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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549



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FORM 10-Q



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|x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) of THE SECURITIES EXCHANGE ACT OF 1934
|- | ---------------------------------------------------------------------------------------



For the quarterly period ended March 31, 2005



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 333-102885



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THE BRICKMAN GROUP, LTD.

(Exact name of registrant as specified in its charter)



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|                                                      |  |                                     
|----------------------------------------------------- |  | ------------------------------------
|Delaware                                              |  | 23-2949247                          
|(State of incorporation)                              |  | (I.R.S. Employer Identification No.)
|                                                      | 
|18227 Flower Hill Way, Suite D Gaithersburg, Maryland |  | 20879                               
|(Address of Principal Executive Offices)              |  | (Zip Code)                          



(301) 987-9200

(Registrants Telephone Number, Including Area Code)



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Securities registered pursuant to Section 12(b) of the Act:



None



Securities
registered pursuant to Section 12(g) of the Act:



None



---



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  x    No ̈**



Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule
12b-2 of the Act).    Yes ̈No  x



Indicate the number of shares outstanding of each of the issuers classes of common
stock, as of the latest practicable date. The Brickman Group, Ltd. is a wholly owned subsidiary of Brickman Group Holdings, Inc. None of its, or Brickman Group Holdings, Inc.s, common equity is publicly traded.



|** | The Brickman Group, Ltd. is not currently required by law to file reports under Section 13 or 15(d) of the Securities and Exchange Act of 1934, as amended, because at the beginning
of its current fiscal year its 11.75% senior subordinated notes due 2009 were held of record by less than 300 persons. The Brickman Group, Ltd. is therefore not currently an issuer for purposes of Section 2(a)(7) of the Sarbanes-Oxley
Act of 2002. The Brickman Group, Ltd. voluntarily files quarterly and annual reports on Forms 10-Q and 10-K and current reports on Form 8-K with the Securities and Exchange Commission in compliance with the indenture governing its senior
subordinated notes.
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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##### Table of Contents

TABLE OF CONTENTS



|           |  |                       |  |                                                                                       |  |   
|---------- |  | --------------------- |  | ------------------------------------------------------------------------------------- |  | --
|PART I.    |  | FINANCIAL INFORMATION |  | 1                                                                                    
|           |  | Item 1.               |  | Financial Statements                                                                  |  | 1 
|           |  | Item 2                |  | Managements Discussion and Analysis of Financial Condition and Results of Operations |  | 9 
|           |  | Item 3                |  | Quantitative and Qualitative Disclosures About Market Risk                            |  | 14
|           |  | Item 4.               |  | Controls and Procedures                                                               |  | 15
|           |  |                      
|PART II.   |  | OTHER INFORMATION     |  | 16                                                                                   
|           |  | Item 1.               |  | Legal Proceedings                                                                     |  | 16
|           |  | Item 2.               |  | Unregistered Sales of Equity Securities and Use of Proceeds                           |  | 16
|           |  | Item 3                |  | Defaults Upon Senior Securities                                                       |  | 16
|           |  | Item 4                |  | Submission of Matters to a Vote of Security Holders                                   |  | 16
|           |  | Item 5.               |  | Other Information                                                                     |  | 16
|           |  | Item 6                |  | Exhibits                                                                              |  | 17
|           | 
|SIGNATURES |  | 18                   



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##### Table of Contents

PART I.

FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS



THE
BRICKMAN GROUP, LTD.

BALANCE SHEETS

(dollars in thousands except for share data)



|                                                                                                         |  |                  |          |   |                          |   |          |  
|-------------------------------------------------------------------------------------------------------- |  | ---------------- | -------- | - | ------------------------ | - | -------- | -
|                                                                                                         |  | December 31,2004 |          |   | (Unaudited)March 31,2005 |  
|ASSETS                                                                                                   |  |                  |          |   |                          |   |          |  
|Current assets:                                                                                          |  |                  |          |   |                          |   |          |  
|Cash and cash equivalents                                                                                |  | $                | 11,339   |   |                          | $ | 16,748   |  
|Accounts receivable, net of allowance for doubtful accounts                                              |  |                  | 39,985   |   |                          |   | 34,070   |  
|Unbilled revenue                                                                                         |  |                  | 5,804    |   |                          |   | 10,234   |  
|Deferred tax asset                                                                                       |  |                  | 6,607    |   |                          |   | 6,804    |  
|Other current assets                                                                                     |  |                  | 5,060    |   |                          |   | 6,705    |  
|                                                                                                         |  |                  |          |   |                          |   |          |  
|Total current assets                                                                                     |  |                  | 68,795   |   |                          |   | 74,561   |  
|Property and equipment, net of accumulated depreciation                                                  |  |                  | 29,982   |   |                          |   | 32,875   |  
|Deferred tax asset                                                                                       |  |                  | 1,416    |   |                          |   | 2,057    |  
|Deferred charges, net of accumulated amortization                                                        |  |                  | 6,829    |   |                          |   | 6,468    |  
|Intangible assets, net of accumulated amortization                                                       |  |                  | 84,686   |   |                          |   | 80,560   |  
|Goodwill                                                                                                 |  |                  | 32,663   |   |                          |   | 32,663   |  
|Restricted investments and other assets                                                                  |  |                  | 1,250    |   |                          |   | 1,876    |  
|                                                                                                         |  |                  |          |   |                          |   |          |  
|Total                                                                                                    |  | $                | 225,621  |   |                          | $ | 231,060  |  
|                                                                                                         |  |                  |          |   |                          |   |          |  
|LIABILITIES AND SHAREHOLDERS EQUITY (DEFICIT)                                                           |  |                  |          |   |                          |   |          |  
|Current liabilities:                                                                                     |  |                  |          |   |                          |   |          |  
|Accounts payable                                                                                         |  | $                | 13,937   |   |                          | $ | 13,879   |  
|Deferred revenue                                                                                         |  |                  | 3,441    |   |                          |   | 10,225   |  
|Long-term debt - current portion                                                                         |  |                  | 7,091    |   |                          |   | 7,534    |  
|Accrued interest                                                                                         |  |                  | 740      |   |                          |   | 5,141    |  
|Accrued expenses                                                                                         |  |                  | 18,546   |   |                          |   | 21,643   |  
|                                                                                                         |  |                  |          |   |                          |   |          |  
|Total current liabilities                                                                                |  |                  | 43,755   |   |                          |   | 58,422   |  
|Long-term debt and other liabilities                                                                     |  |                  |          |   |                          |   |          |  
|Long-term debt                                                                                           |  |                  | 178,364  |   |                          |   | 176,148  |  
|Other liabilities                                                                                        |  |                  | 3,495    |   |                          |   | 3,642    |  
|                                                                                                         |  |                  |          |   |                          |   |          |  
|Total liabilities                                                                                        |  |                  | 225,614  |   |                          |   | 238,212  |  
|                                                                                                         |  |                  |          |   |                          |   |          |  
|Commitments and contingencies                                                                            |  |                  |          |   |                          |   |          |  
|                                                                                                         |  |                 
|Shareholders equity (deficit):                                                                          |  |                  |          |   |                          |   |          |  
|Class A voting common stock, $.01 par value; 51,317 authorized, issued and outstanding both periods      |  |                  | 1        |   |                          |   | 1        |  
|Class A non-voting common stock, $.01 par value; 283,548 authorized, issued and outstanding both periods |  |                  | 3        |   |                          |   | 3        |  
|Class B non-voting common stock, $.01 par value; 117,517 authorized, issued and outstanding both periods |  |                  | 1        |   |                          |   | 1        |  
|Class C non-voting common stock, $.01 par value; 75,000 authorized, issued and outstanding both periods  |  |                  | 1        |   |                          |   | 1        |  
|Paid-in capital                                                                                          |  |                  | 187,665  |   |                          |   | 185,725  |  
|Retained earnings (accumulated deficit)                                                                  |  |                  | 3,336    |   |                          |   | (1,883   | )
|Continuing shareholders basis adjustment                                                                |  |                  | (191,000 | ) |                          |   | (191,000 | )
|                                                                                                         |  |                  |          |   |                          |   |          |  
|Total shareholders equity (deficit)                                                                     |  |                  | 7        |   |                          |   | (7,152   | )
|                                                                                                         |  |                  |          |   |                          |   |          |  
|Total liabilities and shareholders equity (deficit)                                                     |  | $                | 225,621  |   |                          | $ | 231,060  |  
|                                                                                                         |  |                  |          |   |                          |   |          |  



The accompanying notes
and the notes to the Companys Audited Financial Statements are an integral part of the financial statements.



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##### Table of Contents

THE BRICKMAN GROUP, LTD.

STATEMENTS OF OPERATIONS

(unaudited)

(dollars in thousands)



|                                    |  |                                     |        |   |      |   |        |  
|----------------------------------- |  | ----------------------------------- | ------ | - | ---- | - | ------ | -
|                                    |  | For the three months endedMarch 31, |       
|                                    |  | 2004                                |        |   | 2005 |  
|Net service revenues                |  | $                                   | 70,399 |   |      | $ | 91,861 |  
|Cost of services provided           |  |                                     | 54,390 |   |      |   | 72,015 |  
|                                    |  |                                     |        |   |      |   |        |  
|Gross profit                        |  |                                     | 16,009 |   |      |   | 19,846 |  
|General and administrative expenses |  |                                     | 15,277 |   |      |   | 17,858 |  
|Amortization expense                |  |                                     | 5,145  |   |      |   | 4,465  |  
|                                    |  |                                     |        |   |      |   |        |  
|Loss from operations                |  |                                     | (4,413 | ) |      |   | (2,477 | )
|Interest expense                    |  |                                     | 4,963  |   |      |   | 5,002  |  
|                                    |  |                                     |        |   |      |   |        |  
|Loss before income taxes            |  |                                     | (9,376 | ) |      |   | (7,479 | )
|Income tax benefit                  |  |                                     | (3,750 | ) |      |   | (2,992 | )
|                                    |  |                                     |        |   |      |   |        |  
|Net loss                            |  | $                                   | (5,626 | ) |      | $ | (4,487 | )
|                                    |  |                                     |        |   |      |   |        |  



The accompanying notes
and the notes to the Companys Audited Financial Statements are an integral part of the financial statements.



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THE BRICKMAN GROUP, LTD.

STATEMENTS OF CASH FLOWS

(unaudited)

(dollars in thousands)



|                                                                                   |  |                                     |        |   |      |   |        |  
|---------------------------------------------------------------------------------- |  | ----------------------------------- | ------ | - | ---- | - | ------ | -
|                                                                                   |  | For the three months endedMarch 31, |       
|                                                                                   |  | 2004                                |        |   | 2005 |  
|Cash flows from operating activities:                                              |  |                                     |        |   |      |   |        |  
|Net loss                                                                           |  | $                                   | (5,626 | ) |      | $ | (4,487 | )
|Adjustments to reconcile net loss to net change in cash from operating activities: |  |                                     |        |   |      |   |        |  
|Depreciation                                                                       |  |                                     | 2,578  |   |      |   | 3,119  |  
|Amortization                                                                       |  |                                     | 5,145  |   |      |   | 4,465  |  
|Deferred taxes                                                                     |  |                                     | (900   | ) |      |   | (838   | )
|Provision for doubtful accounts                                                    |  |                                     | 100    |   |      |   | 905    |  
|Loss on disposal of assets                                                         |  |                                     | 38     |   |      |   | 216    |  
|Changes in operating assets and liabilities, net of businesses acquired            |  |                                     | 13,628 |   |      |   | 13,202 |  
|                                                                                   |  |                                     |        |   |      |   |        |  
|Net change in cash from operating activities                                       |  |                                     | 14,963 |   |      |   | 16,582 |  
|                                                                                   |  |                                     |        |   |      |   |        |  
|Cash flows from investing activities:                                              |  |                                     |        |   |      |   |        |  
|Purchase of property and equipment                                                 |  |                                     | (4,081 | ) |      |   | (6,291 | )
|Cost of acquired businesses                                                        |  |                                     | (4,809 | ) |      |   |       |  
|Proceeds from sale of property and equipment                                       |  |                                     | 224    |   |      |   | 63     |  
|Loan to executive                                                                  |  |                                     |       |   |      |   | (500   | )
|                                                                                   |  |                                     |        |   |      |   |        |  
|Net change in cash from investing activities                                       |  |                                     | (8,666 | ) |      |   | (6,728 | )
|                                                                                   |  |                                     |        |   |      |   |        |  
|Cash flows from financing activities:                                              |  |                                     |        |   |      |   |        |  
|Distributions to Brickman Group Holdings, Inc.                                     |  |                                     | (445   | ) |      |   | (2,672 | )
|Payments on long-term debt                                                         |  |                                     | (6,083 | ) |      |   | (1,773 | )
|                                                                                   |  |                                     |        |   |      |   |        |  
|Net change in cash from financing activities                                       |  |                                     | (6,528 | ) |      |   | (4,445 | )
|                                                                                   |  |                                     |        |   |      |   |        |  
|Net change in cash                                                                 |  |                                     | (231   | ) |      |   | 5,409  |  
|                                                                                   |  |                                    
|Cash, beginning of period                                                          |  |                                     | 15,929 |   |      |   | 11,339 |  
|                                                                                   |  |                                     |        |   |      |   |        |  
|Cash, end of period                                                                |  | $                                   | 15,698 |   |      | $ | 16,748 |  
|                                                                                   |  |                                     |        |   |      |   |        |  



The accompanying notes
and the notes to the Companys Audited Financial Statements are an integral part of the financial statements.



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THE BRICKMAN GROUP, LTD.

Notes to Financial Statements

(Unaudited)

(dollars in thousands except per share amounts)



1. Business:



The Brickman Group, Ltd.
(the Company) performs landscape maintenance, landscape construction and enhancement, and snow removal services for commercial customers in major metropolitan areas in 23 states throughout the United States. Landscape maintenance
services are generally provided under cancelable contracts ranging from 1 to 8 years in length. The Company provides these services to a diverse set of customers with one or more sites, including regional and national commercial, retail, and
industrial property owners, corporations, residential communities, schools and universities, hotels, hospitals, and municipal facilities. Services include grass mowing, planting and care of flower beds, tree and shrub pruning, bed edging,
controlling weed and pests, fertilizing, planting of grass, groundcovers, shrubs and trees, grading, and removing snow and ice.



2. Summary of Significant Accounting Policies:



Basis of Presentation:



The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles (GAAP) for interim financial
statements and on the same basis of presentation as the Companys annual financial statements. Accordingly, they do not include all information required by GAAP.



These financial statements have been prepared by management, are unaudited, and should be read in conjunction with the consolidated
financial statements and notes thereto included in the Companys audited financial statements for the period from January 1, 2002 to December 19, 2002, the period from December 20, 2002 to December 31, 2002, and the years ended December 31,
2003 and 2004. In the opinion of management, all adjustments (consisting of normal recurring accruals and other adjustments) considered necessary for a fair presentation have been included. Due to the seasonality of the Companys business, the
results for the interim periods are not necessarily indicative of the results for the year. Business seasonality results in higher revenues during the second and third quarters as compared with the first and fourth quarters of the year, while the
methods of accounting for fixed costs, such as depreciation and amortization, are not significantly impacted by business seasonality.



Use of Estimates



The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported period. On an ongoing basis, management reviews its estimates, including those related to allowances for doubtful accounts,
revenue recognition, valuation of operating supplies, self-insurance reserves, purchase accounting estimates, useful lives for depreciation and amortization, realizability of deferred tax assets, and litigation based on currently available
information. Changes in facts and circumstances may result in revised estimates and actual results may differ from estimates.



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THE BRICKMAN GROUP, LTD.

Notes to Financial Statements

(Unaudited)

(dollars in thousands except per share amounts)



Recent Accounting Pronouncements:



On December 16, 2004, the FASB issued Statement of Financial Accounting Standards No. 123(R), Shared-Based Payment Compensation (FAS 123(R)). FAS 123(R) revised FASB Statement No. 123,
Shared-Based Compensation (FAS 123) and requires companies to expense the fair value of employee stock options and other forms of stock-based compensation. The Company must adopt FAS 123(R) as of the beginning of the first interim
or annual reporting period beginning after December 15, 2005. The Company is currently assessing the impact this pronouncement will have on its financial position, results of operations and cash flows.



In October 2004, Congress passed the American Jobs Creation Act of 2004 (the
Jobs Creation Act). The Jobs Creation Act includes numerous provisions that may affect business practices and accounting for income taxes. For companies that pay U.S. income taxes on manufacturing activities in the U.S., the Jobs
Creation Act provides a phased-in deduction from taxable income equal to a stipulated percentage of qualified income from domestic production activities. The Jobs Creation Act also provides for a change in the period of application for foreign tax
credits against Alternative Minimum Tax, expanded disallowance of interest on convertible debt and tax shelter disclosure penalties. In December 2004, the FASB issued a FASB Staff Position (FSP) regarding the accounting implications of
the Act related to the deduction for qualified domestic productions activities (FSP 109-1). This guidance applies to financial statements for periods ending after the date the Jobs Creation Act was enacted. The Company is still
evaluating the impact of the Jobs Creation Act and related FASB pronouncement on its financial position, results of operations and cash flows.



3. Accounts Receivable:



Components of accounts receivable are as follows:



|                                |  |                  |        |   |                |   |        |  
|------------------------------- |  | ---------------- | ------ | - | -------------- | - | ------ | -
|                                |  | December 31,2004 |        |   | March 31, 2005 |  
|Accounts receivable             |  | $                | 42,321 |   |                | $ | 37,143 |  
|Allowance for doubtful accounts |  |                  | (2,336 | ) |                |   | (3,073 | )
|                                |  |                  |        |   |                |   |        |  
|Accounts receivable, net        |  | $                | 39,985 |   |                | $ | 34,070 |  
|                                |  |                  |        |   |                |   |        |  



Accounts receivable amounts include
retention on incomplete projects that will be completed within one year of $454 at December 31, 2004, and $403 at March 31, 2005. All other amounts are due currently.



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THE BRICKMAN GROUP, LTD.

Notes to Financial Statements

(Unaudited)

(dollars in thousands except per share amounts)



4. Accrued Expenses:



Accrued expenses
consist of the following:



|                         |  |                   |        |               |   |       
|------------------------ |  | ----------------- | ------ | ------------- | - | ------
|                         |  | December 31, 2004 |        | March 31,2005
|Payroll-related accruals |  | $                 | 8,292  |               | $ | 9,497 
|Self-insurance reserves  |  |                   | 8,014  |               |   | 8,304 
|Other                    |  |                   | 2,240  |               |   | 3,842 
|                         |  |                   |        |               |   |       
|Total accrued expenses   |  | $                 | 18,546 |               | $ | 21,643
|                         |  |                   |        |               |   |       



5. Long-term Debt:



Long-term debt consists of the following:



|                                                                                             |  |                   |         |   |               |   |         |  
|-------------------------------------------------------------------------------------------- |  | ----------------- | ------- | - | ------------- | - | ------- | -
|                                                                                             |  | December 31, 2004 |         |   | March 31,2005 |  
|11.75% Senior subordinated notes due 2009                                                    |  | $                 | 150,000 |   |               | $ | 150,000 |  
|Senior bank facility, due 2008 bearing interest at rates varying from 5.77% to 6.38% in 2005 |  |                   | 35,455  |   |               |   | 33,682  |  
|                                                                                             |  |                   |         |   |               |   |         |  
|Total long-term debt                                                                         |  | $                 | 185,455 |   |               | $ | 183,682 |  
|Less:                                                                                        |  |                   |         |   |               |   |         |  
|Current portion                                                                              |  |                   | (7,091  | ) |               |   | (7,534  | )
|                                                                                             |  |                   |         |   |               |   |         |  
|Long-term debt, net                                                                          |  | $                 | 178,364 |   |               | $ | 176,148 |  
|                                                                                             |  |                   |         |   |               |   |         |  



As of March 31, 2005, there was no
balance outstanding on the Companys revolving portion of its senior credit facility. The term loan portion of the senior credit facility was fixed on LIBOR contracts maturing in June and September of 2005 at a rates varying from 5.77% to
6.38%.



6. Stock-based Compensation:



The Company accounts for stock-based compensation in accordance with the recognition and
measurement principles of Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees, and related interpretations. Accordingly, no compensation expense has been recognized for grants because the exercise price of the
options granted equaled the fair market value of the underlying stock on the dates of grants. Had the Company applied the fair market value based recognition and measurement provisions of FASB statement No. 123 to stock-based compensation, net
income would have decreased as follows:



|                                                                                                                               |  |                                     |        |   |      |   |        |  
|------------------------------------------------------------------------------------------------------------------------------ |  | ----------------------------------- | ------ | - | ---- | - | ------ | -
|                                                                                                                               |  | For the three months endedMarch 31, |       
|                                                                                                                               |  | 2004                                |        |   | 2005 |  
|Net loss, as reported                                                                                                          |  | $                                   | (5,626 | ) |      | $ | (4,487 | )
|Deduct: Total stock-based compensation determined under the fair value based method for all grants, net of related tax effects |  |                                     | 18     |   |      |   | 54     |  
|                                                                                                                               |  |                                     |        |   |      |   |        |  
|Pro forma net income                                                                                                           |  | $                                   | (5,644 | ) |      | $ | (4,541 | )
|                                                                                                                               |  |                                     |        |   |      |   |        |  



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THE BRICKMAN GROUP, LTD.

Notes to Financial Statements

(Unaudited)

(dollars in thousands except per share amounts)



6. Stock-based Compensation, continued:



Options granted in 2003 have an exercise price of $1,000 per share, vest over 5 years, are exercisable through March 30, 2013, and have a weighted average remaining life of 9.25 years. Options granted in 2004 have an exercise price of
$1,200 per share, vest over 5 years, are exercisable through May 30, 2014, and have a weighted average remaining life of 9.42 years. Shares available for future grants under the Option Plan amounted to 5,371 shares at December 31, 2003 and 3,270
shares at December 31, 2004. The Black-Scholes valuation model was used to establish the fair value of the options. Risk free rates of 3.8% and 3.7% at the date of grant were assumed in 2003 and 2004 respectively. No volatility factor was used in
the valuation since Holdings stock is not traded publicly. The expected option term was assumed to be the vesting period of 5 years.



7. Related Party Transactions:



The Company loaned an executive $500 in connection with the executives relocation to the Companys corporate headquarters. The note is a non-interest bearing
loan to be forgiven on an annual basis over the next ten years contingent upon the executives continued employment with the Company. The loan is secured by the executives primary residence.



In the three months ended March 31, 2005, the Company made distributions to our parent
company, Brickman Group Holdings, Inc., totaling $2.7 million. The distributions to our parent company consisted of a distribution for debt service totaling $1.9 million, and distributions to fund parent company stock redemptions from terminated
employees totaling $0.8 million. In the three months ended March 31, 2004, the Company made distributions to our parent company, Brickman Group Holdings, Inc., totaling $0.5 million to fund parent company stock redemptions from terminated employees.



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THE BRICKMAN GROUP, LTD.

Notes to Financial Statements

(Unaudited)

(dollars in thousands except per share amounts)



8. Commitments and Contingencies:



Risk Management: The Company carries general liability, vehicle collision and liability, workers compensation, professional liability, directors and officers liability, and employee health care insurance policies as well as
umbrella liability insurance to cover claims over the liability limits contained in the primary policies.



The Companys insurance programs for workers compensation, vehicle collision and liability, general liability and employee health care contain self-insured retention amounts. Claims in excess of the self-insured
retention amounts are insured at levels considered prudent by management. The Companys accrual for unpaid and incurred but not reported claims under these programs were $8,304 and $8,014 at March 31, 2005 and December 31, 2004, respectively
and is included with accrued expenses in the accompanying Balance Sheets in accordance with Statement of Financial Accounting Standards No. 5, Accounting for Contingencies. While the ultimate outcome of these claims is dependent on future
developments, in managements opinion, recorded accruals are adequate to cover these claims.



Other: There are no other significant commitments or contingencies as of March 31, 2005 that have not already been disclosed.



9. Subsequent Event:



On April 1, 2005, the Company acquired all of the outstanding stock of a Michigan landscaping company in a merger transaction for cash and shares of Brickman Group
Holdings, Inc. (the Companys parent) stock valued at $11.6 million in the aggregate. The principal shareholder of the Michigan landscaping company at the time of the acquisition is also a shareholder of the Companys parent.



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



Note Regarding Forward-Looking Statements



The Managements Discussion and Analysis and other sections of this Form 10-Q may contain forward-looking statements that are based on current
expectations, estimates and projections about the industries in which we operate and our managements beliefs and assumptions. Forward-looking statements in this report include, but are not limited to: (1) statements regarding our belief that
our internal cash flows and borrowings under our credit facility will provide us sufficient liquidity and capital resources and (2) statements regarding managements expectation that various items would not reasonably be expected to have a
material adverse effect on our financial position, results of operations or cash flows. We caution readers that all forward-looking statements are based on assumptions that we believe are reasonable, but are subject to a wide range of risks
including, but not limited to, risks associated with the uncertainty of future financial results, acquisitions and dispositions, additional financing requirements, increased labor costs, loss of customers, ability to manage growth, the seasonal
demand for our services and varying weather conditions, the effect of competitive services on pricing, reliance on key management personnel, the effect of changes in government regulations and immigration law, the outcome of legal proceedings and a
variety of other factors. Due to these and other uncertainties, we cannot assure readers that any forward-looking statements will prove to have been correct. All forward-looking statements are subject to the safe harbor protections created by the
Private Securities Litigation Reform Act of 1995. For further information on these and other risks, see the Risk Factors section of our S-4 Registration Statement filed June 11, 2003, as well as our other filings with the Securities and
Exchange Commission. We assume no obligation to update publicly our forward-looking statements, whether as a result of new information, future events or otherwise.



|Overview | 
|-------- | 



We are one of the largest providers of commercial landscape services in the United States, serving commercial properties in 23 states. We were founded in 1939 and have been continually managed by members of the
Brickman family.



We provide landscape maintenance services,
including lawn care, flower bed planting and care, pruning, leaf removal, weed and pest control, irrigation maintenance, fertilization and mulching, to a diverse set of customers pursuant to maintenance contracts. The vast majority of our customers
use our services at more than one property and include regional and national property owners and managers of office parks, hotels, corporate facilities, retail centers, schools and universities, hospitals, professionally-managed residential
properties and municipal facilities. We also provide snow removal services to our landscape maintenance customers to leverage our infrastructure during the winter months. In addition, we provide our customers with landscape design/build services,
which enhance our technical capabilities and brand recognition.



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Results of Operations



The following table for the three month periods ended March 31, 2004 and 2005 depicts costs as a percentage of revenue.



|                                    |  |                             |   |  |      |  
|----------------------------------- |  | --------------------------- | - |  | ---- | -
|                                    |  | Three Months EndedMarch 31, |  
|                                    |  | 2004                        |   |  | 2005 |  
|Net Service revenue                 |  | 100                         | % |  | 100  | %
|Cost of service                     |  | 77                          | % |  | 78   | %
|Gross profit                        |  | 23                          | % |  | 22   | %
|General and administrative expenses |  | 22                          | % |  | 19   | %
|Amortization                        |  | 7                           | % |  | 5    | %
|Loss from operations                |  | -6                          | % |  | -2   | %
|Interest expense                    |  | 7                           | % |  | 6    | %
|Loss before taxes                   |  | -13                         | % |  | -8   | %
|Income tax provision                |  | -5                          | % |  | -3   | %
|Net loss                            |  | -8                          | % |  | -5   | %



Three Months Ended March 31,
2005 Compared to Three Months Ended March 31, 2004



Revenue.Revenue for the three months ended March 31, 2005 increased $21.5 million, or 30.5%, to $91.9 million from $70.4 million for the same period in 2004. The increase was driven by increases in snow removal revenue of $14.7
million or 51.5% and landscape maintenance services revenue of $7.1 million or 19.1%, offset in part by a $0.3 million decrease in design build services revenue. The increase in snow removal revenues was primarily the result of greater snowfall
amounts in many of our markets in 2005 compared to 2004. The increase in maintenance revenues was primarily the result of new contract sales.



Gross profit.Gross profit for the three months ended March 31, 2005 increased $3.8 million, or 24.0%, to $19.8 million from $16.0 million for the
same period in 2004. The increase in gross profit resulted from the increase in snow removal and landscape maintenance activities described above. Gross margin (gross profit as a percent of revenue) decreased to 21.6% for the three months ended
March 31, 2005 from 22.7% for the same period in 2004. The decrease was the result of a greater percentage of revenue from lower margin snow removal services in 2005 (47.2%) as compared to 2004 (40.7%).



General and administrative expenses.General and administrative
expenses for the three months ended March 31, 2005 increased $2.6 million, or 16.9%, to $17.9 million from $15.3 million for the same period in 2004. General and administrative expenses as a percentage of revenue decreased to 19.4% for the three
months ended March 31, 2005 from 21.7% for the three months ended March 31, 2004 primarily as a result of leveraging higher general and administrative expenses to a larger increase in revenue from snow removal and landscape maintenance revenue in
the three months ended March 31, 2005 compared to the same period in 2004.



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Amortization expense. Amortization expense decreased for the three months ended March 31, 2005 by
$0.6 million to $4.5 million from $5.1 million for the same period in 2004. Amortization expense relates to the customer contracts and relationships intangible asset. Customer contracts and relationships are being amortized on an accelerated basis
over their useful lives of 1 to 14 years.



Loss from
operations.Loss from operations decreased for the three months ended March 31, 2005 by $1.9 million to $2.5 million from $4.4 million for the same period in 2004. The increase in gross profit from snow removal and landscape maintenance
activities, described above, was principally responsible for the decrease.



Interest expense.Interest expense was $5.0 million for the three months ended March 31, 2005 unchanged from the three months ended March 31, 2004. Average debt outstanding decreased to $184.6 million at March
31, 2005 from $192.5 million at March 31, 2004. The weighted average rate of interest on the borrowings increased to 10.8% for the three months ended March 31, 2005 from 10.3% for the same period in 2004.



Income taxes. An income tax benefit was recorded for the three months
ended March 31, 2005 and 2004 at the same effective rate of 40.0%, the expected effective rate for 2005. This rate differs from the federal statutory rate of 35% primarily due to state taxes. We expect to generate taxable income for the year ended
December 31, 2005 and therefore believe the recoverability of the benefit recorded is probable.



Net loss. Net loss decreased for the three months ended March 31, 2005 by $1.1 million to $4.5 million from $5.6 million for the same period in
2004.



Liquidity and Capital Resources



We have historically used internal cash flow from operations and borrowings
under our existing credit facility to fund our operations, capital expenditures and working capital requirements. For the three month periods ended March 31, 2005 and 2004, cash provided by operating activities was $16.6 million and $15.0 million,
respectively. The increase is primarily attributed to improved operating results.



Our capital expenditure requirements are primarily comprised of landscape equipment, trucks and trailers. Our capital expenditures were $6.3 million and $4.1 million, for the three months ended March 31, 2005 and
2004, respectively. The increase in capital expenditures is attributable to new equipment necessary to support strong new sales.



In the three months ended March 31, 2005, net cash used in financing activities was $4.5 million, consisting of debt repayments of $1.8 million, and
distributions to our parent company, Brickman Group Holdings, Inc., totaling $2.7 million. The distributions to our parent company consisted of a distribution for debt service totaling $1.9 million, and distributions to fund parent company stock
redemptions from terminated employees totaling $0.8 million. In the three months ended March 31, 2004, net cash used in financing activities was $6.5 million, primarily consisting of debt repayments of $6.1 million, including a voluntary prepayment
of $5.0 million.



As of March 31, 2005, we had no balance
outstanding on the $30.0 million revolving portion of our senior credit facility and the term loan portion of our senior credit facility was fixed on a 180-day LIBOR contracts expiring in June and September of 2005 at rates varying from 5.77% to
6.38%. As of March 31, 2005, availability on the revolving credit facility, after deducting outstanding letters of credit, was $24.3 million.



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In April 2004, our parent company, Brickman Group Holdings, Inc. borrowed $45.0 million from a group of
lenders. The loan initially bears interest at 5.5% over LIBOR, which is subject to reduction based on our consolidated leverage ratio, and amortizes through November 2009. Our parent company is a holding company and as such will rely on our cash
flow to service this obligation. Principal is due on the note as follows: $4.5 million in 2005, $5.5 million in 2006, $6.5 million in 2007, $7.5 million in 2008, and $19.0 million in 2009.



We believe that our internal cash flows and borrowings under the revolving
portion of our credit facility will provide us with sufficient liquidity and capital resources to meet our current and future financial obligations for the next twelve months, including funding our operations, debt service and capital expenditures
and making distributions to our parent company to enable it to meet its obligations under its loan described above. Our future operating performance will be subject to future economic conditions and to financial, business and other factors, many of
which are beyond our control. If our future cash flow from operations and other capital resources are insufficient to pay our obligations as they may mature or to fund our liquidity needs, including making distributions to our parent company, we may
be forced to reduce or delay our business activities and capital expenditures, sell assets, obtain additional debt or equity capital or restructure or refinance all or a portion of our debt, including our senior subordinated notes, on or before
maturity. We cannot assure you that we would be able to accomplish any of these alternatives on a timely basis or on satisfactory terms, if at all. In addition, the terms of our existing and future indebtedness, including our senior subordinated
notes and our senior credit facility, may limit our ability to pursue any of these alternatives.



Seasonality



Our
landscape business is seasonal. Losses generally occur in the first quarter since, in most of our markets, there is very little landscape revenue to be recognized, however fixed costs (e.g., management and supervisory salaries and benefits, rent,
amortization, depreciation) continue.



Effect of Inflation



Inflation has generally not been a material factor
affecting our business. Our general operating expenses, such as wages and salaries, employee benefits and materials and facilities costs, are subject to normal inflationary pressures.



Critical Accounting Policies



Certain of our accounting policies as discussed below require the application of significant judgment by management in selecting the appropriate estimates
and assumptions for calculating amounts to record in our financial statements. Actual results could differ from those estimates and assumptions, impacting the reported results of operations and our financial position. Our significant accounting
policies are more fully described in the notes to the 2004 Form 10-K. Certain accounting policies, however, are considered to be critical in that they are most important to the depiction of our financial condition and results of operations and their
application requires managements most subjective judgment in making estimates about the effect of matters that are inherently uncertain.



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Goodwill: Goodwill, representing the excess of the cost over the net tangible and identifiable
assets acquired in business combinations, is stated at cost. Goodwill and intangibles with indefinite lives are not amortized but tested for impairment no less frequently than annually. Impairment is measured by comparing the carrying value to fair
value using quoted market prices, a discounted cash flow model, or a combination of both.



Impairment or Disposal of Long-lived Assets: In the event that facts and circumstances indicate that the carrying value of long-lived assets, primarily property and equipment and certain identifiable intangible
assets with defined lives, may be impaired, we perform a recoverability evaluation. If the evaluation indicates that the carrying amount of the asset is not recoverable from the undiscounted cash flows related to the asset, an impairment loss is
recorded for the difference between the carrying amount of the asset and its fair value.



Net Service Revenues:We perform landscape maintenance, landscape construction and enhancement, and snow removal services. Revenue is recognized based upon the service provided and the contract terms.



Landscape maintenance:



We generally provide landscape maintenance services under
annual contracts. We recognize revenue for these services as follows: each month, we divide the actual labor, material, and subcontractor costs estimated incurred on each contract by the total labor, material, and subcontractor costs estimated to be
incurred to complete the contract. The resulting ratio is multiplied by the contract price and the difference between this product and the revenue previously recognized on the contract is recognized as revenue in the month. In the event estimated
total contract costs exceed total contract price, the estimated loss on the contract is accrued in the period in which the loss is identified.



Landscape construction and enhancement:



We generally provide landscape construction and enhancement services under contracts of less than one year. We recognize revenue for these
services as follows: each month, we divide the actual labor, material, and subcontractor costs incurred on each contract by the total labor, material, and subcontractor costs estimated to be incurred to complete the contract. The resulting ratio is
multiplied by the total contract price and the difference between this product and the revenue previously recognized on the contract is recognized as revenue in the month. In the event estimated total contract costs exceed total contract price, the
estimated loss on the contract is accrued in the period in which the loss is identified.



Snow Removal:



We generally provide snow removal services are under time and material contracts. We recognize revenue for these services in the period in which the services are performed.



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The current asset, unbilled revenue, and the current liability, deferred revenue, result from differences
between the timing of billings and the recognition of service revenues on uncompleted contracts.



Risk Management: We carry general liability, vehicle collision and liability, workers compensation, professional liability, directors and
officers liability, and employee health care insurance policies as well as umbrella liability insurance to cover claims over the liability limits contained in the primary policies.



Our insurance programs for general liability, vehicle collision and liability, workers compensation and employee health care
contain self-insured retention amounts. Claims in excess of the self-insurance retention amounts are insured at levels considered reasonable by management. Our accrual for unpaid and incurred but not reported claims under these programs at December
31, 2004 and March 31, 2005 was $8.0 million and $8.3 million, respectively and is included in accrued expenses in the accompanying Balance Sheet in accordance with Statement of Financial Accounting Standards No. 5, Accounting for
Contingencies. While the ultimate amount of these claims is dependent on future developments, in managements opinion recorded accruals are adequate to cover these claims.



Recent Accounting Pronouncements:



On December 16, 2004, the FASB issued Statement of Financial Accounting Standards No. 123(R), Shared-Based Payment Compensation (FAS
123(R)). FAS 123(R) revised FASB Statement No. 123, Shared-Based Compensation (FAS 123) and requires companies to expense the fair value of employee stock options and other forms of stock-based compensation. We must adopt
FAS 123(R) as of the beginning of the first interim or annual reporting period beginning after December 15, 2005. We are currently assessing the impact this pronouncement will have on our financial position, results of operations and cash flows.



In October 2004, Congress passed the American Jobs Creation
Act of 2004 (the Jobs Creation Act). The Jobs Creation Act includes numerous provisions that may affect business practices and accounting for income taxes. For companies that pay U.S. income taxes on manufacturing activities in the U.S.,
the Jobs Creation Act provides a phased-in deduction from taxable income equal to a stipulated percentage of qualified income from domestic production activities. The Jobs Creation Act also provides for a change in the period of application for
foreign tax credits against Alternative Minimum Tax, expanded disallowance of interest on convertible debt and tax shelter disclosure penalties. In December 2004, the FASB issued a FASB Staff Position (FSP) regarding the accounting
implications of the Act related to the deduction for qualified domestic productions activities (FSP 109-1). This guidance applies to financial statements for periods ending after the date the Jobs Creation Act was enacted. We are still
evaluating the impact of the Jobs Creation Act and related FASB pronouncement on our financial position, results of operations and cash flows.



ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK



As of March 31, 2005, there were no changes with regard to market risk that would require further quantitative or qualitative disclosure. For our quantitative and qualitative disclosures about market risk, refer to
Item 7A, Quantitative and Qualitative Disclosures about Market Risk, of our Annual Report on Form 10-K filed March 30, 2005.



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ITEM 4. CONTROLS AND PROCEDURES



As
of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, of the effectiveness of the
design and operation of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based upon this evaluation, our Chief Executive Officer and the Chief Financial Officer concluded that,
as of the end of the period covered by this report, our disclosure controls and procedures are effective to ensure that information required to be disclosed in our periodic SEC reports is recorded, processed, summarized, and reported as and when
required. There have been no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter that have materially affected, or are reasonably likely
to materially affect, our internal control over financial reporting.



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PART II.



OTHER INFORMATION



ITEM 1. LEGAL PROCEEDINGS



We are
from time to time a party to litigation. Generally, such litigation involves claims for personal injury and property damage incurred in connection with operations. We are not currently involved in any litigation that we believe is likely to have a
material adverse effect on our financial condition, results of operations or cash flows arising in the normal course of business.



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.



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ITEM 6. EXHIBITS



|       |  |                                                                                                                                                                                                                                                     
|------ |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number |  | Description                                                                                                                                                                                                                                         
|4.5    |  | Supplemental Indenture, dated as of April 1, 2005, among Brickman Group, LLC, The Brickman Group, Ltd. and J.P. Morgan Trust Company, National Association.                                                                                         
|       | 
|10.24  |  | Agreement and Plan of Merger by and among Brickman Group Holdings, Inc., Brickman Group, LLC, and Brickman Acquisitions Ltd. and the shareholders of Brickman Acquisitions Ltd. dated April 1,
2005.                                                
|       | 
|31.1   |  | Certification by Charles B. Silcox, Chief Financial Officer, pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of Sarbanes-Oxley Act of 2002.                                                                                          
|       | 
|31.2   |  | Certification by Scott W. Brickman, Chief Executive Officer, pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of Sarbanes-Oxley Act of 2002.                                                                                          
|       | 
|32.1   |  | Certification by Charles B. Silcox, Chief Financial Officer, and Scott W. Brickman, Chief Executive Officer, pursuant to Section 1350, Chapter 63 of Title 18, United States Code, as adopted
pursuant to Section 906 of Sarbanes-Oxley Act of 2002.



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SIGNATURES



Pursuant to the requirements of the
Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned duly authorized officer.



|                   |  |                          |  |                                                     
|------------------ |  | ------------------------ |  | ----------------------------------------------------
|                   |  | The Brickman Group, Ltd.
|                   |  | (Registrant)            
|                   |  |                         
|Date: May 12, 2005 |  |                          |  |                                                     
|                   | 
|                   |  | /s/ Charles B. Silcox   
|                   |  | Name:                    |  | Charles B. Silcox                                   
|                   |  | Title:                   |  | Chief Financial Officer                             
|                   |  |                          |  | Principal Financial and Principal Accounting
Officer



18