quarter ended September 30, 2003 increased $0.6 million, or 8.5%, to $8.5 million from $7.9 million for the quarter ended September 30, 2002. The increase in selling, general and administrative expenses was primarily
due to higher sales and marketing expenses of $0.5 million and higher pension costs of $0.4 million. Selling, general and administrative expenses as a percentage of net revenues remained at 12.8% for the quarter ended September 30, 2003 as compared
to the quarter ended September 30, 2002.



Operating
income. As a result of the foregoing, operating income for the quarter ended September 30, 2003 increased $1.1 million, or 11.6%, to $11.0 million from $9.9 million for the quarter ended September 30, 2002. Operating income as a percentage of
net revenues increased to 16.5% for the quarter ended September 30, 2003 from 16.1% for the quarter ended September 30, 2002.



Interest expense. Interest expense for the quarter ended September 30, 2003 decreased $0.6 million, or 7.7%, to $6.5 million from $7.1 million for
the quarter ended September 30, 2002. Interest expense in 2003 includes a favorable non-cash adjustment of $0.2 million to reflect changes in the fair values of an interest rate swap agreement which was entered into in the fourth quarter of 2002.



Loss from early extinguishment of debt. Loss from early
extinguishment of debt for the quarter ended September 30, 2002 was $2.0 million. The Company entered into an amended and restated credit agreement dated as of August 2, 2002. As a result, the Company recorded a loss on early extinguishment of debt
of $2.0 million, to write-off unamortized debt issuance costs related to its prior term loan and revolving credit facilities.



13



---

Net income. As a result of the foregoing, net income for the quarter ended September 30, 2003
increased $3.8 million to net income of $4.5 million as compared to a net income of $0.7 million for the quarter ended September 30, 2002. Net income as a percentage of net revenues increased to 6.7% for the quarter ended September 30, 2003 from
1.2% for the quarter ended September 30, 2002.



The following
table sets forth the Companys historical net revenues for the periods indicated:



|                   |  | Nine Months Ended    
|------------------ |  | ---------------------
|                   |  | September 30,2003    
|                   |  | (Dollars in millions)
|Net revenues:      |  |                      
|Commercial laundry |  | $                    
|Service parts      |  |                      
|                   |  |                      
|                   |  | $                    
|                   |  |                      



The following table
sets forth certain condensed historical financial data for the Company expressed as a percentage of net revenues for each of the periods indicated:



|                                            |  | Nine Months Ended
|------------------------------------------- |  | -----------------
|                                            |  | September 30,2003
|Net revenues                                |  | 100.0%           
|Cost of sales                               |  | 71.1%            
|Gross profit                                |  | 28.9%            
|Selling, general and administrative expense |  | 12.5%            
|Operating income                            |  | 16.4%            
|Net income                                  |  | 4.9%             



Net revenues.
Net revenues for the nine months ended September 30, 2003 increased $9.7 million, or 5.1%, to $198.9 million from $189.2 million for the nine months ended September 30, 2002. This increase was primarily attributable to higher commercial laundry
revenue of $8.7 million and higher service parts revenue of $1.0 million. The increase in commercial laundry revenue was due primarily to higher North American equipment revenue of $7.3 million and higher international revenue of $1.8 million,
partially offset by lower earnings from the Companys equipment financing program of $0.4 million. The increase in North American equipment revenues was primarily due to higher revenues from coin-operated laundry and multi-housing laundry
customers. Revenue from international customers was higher in Europe and Asia.



Gross profit. Gross profit for the nine months ended September 30, 2003 increased $2.6 million, or 4.7%, to $57.4 million from $54.8 million for the nine months ended September 30, 2002. This increase was
primarily attributable to margins associated with the higher sales volume, lower depreciation expense



14



---

and a recent price increase, which were partially offset by unfavorable exchange rates related to foreign purchases,
unfavorable product mix related to sales to drycleaning customers, lower earnings from the Companys off-balance sheet equipment financing program and higher medical costs. Gross profit as a percentage of net revenues decreased to 28.9% for the
nine months ended September 30, 2003 from 29.0% for the nine months ended September 30, 2002.



Selling, general and administrative expense. Selling, general and administrative expenses for the nine months ended September 30, 2003 increased $2.3 million, or 10.3%, to $24.9 million from $22.6 million for
the nine months ended September 30, 2002. The increase in selling, general and administrative expenses was primarily due to higher pension expense of $1.1 million, higher sales and marketing expenses of $0.9 million and higher costs related to the
Companys information systems of $0.3 million. Selling, general and administrative expenses as a percentage of net revenues increased to 12.5% for the nine months ended September 30, 2003 from 11.9% for the nine months ended September 30, 2002.



Operating income.As a result of the foregoing,
operating income for the nine months ended September 30, 2003 increased $0.3 million, or 0.8%, to $32.5 million from $32.2 million for the nine months ended September 30, 2002. Operating income as a percentage of net revenues decreased to 16.4% for
the nine months ended September 30, 2003 from 17.1% for the nine months ended September 30, 2002.



Interest expense. Interest expense for the nine months ended September 30, 2003 increased $1.9 million, or 9.7%, to $21.9 million from $20.0
million for the nine months ended September 30, 2002. Interest expense in 2003 included an unfavorable non-cash adjustment of $1.6 million to reflect changes in the fair values of an interest rate swap agreement.



Loss from early extinguishment of debt. Loss from early extinguishment
of debt for the nine months ended September 30, 2002 was $2.0 million. The Company entered into an amended and restated credit agreement dated as of August 2, 2002. As a result, the Company recorded a loss on early extinguishment of debt of $2.0
million, to write-off unamortized debt issuance costs related to its prior term loan and revolving credit facilities.



Abandoned Canadian public offering costs. In the second quarter of 2002 the Company wrote-off costs incurred while pursuing an initial public
offering through a Canadian Income Trust. Due to market conditions, management determined that such a public offering would not be advantageous to the Company at that time. There were no similar costs in 2003.



Other income (expense), net. Other expense for the nine months ended
September 30, 2003 was $0.8 million. The 2003 costs were associated with the settlement of a lawsuit against a former subsidiary of the Company in Argentina.



Net income. As a result of the foregoing, net income for the nine months ended September 30, 2003 remained unchanged
at $9.7 million as compared to the nine months ended September 30, 2002. Net income as a percentage of net revenues decreased to 4.9% for the nine months ended September 30, 2003 from 5.1% for the nine months ended September 30, 2002.



LIQUIDITY AND CAPITAL RESOURCES



On August 2, 2002 the Company amended and restated its May of 1998 credit agreement with a syndicate of financial
institutions. The new amended and restated credit facility (the Senior Credit



15



---

Facility) is comprised of a term loan facility aggregating $193.0 million (the Term Loan Facility) and
a $45.0 million revolving credit facility (the Revolving Credit Facility). Among other modifications, the amended and restated agreement extends the Senior Credit Facility termination date from May 5, 2003 to August 6, 2007.



The new Senior Credit Facility continues to be subject to certain
financial ratios and tests, similar to those included in the prior facilities. The maximum rates of consolidated debt to EBITDA under the new Senior Credit Facility is scheduled to be reduced from 6.0 at September 30, 2003 to 5.5 at December 31,
2003. Management believes that future cash flows from operations, together with available borrowings under the Revolving Credit Facility, will be adequate to meet the Companys 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 credit facilities.



The Term Loan Facility is also subject to mandatory prepayment with the proceeds of certain debt incurrences, asset sales and a portion of Excess Cash
Flow (as defined in its amended and restated credit agreement dated as of August 2, 2002).



The Companys principal sources of liquidity are cash flows generated from operations and borrowings under its $45.0 million Revolving Credit Facility. The Companys principal uses of liquidity are to meet
debt service requirements, finance the Companys capital expenditures and provide working capital. The Company expects that capital expenditures in 2003 will not exceed $5.0 million. The Company expects the ongoing requirements for debt
service, capital expenditures and working capital will be funded by internally generated cash flow and borrowings under the Revolving Credit Facility.



As of September 30, 2003, the Company has $300.2 million of combined indebtedness outstanding, consisting of outstanding debt of $166.0 million under the
Term Loan Facility, $110.0 million of senior subordinated notes and $23.1 million of junior subordinated notes, $0.6 million of borrowings pursuant to a Wisconsin Community Development Block Grant Agreement and $0.5 million of borrowings pursuant to
an equipment financing transaction with Alliant Energy  Wisconsin Power & Light Company. At September 30, 2003 there were no borrowings under the Companys Revolving Credit Facility. Letters of credit issued on the Companys
behalf under the Revolving Credit Facility totaled $25.0 million at September 30, 2003. As a result, at September 30, 2003 the Company had $20.0 million of its $45.0 million Revolving Credit Facility available subject to certain limitations under
the new Senior Credit Facility. After considering such limitations, which relate primarily to the maximum ratio of consolidated debt to EBITDA, the Company could have borrowed $20.0 million at September 30, 2003 in additional indebtedness under the
Revolving Credit Facility.



The new Term Loan Facility
amortizes quarterly and is repayable in the following aggregate amounts:



|Year |  | AmountDue           
|---- |  | --------------------
|     |  | (Dollars inmillions)
|2003 |  | $                   
|2004 |  | $                   
|2005 |  | $                   
|2006 |  | $                   
|2007 |  | $                   



16



---

The Companys 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, the Company will continue to act as originator and servicer of the equipment financing promissory notes and the trade receivables.



The Companys ability to make scheduled payments of principal or to refinance its indebtedness, or to pay the interest
or liquidated damages, if any thereon, or to fund planned capital expenditures, will depend upon its future performance, which, in turn, is subject to general economic, financial, competitive and other factors that are beyond its control. Based upon
the current level of operations and anticipated growth, management believes that future cash flow from operations, together with available borrowings under the new Revolving Credit Facility, will be adequate to meet the Companys anticipated
requirements for capital expenditures, working capital, interest payments and scheduled principal payments. There can be no assurance, however, that the Companys business will continue to generate sufficient cash flow from operations in the
future to service its debt and make necessary capital expenditures after satisfying certain liabilities arising in the ordinary course of business. If unable to do so, the Company may be required to refinance all or a portion of its existing 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.



Historical



Cash generated from operations for the nine months ended September 30, 2003 of $18.5 million was principally derived from
operations (net income adjusted for depreciation, amortization, non-cash interest) which was partially offset by a higher level of accounts receivable and inventories and lower accounts payable. The working capital investment in accounts receivable
at September 30, 2003 of $7.7 million increased $1.9 million as compared to the balance of $5.8 million at December 31, 2002, which was primarily attributable to the month end timing related to selling accounts receivable through Alliance Laundry
Receivable Warehouse (ALRW), a special-purpose single member limited liability company. Inventories at September 30, 2003 of $27.8 million increased $2.1 million as compared to the balance of $25.7 million at December 31, 2002. Accounts
payable at September 30, 2003 of $10.8 million decreased $3.0 million as compared to the balance of $13.8 million at December 31, 2002.



Net cash provided by operating activities for the nine months ended September 30, 2003 of $18.5 million decreased by $1.8 million as compared to the nine
months ended September 30, 2002. This decrease was primarily due to lower net income adjusted for non-cash charges of $2.2 million, which was partially offset by lower net cash used in changes in assets and liabilities of $0.4 million for the nine
months ended September 30, 2003 as compared to the nine months ended September 30, 2002. The lower net cash impact from changes in assets and liabilities for the nine months ended September 30, 2003 of $0.4 million was largely due to a $3.0 million
decrease in notes receivable held by the Company for the nine months ended September 30, 2003 as compared to an increase of $1.8 million for the same period in 2002. Offsetting the above, the Company increased inventory stocking levels by $2.2
million in 2003, whereas inventory reduction programs in 2002 resulted in a decreased inventory investment of $2.3 million.





17



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Capital Expenditures



The Companys capital expenditures for the nine months ended September 30, 2003 and September 30, 2002 were $3.1 million and $1.8 million,
respectively. Capital spending in both 2003 and 2002 were principally oriented toward product enhancements and manufacturing process improvements.



RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS



In June 2001, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 143,
Accounting for Asset Retirement Obligations. This statement addresses the financial accounting and reporting for obligations associated with the retirement of tangible long-lived assets and the associated asset retirement costs. The
provisions of SFAS No. 143 are effective for fiscal years beginning after June 15, 2002. The Company adopted SFAS 143 effective January 1, 2003. The adoption did not have any impact on the consolidated financial statements.



In November 2002, the FASB issued FASB Interpretation No. (FIN)
45, Guarantors Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others. FIN 45 requires that upon issuance of a guarantee, the guarantor must recognize a liability for the fair
value of the obligation it assumes under that guarantee. In addition, FIN 45 requires additional disclosures about the guarantees that an entity has issued, including a reconciliation of the changes in the entitys product warranty liabilities
during the reporting period. The initial recognition and measurement provisions of FIN 45 are applicable on a prospective basis to guarantees issued or modified after December 31, 2002. The Company adopted the provisions of this statement effective
January 1, 2003. The adoption of the recognition and measurement provisions did not have a material impact on the consolidated financial statements.



During January 2003, the 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. The consolidation provisions of FIN 46 are effective immediately
for interests created after January 31, 2003. For interests created before February 1, 2003, the Company is required to adopt the consolidation provisions no later than December 31, 2003. The Company does not expect the implementation of FIN 46 to
have an effect on its consolidated financial statements as qualifying special-purpose securitization entities are excluded from the consolidation requirements of this Interpretation.



During April 2003, the FASB issued SFAS No. 149, Amendment of Statement 133 on Derivative Instruments and Hedging
Activities, which amends and clarifies financial accounting and reporting for certain derivative instruments modified or entered into after June 30, 2003. Generally, the provisions of SFAS No. 149 are effective beginning July 1, 2003. The
Company adopted SFAS No. 149 effective July 1, 2003. The adoption did not have any impact on the consolidated financial statements.



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 statement is effective for the Company beginning January 1, 2004. The Company
is currently evaluating the impact of the adoption of this statement on its consolidated financial statements.



18



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|ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|------- | ----------------------------------------------------------



The Company is potentially exposed to market risk associated with changes in interest and foreign exchange rates. From time to time the Company may enter
into derivative financial instruments to hedge its 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 the Companys underlying exposures. The Company does not enter into derivatives for speculative purposes. There have been no material changes in the Companys market risk exposures as compared to those discussed in
the Companys Annual Report on Form 10-K (file no. 333-56857).



ITEM
4.    
CONTROLS AND PROCEDURES



(a) The
Company carried out an evaluation within the 90 day period prior to this report, under the supervision and with the participation of the Companys management, including the Companys Chairman and Chief Executive Officer along with the
Companys Chief Financial Officer, of the effectiveness of the design and operation of the Companys disclosure controls and procedures pursuant to Exchange Act Rules 13a-14(c) and 15d-14(c) under the Securities Exchange Act of 1934, as
amended (the Exchange Act). Based upon that evaluation, the Companys Chief Executive Officer along with the Companys Chief Financial Officer concluded that the Companys disclosure controls and procedures (1) are
effective in timely alerting them to material information relating to the Company (including its consolidated subsidiaries) required to be included in the Companys periodic SEC filings and (2) are adequate to ensure that information required
to be disclosed by the Company in the reports filed or submitted by the Company under the Exchange Act is recorded, processed and summarized and reported within the time periods specified in the SECs rules and forms.



(b) There have been no significant changes in the Companys internal
controls or in other factors, including any corrective actions with regard to significant deficiencies and material weaknesses, which could significantly affect internal controls subsequent to the date the Company carried out its 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 of
the Company to differ materially from those expressed or implied by such forward-looking statements. Although the Company believes that its plans, intentions and expectations reflected in such forward-looking statements are based on reasonable
assumptions, it 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 the Companys products abroad;
market acceptance of new and enhanced versions of the Companys products; the impact of substantial leverage and debt service on the Company and other risks listed from time to time in the Companys reports, including but not limited to
the Companys Annual Report on Form 10-K (file no. 333-56857). The Company does not undertake any obligation to update any such forward looking statements unless required by law.



19



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|PART II |  | OTHER INFORMATION                                         
|------- |  | ----------------------------------------------------------
|        | 
|Item 1. |  | Legal Proceedings. See Note 3 to Item 1 in Part I.        
|        | 
|Item 2. |  | Changes in Securities. None.                              
|        | 
|Item 3. |  | Defaults upon Senior Securities. None.                    
|        | 
|Item 4. |  | Submission of Matters to a Vote of Security Holders. None.
|        | 
|Item 5. |  | Other Information.                                        



On September 12, 2003,
Raytheon Company completed the sale of all of its debt and equity interests in the Company to a group of investors consisting of TCW Shared Opportunity Fund IV, L.P., TCW Shared Opportunity Fund IVB, L.P., TCW Shared Opportunity Fund III, L.P., TCW
SHOP III Subsidiary Investment, Inc. and TCW SHOP IV Subsidiary Investment, Inc. (together, the TCW Funds) and Sankaty High Yield Partners II, L.P., Sankaty High Yield Partners III, L.P., Sankaty Credit Opportunities, L.P. and Sankaty
Alliance Corp (together, the Sankaty Funds). The debt consists of the Junior Subordinated Note and the equity interests consist of the Companys Preferred Units, and Raytheons Class A and Class L Common Units. As a result of
this transaction, the Raytheon Junior Subordinated Note was cancelled and new Junior Subordinated Notes were issued under the same terms and conditions as for Raytheon. Raytheon had formerly been the parent of the Company prior to a recapitalization
and merger transaction on May 5, 1998. The Sankaty Funds are an affiliate of Bain/RCL, L.L.C. which, before the sale, owned 55.9% of the outstanding common membership interests of the Company through its ownership of Class A and Class L membership
units in the Company.



On July 23, 2003 the Company amended its
Employment Agreement with Thomas F. LEsperance, President and Chief Executive Officer. Terms and conditions of this Employment Agreement are included within the Exhibits hereto.



On August 1, 2003, the Company amended and restated its Limited Liability 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). The Class M Units have higher priority in any distributions as compared to the Companys Class A, Class B and Class C
Units. These units were issued in return for the Executives present service to the Company and as an incentive for the Executive to continue to provide future services to the Company. These units are subject to certain terms and conditions
which include vesting provisions and repurchase provisions if the Executive is no longer employed by the Company.



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. The
Company has not recognized any compensation expense related to these units. At any such time that these units would be considered to have intrinsic value, the Company would record an appropriate level of compensation expense.



20



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Item 6.    
Exhibits and Reports on Form 8-K.



(a) List of
Exhibits.



|Exhibit |     |  | Description                                                                                                                                                                    
|------- | --- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|        |    
|10.1    |     |  | Amendment No. 1 to Alliance Laundry Systems LLC Employment Agreement, dated as of July 23, 2003 by and between Alliance Laundry Systems LLC and Thomas F.
LEsperance.         
|        |    
|10.2    |     |  | Amendment No. 1 to Alliance Laundry Holdings LLC Securityholders Agreement and Registration Rights Agreement, dated as of July 23, 2003.                                       
|        |    
|10.3    |     |  | Amendment No. 1 to Amended and Restated Limited Liability Company Agreement by Alliance Laundry Holdings LLC, dated as of July 23, 2003.                                       
|        |    
|10.4    |     |  | Amendment No. 1 to Amended and Restated Limited Liability Company Agreement of Alliance Laundry Systems LLC, dated as of July 23, 2003                                         
|        |    
|10.5    |     |  | Alliance Laundry Holdings LLC 2003 Executive Unit Agreement, dated as of August 1, 2003 by and between Alliance Laundry Holdings LLC and Thomas F.
LEsperance.                
|        |    
|10.6    |     |  | Alliance Laundry Holdings LLC 2003 Executive Unit Agreement, dated as of August 1, 2003 by and between Alliance Laundry Holdings LLC and William J. Przybysz.                  
|        |    
|10.7    |     |  | Alliance Laundry Holdings LLC 2003 Executive Unit Agreement, dated as of August 1, 2003 by and between Alliance Laundry Holdings LLC and R. Scott Gaster.                      
|        |    
|10.8    |     |  | Alliance Laundry Holdings LLC 2003 Executive Unit Agreement, dated as of August 1, 2003 by and between Alliance Laundry Holdings LLC and Jeffrey J. Brothers.                  
|        |    
|10.9    |     |  | Alliance Laundry Holdings LLC 2003 Executive Unit Agreement, dated as of August 1, 2003 by and between Alliance Laundry Holdings LLC and Bruce P. Rounds.                      
|        |    
|10.10   |     |  | Amendment No. 2 to Amended and Restated Limited Liability Company Agreement by Alliance Laundry Holdings LLC, dated as of September 12, 2003.                                  
|        |    
|10.11   |     |  | Amendment No. 2 to Securityholders Agreement and Registration Rights Agreement by and among Alliance Laundry Holdings LLC and Bain/RCL, L.L.C., dated as of September 12,
2003.
|        |    
|31      | (a) |  | Certification of Chief Executive Officer                                                                                                                                       
|        |    
|31      | (b) |  | Certification of Chief Financial Officer                                                                                                                                       



(b) Reports on Form 8-K.



On August 7, 2003, Alliance Laundry Holdings LLC (the Company)
issued a press release announcing its earnings for the second quarter ended June 30, 2003.



21



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SIGNATURES



Alliance Laundry Systems
LLC has duly caused this quarterly report to be signed on its behalf by the undersigned, thereto duly authorized, in the city of Ripon, state of Wisconsin, on the 12th day of November 2003.



|Signature                                   |  | Title                                   |  | Date    
|------------------------------------------- |  | --------------------------------------- |  | --------
|                                            |  |                                        
|/S/    THOMAS
LESPERANCEThomas LEsperance |  | Chairman and CEO                        |  | 11-12-03
|                                            |  |                                        
|/S/    BRUCE P. ROUNDSBruce P. Rounds       |  | Vice President, Chief Financial Officer |  | 11-12-03



Alliance Laundry Corp.
has duly caused this quarterly report to be signed on its behalf by the undersigned, thereto duly authorized, in the city of Ripon, state of Wisconsin, on the 12th day of November 2003.



|Signature                                   |  | Title                                   |  | Date    
|------------------------------------------- |  | --------------------------------------- |  | --------
|                                            |  |                                        
|/S/    THOMAS
LESPERANCEThomas LEsperance |  | Chairman and CEO                        |  | 11-12-03
|                                            |  |                                        
|/S/    BRUCE P. ROUNDSBruce P. Rounds       |  | Vice President, Chief Financial Officer |  | 11-12-03



Alliance Laundry
Holdings LLC has duly caused this quarterly report to be signed on its behalf by the undersigned, thereto duly authorized, in the city of Ripon, state of Wisconsin, on the 12th day of November 2003.



|Signature                                   |  | Title                                   |  | Date    
|------------------------------------------- |  | --------------------------------------- |  | --------
|                                            |  |                                        
|/S/    THOMAS
LESPERANCEThomas LEsperance |  | Chairman and CEO                        |  | 11-12-03
|                                            |  |                                        
|/S/    BRUCE P. ROUNDSBruce P. Rounds       |  | Vice President, Chief Financial Officer |  | 11-12-03





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