SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

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Form 10-Q

For the quarterly period ended September 30, 2006OR

For the transition period from  to

Commission File Number 333-102511

BRAND ENERGY & INFRASTRUCTURE SERVICES, INC.(Exact name of registrant as specified in its charter)

|Delaware(State or other jurisdiction of
incorporation or organization) 2505 South Main Street
Kennesaw, GA(Address of principal executive offices) | 13-3909682(I.R.S. Employer
Identification No.) 30144(Zip Code)
|-------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------

Registrant's
telephone number, including area code:(678) 285-1498

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: o            No: ý

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of
"accelerated filer and large accelerated filer" in Rule 12b-2 of the Exchange Act. (Check one):

Large
accelerated filer    o                Accelerated
filer    o                Non-accelerated filer    ý

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes    o                No:    ý

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

|Class of common stock |  | Outstanding at October 31, 2006
|--------------------- |  | -------------------------------
|$.01 par value        |  | 1,000 shares                   



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EXPLANATORY NOTE

This Quarterly Report on Form 10-Q (the "Amendment") amends and restates the consolidated condensed statements of operations and cash
flows for the quarterly period ended September 30, 2005. Registrant has restated these results to correct errors in the accounting for scaffolding equipment transactions as more fully disclosed
in Management's Discussion and Analysis of Financial Condition and Results of Operations and Note 2 to the Consolidated Financial Statements.

INDEX

|PART IFINANCIAL INFORMATION |          |                                                                                                                                   
|---------------------------- | -------- | ----------------------------------------------------------------------------------------------------------------------------------
|                             | Item 1.  |                                                                                                                                   
|                             |          | Condensed Consolidated Statements of Operations (unaudited) for the Three Months and Nine Months Ended September 30, 2005 and 2006
|                             |          | Condensed Consolidated Balance Sheets as of December 31, 2005 and September 30, 2006 (unaudited)                                  
|                             |          | Condensed Consolidated Statements of Cash Flows (unaudited) for the Nine Months Ended September 30, 2005 and 2006                 
|                             |          | Notes to the Condensed Consolidated Financial Statements (unaudited)                                                              
|                             | Item 2.  |                                                                                                                                   
|                             | Item 3.  |                                                                                                                                   
|                             | Item 4.  |                                                                                                                                   
|PART IIOTHER INFORMATION    |          | 61                                                                                                                                
|                             | Item 1.  |                                                                                                                                   
|                             | Item 1A. |                                                                                                                                   
|                             | Item 2.  |                                                                                                                                   
|                             | Item 3.  |                                                                                                                                   
|                             | Item 4.  |                                                                                                                                   
|                             | Item 5.  |                                                                                                                                   
|                             | Item 6.  |                                                                                                                                   
|SIGNATURES                   |          | 64                                                                                                                                

2

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PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

BRAND ENERGY & INFRASTRUCTURE SERVICES, INC. AND SUBSIDIARIES  Condensed Consolidated Statements of Operations  (In thousands)  (Unaudited)

|                                                 |                                   | For the Three Months Ended
September 30, |        | For the Nine Months Ended
September 30, |        
|------------------------------------------------ | --------------------------------- | ---------------------------------------- | ------ | --------------------------------------- | -------
|
|
|Revenues:                                        |                                   |                                          |        |                                         |        
|                                                 | Labor                             |                                          | $      | 87,209                                  |        
|                                                 | Equipment rental                  |                                          |        | 37,097                                  |        
|                                                 | Equipment sales                   |                                          |        | 5,227                                   |        
|                                                 |                                   |                                          |        |                                         |        
|                                                 |                                   | Total revenues                           |        |                                         | 129,533
|Operating expenses:                              |                                   |                                          |        |                                         |        
|                                                 | Labor                             |                                          |        | 73,435                                  |        
|                                                 | Equipment rental                  |                                          |        | 13,266                                  |        
|                                                 | Equipment sales                   |                                          |        | 2,860                                   |        
|                                                 | Divisional operating expenses     |                                          |        | 6,514                                   |        
|                                                 |                                   |                                          |        |                                         |        
|                                                 |                                   | Total operating expenses                 |        |                                         | 96,075 
|                                                 |                                   |                                          |        |                                         |        
|                                                 | Gross profit                      |                                          |        | 33,458                                  |        
|Selling and administrative expenses              |                                   |                                          | 22,304 |                                         |        
|                                                 |                                   |                                          |        |                                         |        
|                                                 | Operating income                  |                                          |        | 11,154                                  |        
|Interest expense                                 |                                   |                                          | 11,096 |                                         |        
|Interest income                                  |                                   |                                          | (76    | )                                       |        
|Foreign currency transaction (gain) loss         |                                   |                                          | (3,053 | )                                       |        
|Loss on interest rate and foreign currency swaps |                                   |                                          |       |                                         |        
|Redeemable preferred stock dividend expense      |                                   |                                          | 945    |                                         |        
|                                                 |                                   |                                          |        |                                         |        
|                                                 | Income (loss) before income taxes |                                          |        | 2,242                                   |        
|Income tax expense                               |                                   |                                          | 1,363  |                                         |        
|                                                 |                                   |                                          |        |                                         |        
|                                                 | Net income (loss)                 |                                          | $      | 879                                     |        
|                                                 |                                   |                                          |        |                                         |        

See
accompanying notes to condensed consolidated financial statements.

3

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BRAND ENERGY & INFRASTRUCTURE SERVICES, INC. AND SUBSIDIARIES  Condensed Consolidated Balance Sheets  (In thousands except share and per share amounts)

|                                               |                                                                                                                                   | December 31, 2005                     |              | September 30, 2006
|---------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------- | ------------ | ------------------
|
|ASSETS                                         |                                                                                                                                   |                                       |              |                   
|CURRENT ASSETS:                                |                                                                                                                                   |                                       |              |                   
|                                               | Cash and cash equivalents                                                                                                         |                                       | $            | 6,310             
|                                               | Trade accounts receivable, net of allowance for doubtful accounts of $6,364 at December 31, 2005 and $8,870 at September 30, 2006 |                                       |              | 117,207           
|                                               | Accrued revenue                                                                                                                   |                                       |              | 6,292             
|                                               | Other current assets                                                                                                              |                                       |              | 12,594            
|                                               |                                                                                                                                   |                                       |              |                   
|                                               |                                                                                                                                   | Total current assets                  |              |                   
|PROPERTY AND EQUIPMENT:                        |                                                                                                                                   |                                       |              |                   
|                                               | Land                                                                                                                              |                                       |              | 5,190             
|                                               | Buildings and leasehold improvements                                                                                              |                                       |              | 6,278             
|                                               | Vehicles and other equipment                                                                                                      |                                       |              | 29,997            
|                                               | Scaffolding and concrete forming and shoring equipment                                                                            |                                       |              | 309,387           
|                                               |                                                                                                                                   |                                       |              |                   
|                                               |                                                                                                                                   | Total property and equipment, at cost |              |                   
|LessAccumulated depreciation and amortization |                                                                                                                                   |                                       | 74,232       |                   
|                                               |                                                                                                                                   |                                       |              |                   
|                                               |                                                                                                                                   | Total property and equipment, net     |              |                   
|GOODWILL                                       |                                                                                                                                   |                                       | 299,461      |                   
|OTHER ASSETS AND INTANGIBLES                   |                                                                                                                                   |                                       | 111,447      |                   
|                                               |                                                                                                                                   |                                       |              |                   
|                                               |                                                                                                                                   |                                       | TOTAL ASSETS |                   
|                                               |                                                                                                                                   |                                       |              |                   

(Continued
on the following page)

4

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BRAND ENERGY & INFRASTRUCTURE SERVICES, INC. AND SUBSIDIARIES  Condensed Consolidated Balance Sheets  (In thousands except share and per share amounts)

|                                                                     |                                                                                | December 31, 2005                          |         | September 30, 2006 |        
|-------------------------------------------------------------------- | ------------------------------------------------------------------------------ | ------------------------------------------ | ------- | ------------------ | -------
|
|LIABILITIES AND STOCKHOLDER'S EQUITY                                 |                                                                                |                                            |         |                    |        
|CURRENT LIABILITIES:                                                 |                                                                                |                                            |         |                    |        
|                                                                     | Short-term bank borrowings                                                     |                                            | $       |                   |        
|                                                                     | Current maturities of long-term debt                                           |                                            |         | 2,904              |        
|                                                                     | Notes payable and capital lease obligations, current portion                   |                                            |         | 370                |        
|                                                                     | Accounts payable and accrued expenses                                          |                                            |         | 79,585             |        
|                                                                     | Deferred revenue                                                               |                                            |         | 3,034              |        
|                                                                     |                                                                                |                                            |         |                    |        
|                                                                     |                                                                                | Total current liabilities                  |         |                    | 85,893 
|LONG-TERM DEBT, less current maturities                              |                                                                                |                                            | 481,694 |                    |        
|NOTES PAYABLE AND CAPITAL LEASE OBLIGATIONS, less current maturities |                                                                                |                                            | 458     |                    |        
|REDEEMABLE PREFERRED STOCK                                           |                                                                                |                                            | 32,337  |                    |        
|DEFERRED INCOME TAXES                                                |                                                                                |                                            | 18,551  |                    |        
|STOCKHOLDER'S EQUITY:                                                |                                                                                |                                            |         |                    |        
|                                                                     | Common stock, $0.01 par value, 1,000 shares authorized, issued and outstanding |                                            |         |                   |        
|                                                                     | Paid-in capital                                                                |                                            |         | 225,833            |        
|                                                                     | Cumulative translation adjustment                                              |                                            |         | 7,248              |        
|                                                                     | Accumulated deficit                                                            |                                            |         | (22,083            | )      
|                                                                     |                                                                                |                                            |         |                    |        
|                                                                     |                                                                                | Total stockholder's equity                 |         |                    | 210,998
|                                                                     |                                                                                |                                            |         |                    |        
|                                                                     |                                                                                | Total liabilities and stockholder's equity |         | $                  | 829,931
|                                                                     |                                                                                |                                            |         |                    |        

See
accompanying notes to condensed consolidated financial statements.

5

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BRAND ENERGY & INFRASTRUCTURE SERVICES, INC. AND SUBSIDIARIES  Condensed Consolidated Statements of Cash Flows  (In thousands)  (Unaudited)

|                                                                       |                                                                            | For the Nine Months Ended September 30,          |                                          
|---------------------------------------------------------------------- | -------------------------------------------------------------------------- | ------------------------------------------------ | -----------------------------------------
|
|
|CASH FLOWS FROM OPERATING ACTIVITIES:                                  |                                                                            |                                                  |                                          
|                                                                       | Net income (loss)                                                          |                                                  | $                                        
|                                                                       | Adjustments to reconcile net income to net cash from operating activities: |                                                  |                                          
|                                                                       |                                                                            | Depreciation and amortization                    |                                          
|                                                                       |                                                                            | Deferred income taxes                            |                                          
|                                                                       |                                                                            | Non-cash interest                                |                                          
|                                                                       |                                                                            | Non-cash compensation                            |                                          
|                                                                       |                                                                            | Redeemable preferred stock dividend expense      |                                          
|                                                                       |                                                                            | Loss on interest rate and foreign currency swaps |                                          
|                                                                       |                                                                            | Foreign currency transaction gain                |                                          
|                                                                       |                                                                            | Gain on sale of used rental equipment            |                                          
|                                                                       |                                                                            | Scaffolding write-off                            |                                          
|                                                                       | Changes in operating assets and liabilities:                               |                                                  |                                          
|                                                                       |                                                                            | Trade accounts receivable, net                   |                                          
|                                                                       |                                                                            | Accrued revenue                                  |                                          
|                                                                       |                                                                            | Other current assets                             |                                          
|                                                                       |                                                                            | Accounts payable and accrued expenses            |                                          
|                                                                       |                                                                            | Deferred revenue                                 |                                          
|                                                                       |                                                                            | Other                                            |                                          
|                                                                       |                                                                            |                                                  |                                          
|                                                                       |                                                                            |                                                  | Net cash provided by operating activities
|                                                                       |                                                                            |                                                  |                                          
|CASH FLOWS FROM INVESTING ACTIVITIES:                                  |                                                                            |                                                  |                                          
|                                                                       | Purchase of property and equipment                                         |                                                  |                                          
|                                                                       | Proceeds from sales of used rental equipment                               |                                                  |                                          
|                                                                       | Payments for acquisitions                                                  |                                                  |                                          
|                                                                       |                                                                            |                                                  |                                          
|                                                                       |                                                                            | Net cash used by investing activities            |                                          
|                                                                       |                                                                            |                                                  |                                          
|CASH FLOWS FROM FINANCING ACTIVITIES:                                  |                                                                            |                                                  |                                          
|                                                                       | Proceeds from issuance of long-term debt                                   |                                                  |                                          
|                                                                       | Proceeds from issuance of redeemable preferred stock                       |                                                  |                                          
|                                                                       | Repayments of long-term debt                                               |                                                  |                                          
|                                                                       | Short-term bank borrowings                                                 |                                                  |                                          
|                                                                       | Payments of deferred financing fees                                        |                                                  |                                          
|                                                                       | Payments on capital lease obligations                                      |                                                  |                                          
|                                                                       |                                                                            |                                                  |                                          
|                                                                       |                                                                            | Net cash provided by financing activities        |                                          
|                                                                       |                                                                            |                                                  |                                          
|NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS                   |                                                                            |                                                  | (584                                     
|IMPACT OF FOREIGN CURRENCY EXCHANGE RATES ON CASH AND CASH EQUIVALENTS |                                                                            |                                                  |                                         
|CASH AND CASH EQUIVALENTS, beginning of period                         |                                                                            |                                                  | 14,408                                   
|                                                                       |                                                                            |                                                  |                                          
|CASH AND CASH EQUIVALENTS, end of period                               |                                                                            | $                                                | 13,824                                   
|                                                                       |                                                                            |                                                  |                                          
|SUPPLEMENTAL CASH FLOW DISCLOSURES:                                    |                                                                            |                                                  |                                          
|                                                                       | Interest paid                                                              |                                                  | $                                        
|                                                                       | Income taxes paid                                                          |                                                  |                                          

See
accompanying notes to condensed consolidated financial statements.

6

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BRAND ENERGY & INFRASTRUCTURE SERVICES, INC. AND SUBSIDIARIES  Notes to the Condensed Consolidated Financial Statements  (Unaudited)  (in thousands except share and per share amounts)

The condensed consolidated financial statements included herein for the periods ended September 30, 2005 and 2006 have been prepared by Brand
Energy & Infrastructure Services, Inc. and its subsidiaries ("Brand" or the "Company") in accordance with accounting principles generally accepted in the United States for interim
financial reporting and with the Securities and Exchange Commissions instructions to the Form 10-Q. In the opinion of management, all adjustments have been made which are of a
normal recurring nature necessary to present fairly the Company's financial position as of September 30, 2006, the results of operations for the three and nine months ended September 30,
2005 and 2006, and cash flows for the nine months ended September 30, 2005 and 2006. Certain information and footnote disclosures have been condensed or omitted for these periods. The results
for interim periods are not necessarily indicative of results for the entire year. The condensed consolidated interim financial statements should be read in conjunction with the consolidated financial
statements and the notes thereto contained in the Company's Annual Report on Form 10-K/A for the year ended December 31, 2005, filed with the Securities and Exchange
Commission on November 2, 2006.

1.     Organization and Business

Brand Energy & Infrastructure Services, Inc. and its subsidiaries ("Brand") are 100% owned by Brand Holdings, LLC (the "LLC"). As of
September 30, 2006, the voting equity interests of the LLC were owned 72.3% by J.P. Morgan Partners and its affiliates ("JPMP"), and 27.7% by other equity investors, on a fully diluted
basis. Brand Services, Inc. is a wholly owned subsidiary of Brand Energy & Infrastructure Services, Inc. All references to "the Company", "we", "us", or "our" mean Brand
Energy & Infrastructure Services, Inc. and its subsidiaries.

Prior
to the acquisition of Aluma (Note 5) in July 2005, the Company operated in one segment, "Work Access Services", providing work access services primarily to refining,
petrochemical, chemical, utility and pulp and paper industries, and to a lesser extent general commercial clients. Work access services are typically provided in connection with periodic, routine
cleaning and maintenance of refineries, chemical plants and utilities, as well as for new construction projects. The Company provides personnel to erect and dismantle scaffolding structures, transport
scaffolding to project sites and supervise and
manage such activities. In addition, the Company rents and occasionally sells scaffolding that is classified as property and equipment on the consolidated balance sheets. The Company maintains a
substantial inventory of scaffolding in the United States and Canada. As a result of the acquisition of the operations of Aluma, the Company also provides engineered forming and shoring
solutions for complex concrete construction projects ranging from pre-engineered technology systems to custom-designed formwork and shoring solutions to meet specific customer needs
(the "Forming and Shoring Services" business). In the U.S. and Canada, pre-engineered technology systems are typically rented to customers on a
project-by-project basis whereas custom-designed formwork and shoring solutions are typically sold to owners or project managers for use on large civil projects, such
as bridges.

The
Company's services are not rendered to or dependent on any single customer or group of customers within the industrial or commercial markets and, therefore, the Company does not
believe a material concentration of credit risk exists.

2.     Restatement Of Previously Issued Financial Statements

In the fourth quarter of 2005, the Company initiated a physical inventory of its scaffolding equipment and reconciled the results of the physical inventory to the
amounts recorded in its books and records. As a

7

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result,
the Company identified $14.0 million of scaffolding equipment assets that no longer physically existed.

The
Company determined that the cause of the $14.0 million in non-existing scaffolding equipment assets was largely attributable to deficiencies in internal controls
over two types of transactions: (i) the Company did not record all scrap and loss transactions that the Company recorded in its perpetual scaffolding equipment records in its general ledger and
fixed asset system, and (ii) the Company did not perform periodic comprehensive reconciliations of its perpetual scaffolding equipment records to amounts recorded in its fixed asset system and
other books and records.

As
of the date of the filing of the Company's Form 10-K on April 11, 2006, the Company could not specifically identify the scaffolding equipment asset
write-offs to distinct fiscal years with any certainty due to the number of transactions, passage of time since many of these transactions have occurred, and the deficiencies in the
documentation and controls over these activities. Accordingly, the full amount of the scaffolding equipment asset write-offs was recorded as a non-cash charge in the fourth
quarter of 2005.

In
mid-2005, the Company began the construction of a "Data Warehouse" to consolidate Company data stored in various individual personal computers and servers at numerous
Company and customer locations so that detailed analysis of that data could be performed on a Company-wide basis. During the second and third quarters of 2006, as part of the "Data
Warehouse" project, the Company's information technology department discovered archived data files that included historical perpetual inventory records. One of the outcomes of that project was that
the Company was able to determine that there was sufficient evidence to allow the Company to identify the $14.0 million scaffolding equipment write-off to distinct
fiscal periods.

On
September 22, 2006, the Company announced that it would re-examine its previously issued financial statements for fiscal 2005 and prior years to determine if it had
properly accounted for a $14.0 million write-off of scaffolding equipment that it had recorded in the fourth quarter of fiscal 2005. On November 1, 2006, the Company
concluded its review and determined that it must restate its previously issued financial statements for the years ended December 31, 2003, 2004 and 2005, and for the interim periods in
fiscal 2005.

The
principal impacts of the restatement were to change the timing of recognition of the non-cash write-offs of scaffolding equipment, to adjust depreciation
expense as a result of the change in timing of scaffolding equipment write-offs, and to adjust the provision for deferred income taxes for these changes. Additionally, because a
significant portion of the $14.0 scaffolding equipment write-off relates to periods prior to October 17, 2002, the restatement also resulted in an increase in goodwill of
$6.9 million. Considering the restatement only impacted the timing of reporting non-cash expenses and deferred income taxes, the restatement did not result in a change in reported
amounts for cash flows from operating activities, cash flows from investing activities and cash flows from financing activities in the related consolidated statements of cash flows, although the
components of cash flows from operating activities were restated.

8

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A
summary of the effects of the restatement on the condensed consolidated balance sheet as of December 31, 2005 is as follows:

|                                        |                                                              | At December 31, 2005                       |        
|--------------------------------------- | ------------------------------------------------------------ | ------------------------------------------ | -------
|
|Current Assets                          |                                                              |                                            |        
|                                        | Cash and cash equivalents                                    |                                            | $      
|                                        | Trade accounts receivable, net                               |                                            |        
|                                        | Accrued revenues                                             |                                            |        
|                                        | Other current assets                                         |                                            |        
|                                        |                                                              |                                            |        
|                                        |                                                              | Total current assets                       |        
|                                        |                                                              |                                            |        
|Property and equipment                  |                                                              |                                            |        
|                                        | Land                                                         |                                            |        
|                                        | Buildings and leasehold improvements                         |                                            |        
|                                        | Vehicles and other equipment                                 |                                            |        
|                                        | Scaffolding and concrete forming and shoring equipment       |                                            |        
|                                        |                                                              |                                            |        
|                                        |                                                              | Total property and equipment at cost       |        
|                                        | Lessaccumulated depreciation and amortization               |                                            |        
|                                        |                                                              |                                            |        
|                                        |                                                              | Total property and equipment, net          |        
|Goodwill                                |                                                              |                                            | 292,601
|Other assets and intangibles            |                                                              |                                            | 111,447
|                                        |                                                              |                                            |        
|                                        |                                                              | Total assets                               |        
|                                        |                                                              |                                            |        
|Current liabilities                     |                                                              |                                            |        
|                                        | Short-term bank borrowings                                   |                                            | $      
|                                        | Current maturities of long-term debt                         |                                            |        
|                                        | Notes payable and capital lease obligations, current portion |                                            |        
|                                        | Accounts payable and accrued expenses                        |                                            |        
|                                        | Deferred revenues                                            |                                            |        
|                                        |                                                              |                                            |        
|                                        |                                                              | Total current liabilities                  |        
|                                        |                                                              |                                            |        
|Long-term debt, less current maturities |                                                              |                                            | 481,694
|                                        |                                                              |                                            |        
|Notes payable, less current maturities  |                                                              |                                            | 458    
|                                        |                                                              |                                            |        
|Redeemable preferred stock              |                                                              |                                            | 32,337 
|                                        |                                                              |                                            |        
|Deferred income taxes                   |                                                              |                                            | 18,556 
|                                        |                                                              |                                            |        
|Stockholder's equity                    |                                                              |                                            |        
|                                        | Common stock                                                 |                                            |        
|                                        | Paid-in capital                                              |                                            |        
|                                        | Cumulative translation adjustment                            |                                            |        
|                                        | Accumulated deficit                                          |                                            |        
|                                        |                                                              |                                            |        
|                                        |                                                              | Total stockholder's equity                 |        
|                                        |                                                              |                                            |        
|                                        |                                                              | Total liabilities and stockholder's equity |        
|                                        |                                                              |                                            |        

9

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A
summary of the effects of the restatement on the condensed consolidated statements of operations for the three and nine months ended September 30, 2005 are presented below:

|                                                 |                               | Three months ended September 30, 2005 |        | Nine months ended September 30, 2005 |        
|------------------------------------------------ | ----------------------------- | ------------------------------------- | ------ | ------------------------------------ | -------
|
|
|Revenue                                          |                               |                                       |        |                                      |        
|                                                 | Labor                         |                                       | $      | 87,209                               |        
|                                                 | Equipment rental              |                                       |        | 37,097                               |        
|                                                 | Equipment sales               |                                       |        | 5,227                                |        
|                                                 |                               |                                       |        |                                      |        
|                                                 |                               | Total revenues                        |        |                                      | 129,533
|                                                 |                               |                                       |        |                                      |        
|Operating expenses                               |                               |                                       |        |                                      |        
|                                                 | Labor                         |                                       |        | 73,435                               |        
|                                                 | Equipment rental              |                                       |        | 13,537                               |        
|                                                 | Equipment sales               |                                       |        | 2,860                                |        
|                                                 | Divisional operating expenses |                                       |        | 6,514                                |        
|                                                 |                               |                                       |        |                                      |        
|                                                 |                               | Total operating expenses              |        |                                      | 96,346 
|                                                 |                               |                                       |        |                                      |        
|                                                 |                               | Gross profit                          |        |                                      | 33,187 
|Selling and administrative expenses              |                               |                                       | 22,304 |                                      |       
|                                                 |                               |                                       |        |                                      |        
|                                                 |                               | Operating income                      |        |                                      | 10,883 
|Interest expense                                 |                               |                                       | 11,096 |                                      |       
|Interest income                                  |                               |                                       | (76    | )                                    |       
|Foreign currency gain                            |                               |                                       | (3,053 | )                                    |       
|Loss on interest rate and foreign currency swaps |                               |                                       |       |                                      |       
|Redeemable preferred stock dividend expense      |                               |                                       | 945    |                                      |       
|                                                 |                               |                                       |        |                                      |        
|                                                 |                               | Income (loss) before taxes            |        |                                      | 1,971  
|Income tax expense                               |                               |                                       | 1,260  |                                      | 103    
|                                                 |                               |                                       |        |                                      |        
|                                                 |                               | Net income (loss)                     |        | $                                    | 711    
|                                                 |                               |                                       |        |                                      |        

3.     Summary of Significant Accounting Policies

Basis of Presentation

The accompanying condensed consolidated financial statements are prepared on a consolidated basis and include those assets, liabilities, revenues and expenses
directly attributable to the operations of the Company. All significant intercompany balances and transactions have been eliminated in consolidation.

The
preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.

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Revenue Recognition

The Company rents equipment under month-to-month rental contracts and provides services under both fixed-fee and
time-and-materials short-term contracts. Services provided on a fixed-fee basis are recognized over the contractual period based upon the percentage of
completion method. Percentage of completion is measured by the percentage of costs incurred for work completed to total estimated costs for each contract. Any losses on contracts are recognized in
full in the period it becomes evident that such losses will occur. Services provided on a time-and-materials basis are recognized when earned as services are performed.

The
Company periodically sells new scaffolding and concrete forming and shoring equipment directly to third parties. The Company recognizes revenue upon shipment and records as operating
expense, the cost of the scaffolding or concrete forming and shoring equipment sold on the first-in first-out cost method. The Company periodically sells used scaffolding and
concrete forming and shoring equipment to third parties, primarily to its rental customers. The Company recognizes revenue for the proceeds of such sales and records as operating expense, the net book
value of the scaffolding or concrete forming and shoring equipment. Net book value is determined assuming the oldest is sold first, as the Company maintains inventory records on a group basis.

Cash and Cash Equivalents

The Company considers all cash and short-term deposits which are highly liquid in nature and have an original maturity of three months or less to be
cash and cash equivalents.

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Accrued Revenue

Accrued
revenue represents work performed which either due to contract stipulations or lacking contractual documentation requirements could not be billed. Substantially all unbilled amounts are
expected to be billed and collected within one year.

Inventories

The
Company maintains minimal amounts of finished goods inventories for sales to customers. Inventories are accounted for using the first-in first-out (FIFO)
cost method.

Property and Equipment

Property
and equipment (including major repairs and improvements that extend the useful life of the asset) are capitalized and stated at cost. Ordinary maintenance and repairs of equipment are charged
to expense as incurred. The cost of property and equipment is depreciated over its estimated useful life on the straight-line method as follows:

|Buildings                                     |  | 10 to 30 years                                                               
|--------------------------------------------- |  | -----------------------------------------------------------------------------
|Vehicles and other equipment                  |  | 3 to 8 years                                                                 
|Scaffolding and forming and shoring equipment |  | 2 to 20 years                                                                
|Leasehold improvements                        |  | Life of the applicable lease or life of the improvement, whichever is shorter

For the three and nine months ended September 30, 2005 and 2006, depreciation expense was $7,456 (as restated) and $9,598, and $18,008
(as restated) and $28,419, respectively.

Impairment Review Policies

The
Company accounts for its long-lived assets, excluding goodwill and trade names, in accordance with Statement of Financial Accounting Standards No. 144, "Accounting
for the Impairment or Disposal of Long-Lived Assets" (SFAS 144), which requires the Company to assess the recoverability of these assets when events or changes in
circumstances indicate that the carrying amount of the long-lived asset (group) might not be recoverable. If impairment indicators exist, the Company determines whether the projected
undiscounted cash flows will be sufficient to cover the carrying value of such assets. This requires the Company to make significant judgements about the expected future cash flows of the asset group.
The future cash flows are dependent on general and economic conditions and are subject to change.

Goodwill
and intangible assets with indefinite lives are not amortized but tested for impairment at the reporting unit level. SFAS 142 defines a reporting unit as an operating segment or one
level below an operating segment (referred as a component). A component of a segment is a reporting unit if the component constitutes a business for which discrete financial information is available
and segment management regularly reviews the operating results of that segment. Accordingly, the Company performs the impairment test on goodwill and intangible assets with indefinite lives at the
operating segment for its Scaffolding Services business and its Forming and Shoring Services business. These impairment tests are performed on an annual basis as of October 1 and between annual
tests whenever events or circumstances indicate that the carrying value of a reporting unit's goodwill and intangible assets with indefinite lives may exceed its fair value. A discounted cash flow
model is used to estimate the fair value of a reporting unit. Management must make significant judgments and estimates about future conditions to estimate future cash flows. Unforeseen events and
changes in circumstances and market conditions including general economic and competitive conditions, could result in significant changes in those estimates and material charges to income.

12

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Deferred Revenue

Deferred
revenue represents amounts billed or collected from customers in excess of revenues contractually earned. All of these amounts will be earned within one year.

Workers' Compensation and Health Benefit Liabilities

The
estimates of workers' compensation and health benefit liabilities are developed using actuarial methods based upon historical data for payment patterns, cost trends, utilization of health care
services and other relevant factors. These estimates take into account incurred but not reported (IBNR) claims. These estimates are continually reviewed and adjustments, if necessary, are reflected in
the period known.

Foreign Currency Translation

The
financial statements of the Company's subsidiaries outside the United States are measured using the local currency as the functional currency. Assets and liabilities of these subsidiaries
are translated at the exchange rates as of the balance sheet date. Resulting translation adjustments are recorded in the cumulative translation adjustment account as a separate component of other
comprehensive income (loss). Income and expense items are translated at average monthly exchange rates. Gains and losses from foreign currency transactions are included in net income (loss). The
Company does not have any subsidiaries outside the United States located in highly inflationary economies.

4.     New Accounting Standards

Statement of Financial Accounting Standards No. 123 (revised 2004), Shared-Based Payment" ("SFAS 123R")

In
December 2004, the Financial Accounting Standards Board (FASB) issued SFAS 123R which is a revision of SFAS 123, "Accounting for Stock-Based Compensation". SFAS 123R
supersedes APB Opinion No. 25, "Accounting for Stock Issued to Employees", and amends SFAS 95, "Statement of Cash Flows". Generally, the approach in SFAS 123R is similar to
the approach described in SFAS 123. However, SFAS 123R requires all share-based payments to employees, including grants of employee stock options, to be recognized in the statement of
operations based on their fair values.

In
March 2005, the Securities and Exchange Commission (SEC) issued Staff Accounting Bulletin No. 107 (SAB 107) which summarizes the views of the SEC staff regarding the
interaction between SFAS 123R and certain SEC rules and regulations. SAB 107 provides guidance on several topics including: valuation methods, the classification of compensation expense,
capitalization of compensation costs related to share-based payment arrangements, the accounting for income tax effects of share-based payment arrangements, and disclosures in Management's Discussion
and Analysis subsequent to adoption of SFAS 123R.

In
April 2005, the SEC issued FR-74, "Amendment to Rule 4-01(a) of Regulation S-X Regarding the Compliance Date for Statement of Financial
Accounting Standards No. 123 (Revised 2004),Share-Based Payment" (FR-74). FR-74 allows companies to implement
SFAS 123R at the beginning of their next fiscal
year (January 1, 2006 for the Company), instead of the next reporting period that begins after September 15, 2005. FR-74 does not change the accounting required by
SFAS 123R, it only changes the implementation date of the standard.

The
Company adopted Statement 123(R) using the modified-prospective method on January 1, 2006 and, as further discussed in Note 14, it did not have a material impact on the Company's
financial position, results of operations or cash flows.

SFAS No. 151, "Inventory Costs, an amendment of ARB No. 43, Chapter 4" ("SFAS 151")

In
November 2004, the FASB issued SFAS 151, which amended Accounting Research Bulletin No. 43, Chapter 4, "Inventory Pricing" (ARB 43). SFAS 151 clarifies
that abnormal amounts of idle facility expense, freight, handling costs and wasted materials (spoilage) should be expensed rather than capitalized

13

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as
inventory. The provisions of SFAS 151 are applicable to inventory costs incurred during fiscal years beginning after September 15, 2005 (as of January 1, 2006 for the
Company) with earlier application permitted. The Company implemented SFAS 151 effective January 1, 2006, and it did not have a material impact on the Company's financial position,
results of operations or cash flows.

SFAS No. 154, "Accounting Changes and Error Corrections, a replacement of APB Opinion No. 20 and FASB Statement No. 3"
("SFAS 154")

In
May 2005, the FASB issued SFAS 154. SFAS changes the requirements for the accounting and reporting of a change in accounting principle or correction of an error. It establishes,
unless impracticable, retrospective application of the required method for reporting a change in accounting principle in the absence of explicit transition requirements specific to the newly adopted
accounting principle. SFAS 154 is effective for accounting changes and correction of errors made in fiscal years beginning after December 15, 2005. The Company implemented
SFAS 154 effective January 1, 2006, and it did not have a material impact on the Company's financial position, results of operations or cash flows.

FASB Interpretation No. 47, "Accounting for Conditional Asset Retirement Obligations, an interpretation of FASB Statement No. 143"
("FIN 47")

In
March 2005, the FASB issued FIN 47 which clarifies that the term "conditional asset retirement obligation" as used in SFAS No. 143, "Accounting for Asset
Retirement Obligations" ("SFAS 143"), refers to a legal obligation to perform an asset retirement activity in which the timing and/or method of settlement are conditional on a future event that
may or may not be within the control of the entity. The obligation to perform the asset retirement activity is unconditional even though uncertainty exists about the timing and/or method of
settlement. Accordingly, an entity is required to recognize a liability for the fair value of a conditional asset retirement obligation, if the fair value of the liability can be reasonably estimated.
The fair value of a liability for the conditional asset retirement obligation should be recognized when incurred, generally upon acquisition, construction, or development and/or through the normal
operation of the asset. Uncertainty about the timing and/or method of settlement of a conditional asset retirement obligation should be factored into the measurement of the liability when sufficient
information exists. FIN 47 also clarifies when an entity would have sufficient information to reasonably estimate the fair value of an asset retirement obligation. The Company implemented
FIN 47 as of December 31, 2005 and it did not have a material impact on the Company's financial position, results of operations, or cash flows.

SFAS No. 155, "Accounting for Certain Hybrid Financial InstrumentsAn Amendment of FASB Statements No. 133 and 140"
("SFAS 155")

In
February 2006, the FASB issued SFAS 155, which amends SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities" ("SFAS 133"), and
SFAS No. 140, "Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities". SFAS 155 addresses several issues relating to accounting for
financial instruments, including permitting fair value measurement of any hybrid financial instrument that contains an embedded derivative and eliminating the prohibition on a qualifying
special-purpose entity from holding certain derivative instruments. SFAS 155 also provides clarification that concentrations of credit risk in the form of subordination are not embedded
derivatives. SFAS 155 is effective for all financial instruments issued or acquire after the fiscal year that begins after September 15, 2006 (January 1, 2007 for the Company),
with earlier application permitted. The Company has not yet determined the timing of adoption or the full impact of SFAS 155; however, it is not expected to materially impact the Company's
financial position, results of operations or cash flows.

FASB Interpretation No. 48, "Accounting for Uncertainty in Income Taxes" ("FIN 48")

In
September 2006, the FASB issued FASB Interpretation No. 48, "Accounting for Uncertainty in Income Taxes." The interpretation clarifies the accounting for uncertainty in income
taxes recognized in a company's financial statements in accordance with Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes." Specifically, the
pronouncement prescribes a recognition threshold and a

14

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measurement
attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The interpretation also provides guidance on the related
derecognition, classification, interest and penalties, accounting for interim periods, disclosure and transition of uncertain tax positions. The interpretation is effective for fiscal years beginning
after December 15, 2006. The Company has not yet determined the full impact of FASB Interpretation No. 48; however, it is not expected to materially impact the Company's financial
condition, results of operations or cash flows.

SFAS No. 157, "Fair Value Measurements" ("SFAS 157")

In
September 2006, the FASB issued SFAS 157. SFAS 157 does not address "what" to measure at fair value; instead, it addresses "how" to measure fair value. SFAS 157 applies
(with limited exceptions) to existing standards that require assets or liabilities to be measured at fair value. SFAS 157 establishes a fair value hierarchy, giving the highest priority to
quoted prices in active markets and the lowest priority to unobservable data and requires new disclosures for assets and liabilities measured at fair value based on their level in the hierarchy.
SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007. The Company is currently evaluating the impact of adopting SFAS 157.

Staff Accounting Bulletin No. 108, "Considering the Effects of Prior Year Misstatements When Quantifying Mistatements in Current Year Financial Statements"
("SAB 108")

In
September 2006, the Securities and Exchange Commission issued Staff Accounting Bulletin No. 108 ("SAB 108"), which becomes effective for the Company for the year ended
December 31, 2006. SAB 108 provides guidance on the consideration of the effects of prior period misstatements in quantifying current year misstatements for the purpose of a materiality
assessment. SAB 108 requires an entity to evaluate the impact of correcting all misstatements, including both the carryover and reversing effects of prior year misstatements, on current year
financial statements. If a misstatement is material to the current year financial statements, the prior year financial statements should also be corrected, even though such revision was, and continues
to be, immaterial to the prior year financial statements. Correcting prior year financial statements for immaterial errors would not require previously filed reports to be amended. Such correction
should be made in the current period filings.

5.     Acquisitions

On
July 29, 2005, the Company purchased substantially all of the operations and the net operating assets of Aluma Enterprises, Inc. ("Aluma"), as defined by the terms of the Asset
Purchase Agreement dated May 19, 2005. The purpose of the transaction was to expand the Company's market position in Canada and obtain entry into the forming and shoring business. The results
of Aluma are included in the Company's consolidated financial statements from the date of the acquisition. The purchase price paid for this acquisition was $241.4 million, consisting of cash
paid of $211.4 million, direct acquisition costs of $6.1 million, and assumed liabilities of $23.9 million. The acquisition was principally financed through borrowings under the
Company's amended and restated secured credit facility (Note 11) and through the issuance of the Company's redeemable preferred stock (Note 12). The Company obtained an
independent third-party valuation of tangible and identifiable intangible assets, which consists of patents, trademarks and customer relationships totaling $42.6 million. The excess of the
total purchase price over the fair value of the assets acquired, including the value of the identifiable intangible assets, was $45.0 million and has been allocated to goodwill. All of the
goodwill arising in the Aluma acquisition has been assigned to the work access services segment. The Company is amortizing customer relationships over twelve years and patents over the life of the
related patent. Trademarks will not be amortized as this intangible asset has an indefinite life.

On
August 3, 2006, the Company purchased substantially all of the operations and the net operating assets of Interstate Scaffolding, Inc. ("Interstate"), as defined by the terms of the
Asset Purchase Agreement dated July 14, 2006. The purpose of the transaction was to expand the Company's geographic presence on the West Coast, the Mid-West, and the Northeast and
to augment the Company's customer base in the oil

15

---



refining
and utilities industries. The results of Interstate are included in the Company's consolidated financial statements from the date of the acquisition. The purchase price paid for this
acquisition was $34.7 million, consisting of cash paid of $31.3 million, direct acquisition costs of $0.4 million, and assumed liabilities of $3.0 million. The acquisition
was financed through borrowings on the revolving facility under the Company's amended and restated secured credit facility (Note 11). The Company obtained an independent third-party valuation
of tangible and identifiable intangible assets, which consists of non-compete agreements, trademarks and customer relationships totaling $5.5 million. The excess of the total
purchase price over the fair value of the assets acquired, including the value of the identifiable intangible assets, was $7.4 million and has been allocated to goodwill. The Company is
amortizing customer relationships over twelve years and non-compete agreements over the life of the related agreement. Trademarks will not be amortized as this intangible asset has an
indefinite life.

The
following unaudited pro forma information assumes the acquisition of Aluma and Interstate occurred as of the beginning of fiscal 2005. The pro forma results are not necessarily
indicative of what actually would have occurred had the acquisition been in effect for the periods presented. In addition, they are not intended to be a projection of future results that may be
achieved from the combined operations.

|                                  |  | Three Months
Ended September 30, |         | Nine Months
Ended September 30,
|--------------------------------- |  | -------------------------------- | ------- | -------------------------------
|
|
|Revenue                           |  | $                                | 159,120 |                                
|Operating income                  |  |                                  | 7,791   |                                
|Income (loss) before income taxes |  |                                  | (3,344  | )                              
|Net income (loss)                 |  |                                  | (1,803  | )                              
|                                  |  |                                  |         |                                

16

---



6.     Other Current Assets

Other current assets consist of the following:

December 31, 2005

September 30, 2006Prepaid expenses

$
4,708

$
4,727Inventory


7,487


8,576Other


399


751$
12,594

$
14,054


7.     Allowance for Doubtful Accounts

The Company's accounts receivable are recorded at the amounts invoiced to customers less an allowance for doubtful accounts. Management estimates the allowance
based on a review of the portfolio taking into consideration historical collection patterns, the economic climate, and aging statistics based on contractual due dates. Accounts are written off once
collection efforts are exhausted.

Activity
in the allowance for doubtful accounts for the nine months ended September 30, 2005 and 2006 are as follows:

Nine Months Ended September 30, 2005

Nine Months Ended September 30, 2006Balance at beginning of year

$
1,605

$
6,364Additions charged to operating expenses


1,379


4,199Allowance for doubtful accounts of acquired companies


2,638


406Impact of foreign currency translation


120


75Net write-offs


(1,622
)

(2,174
)Balance at September 30

$
4,120

$
8,870


8.     Goodwill

Goodwill represents the amount paid in connection with the Transaction and acquisitions in excess of the fair value of the identifiable net assets acquired. The
Company completed its annual required impairment test as of October 1, 2005, and in doing so determined that goodwill was not impaired. The Company used the present value of expected future
cash flows to estimate fair value. The Company must make significant judgments about future conditions to estimate future cash flows. Unforeseen events and changes in circumstances and market
conditions including general economic and competitive conditions, could result in significant changes in those estimates and material charges to income. All
goodwill has been assigned to the work access services business segment. Changes in the carrying amount of goodwill for the nine months ended September 30, 2006 (as restated) are
as follows:

Balance at December 31, 2005

$
299,461Goodwill acquired


7,703Reclassification


1,432Foreign currency translation


2,354Balance at September 30, 2006

$
310,950


17

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Approximately
$48.1 million of the goodwill recorded at September 30, 2006 is amortizable over 15 years for tax purposes.

9.     Other Assets and Intangibles

Other assets and intangibles consist of the following:

December 31, 2005

September 30, 2006Deferred financing costs, net of accumulated amortization of $4,608 in 2005 and $6,161 in 2006

$
14,633

$
15,620Customer relationships


70,630


71,285Trade names


25,566


25,975Patents


281


274Non-compete agreement


210


821Pre-paid IPO expenses





2,666Other


127


126$
111,447

$
116,767


In
connection with the issuance of its credit facility (Note 11), the $150.0 million, 12% Senior Subordinated Notes (Note 11), the $35.0 million, 13%,
pay-in-kind notes (Note 11) and the redeemable preferred stock (Note 12), the Company incurred financing fees and expenses that were deferred and are being
amortized over the lives of the individual debt instruments. For the nine months ended September 30, 2005 and 2006, amortization expense relating to these deferred financing costs was $1,261
and $1,553, respectively. Amortization of deferred financing costs is included as an element of interest expense in the consolidated statement of operations.

Customer
relationships, trade names, non-compete agreements and patents were recorded at their fair values as a result of the Transaction and the acquisitions of Aluma and
Interestate. The fair values assigned to customer relationships, trade names and patents were based on the future discounted cash flows that are expected to result from the respective intangible
existing at the date of the respective transaction. Customer relationships are being amortized over twelve years.
Amortization expense relating to customer relationships for the nine months ended September 30, 2005 and 2006 was $3,817 and $5,525, respectively. Trade names are not amortized as this type of
intangible asset has an indefinite life. Patents are amortized over the life of the respective patent. Amortization expense related to patents for the nine months ended September 30, 2005 and
2006 was $3 and $13, respectively. Amortization expense related to the non-compete agreements was $60 and $78 for the nine months ended September 30, 2005 and 2006, respectively.

The
following summarizes the balances of intangibles as of December 31, 2005 and September 30, 2006:

|                                 |                        | December 31, 2005 |   | September 30, 2006
|-------------------------------- | ---------------------- | ----------------- | - | ------------------
|
|Amortizable intangible assets:   |                        |                   |   |                   
|                                 | Customer relationships |                   | $ | 86,355            
|                                 | Non-compete agreement  |                   |   | 1,357             
|                                 | Patents                |                   |   | 288               
|Unamortizable intangible assets: |                        |                   |   |                   
|                                 | Trade names            |                   |   | 25,566            

18

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Aggregate
amortization expense for the nine months ended September 30, 2005 and 2006 was $3,880 and $5,616, respectively.

10.   Accounts Payable And Accrued Expenses

The major components of accounts payable and accrued expenses are as follows:

December 31, 2005

September 30, 2006Accounts payable

$
21,638

$
24,184Payroll and related accruals


24,979


29,768Workers' compensation and health benefit liabilities


16,029


17,613Accrued interest


4,785


10,116Other


12,154


19,186$
79,585

$
100,867


11.   Long-Term Debt

Long-term debt consisted of the following:

December 31, 2005

September 30, 2006Amended Credit Facility, due 2012

$
288,959

$
289,48312% Senior Subordinated Notes, due 2012


150,000


150,00013% Intermediate Subordinated Notes, due 2013


52,457


57,616491,416


497,099LessCurrent maturities


2,904


2,931Unamortized discount


6,818


6,378$
481,694

$
487,790


On
July 29, 2005, the Company amended and restated its existing credit facility with Credit Suisse (formerly known as Credit Suisse First Boston, acting through its Cayman Islands
Branch), as administrative agent, and other institutions, to provide for supplemental term loans in the aggregate principal amount of $185 million. As amended and restated, the credit facility
consists of $287 million in aggregate principal amount of term loans, a letter of credit facility of $20 million, a synthetic letter of credit facility of $15 million and a
revolving credit facility of $50 million. The supplemental term loan included $57 million of debt in Canadian dollar equivalents.

On
August 3, 2006 the Company further amended its amended credit facility to provide for, among other things, (i) an increase in the revolving loan facility to
$100.0 million, (ii) the establishment of an uncommitted incremental term facility pursuant to which we will be entitled to incur additional dollar-denominated term loans in an aggregate
principal amount of up to $25.0 million and (iii) an amendment to the restrictions on acquisitions contained therein that would permit the Company to make acquisitions in an aggregate
amount of up to $70.0 million during the 2006 fiscal year.

Indebtedness
under the credit facility for US dollar loans bears interest at a floating rate based upon (i) the Base Rate (as defined in the credit agreement) in each case,
plus 2.25%, in the case of revolving loans, currently 2.75%, in the case of letter of credit facility loans, or 1.25%, in the case of synthetic letter

19

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of
credit facility loans and term loans, or, at The Company's option, (ii) the LIBOR Rate (as defined in the credit agreement) for one, two, three or nine month period, (or a nine
or twelve month period if, at the time of the relevant LIBOR Rate Loan, all Lenders participation therein agree to make an interest period of such duration available) plus 3.50%, in the case of
revolving loans, 4.00%, in the case of letter of credit facility loans or 2.25%, in the case of synthetic letter of credit facility loans and term loans. Indebtedness under the credit facility for
Canadian dollar loans bears interest at (i) in the case of Canadian prime rate loans, a floating rate based upon the Canadian Prime Rate (as defined in the credit agreement), plus 2.25%
or, at our option, (ii) in the case of bankers' acceptance loans, Brand will pay a fee at the rate of 3.25% calculated on the basis of a year of 365 days on the face amount at maturity
(or the principal amount in the case of a bankers' acceptance equivalent loan) of such bankers' acceptance for the period from and including the date of acceptance (or advance in the
case of a bankers' acceptance equivalent loan) of such bankers' acceptance to but excluding the maturity date of such bankers' acceptance. The interest period for bankers' acceptance loans is a 30,
60, 90 or 180 day period (in each case subject to availability). The interest rate for loans under the revolving credit facility and the letter of credit facility is subject to
adjustment on a quarterly basis, based on the ratio of our consolidated debt to EBITDA (as defined).

The
revolving facility will mature in October 2008. The Company had no borrowings under the revolving facility at December 31, 2005 and $32.5 million in borrowings
at September 30, 2006. The Company has classified its borrowings under the revolving facility as current liabilities at September 30, 2006 because the Company intends to repay these
borrowings in less than one year. The term loan will mature in January 2012. The term loan is subject to quarterly amortization payments of $733, with the balance
payable on the maturity date. In addition, the credit agreement will provide for mandatory repayments, subject to certain exceptions, of the term loan based on certain asset sales, the net proceeds of
certain debt and equity issuances, excess cash flow and insurance proceeds.

The
amended credit agreement contains financial and operating covenants, including among other things, that the Company maintain certain financial ratios, and imposes limitations on the
Company's ability to make capital expenditures, to incur indebtedness, and to pay dividends. The Company was in compliance with all loan covenants at September 30, 2006.

If
the Company consummates its proposed initial public offering of the Company's common stock (the "proposed IPO") on or prior to December 31, 2006, the credit agreement will be
amended to provide for, among other things, (i) an increase in the uncommitted incremental term facility pursuant to which we will be entitled to incur additional dollar-denominated term loans
in an aggregate principal amount of up to $100.0 million and (ii) certain amendments to the financial covenants contained in our amended credit facility.

For
the three months ended September 30, 2005 and 2006, the weighted average interest rate for long-term debt under the credit facility was 6.3% and 7.6%,
respectively. For the nine months ended September 30, 2005 and 2006 the weighted average interest rate for long-term debt under the credit facility was 6.5% and 7.6%, respectively.
For the three and nine months ended September 30, 2006, the weighted average interest rate for short-term borrowings under the revolving facility was 9.1%. The Company did not
borrow under its revolving facility during the first nine months of 2005.

In
2002 our wholly owned subsidiary Brand Services, Inc. issued $150.0 million of 12% Senior Subordinated Notes (the "Senior Subordinated Notes") due in 2012,
guaranteed by the Company, with interest payable semi-annually. The Senior Subordinated Notes were issued at a discount of $4,216 and are subordinated to the Credit Facility
(the "Credit Facility"). Amortization expense related to the discount on the Senior Subordinated Notes for the three and nine months ended September 30, 2005 and 2006 was $75 and $84,
and $222 and $250, respectively.

The
Company also issued $35.0 million of 13% pay-in-kind notes (the "Intermediate Notes") that are subordinated to the Credit Facility and rank
equally with the Senior Subordinated Notes. The Intermediate

20

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Notes
were issued at a discount of $4,098. Amortization expense related to the discount on the Intermediate Notes for the three and nine months ended September 30, 2005 and 2006 was $56 and
$65, and $165 and $190, respectively. The Intermediate Notes are "pay-in-kind" notes due to restrictions on interest payments in the Credit Facility. Accretion of interest on
the Intermediate Notes for the three and nine months ended September 30, 2005 and 2006 was $1,476 and $1,777, and $4,548 and $5,159, respectively.

12.   Redeemable Preferred Stock

On July 29, 2005, the Company issued and sold to J.P. Morgan Partners Global Investors, L.P., J.P. Morgan Partners Global Investors
(Cayman), L.P., J.P. Morgan Partners Global Investors A, L.P., J.P. Morgan Partners Global Investors (Cayman) II, L.P., J.P. Morgan Partners (BHCA), L.P. and J.P. Morgan
Partners Global Investors (Selldown), L.P. $30.0 million aggregate liquidation value of its Series A Preferred Capital Stock.

Dividends
on the preferred stock accrue cumulatively on a daily basis at a rate of 18% per annum (computed on the basis of a 360-day year of twelve 30-day months)
on the liquidation value of the preferred stock. The dividend rate will increase (a) by 0.25% each quarter after the occurrence of certain events of default, up to a maximum rate of 20.0% per
annum and (b) to 20% per annum after a default in any payment due on the preferred stock.

The
preferred stock is required to be redeemed by Brand Energy & Infrastructure Services, Inc. on October 16, 2014 at their liquidation value or upon the occurrence
of a change of control at 101% of their liquidation value. Prior to July 1, 2008, the preferred stock may be redeemed at the option of Brand Energy & Infrastructure Services, Inc.
at a redemption price equal to the sum of the present values of 109% of the aggregate liquidation value of the preferred stock to and including July 1, 2008, discounted to the date of
redemption on a quarterly basis (assuming a 360-day year consisting of twelve 30-day months) at the U.S. Treasury rate plus 50 basis points, together with, in
each case, accrued and unpaid dividends, if any at redemption date.

After
July 1, 2008, the preferred stock may be redeemed at the option of Brand Energy & Infrastructure Services, Inc., at the following redemption prices (expressed
as percentages of the liquidation value thereof), plus, in each case, accrued and unpaid dividends to the date of redemption, if any:

Period in which redemption occurs

PercentageJuly 1, 2008 through (and including) September 30, 2009

109.00%July 1, 2009 through (and including) September 30, 2010

104.50%July 1, 2010 through (and including) September 30, 2011

102.25%Thereafter

100.00%


Because
the preferred stock has mandatory redemptions terms, it is accounted for as a long-term liability and the related accrued dividends are recorded as preferred stock
dividend expense.

13.   Commitments And Contingencies

In the ordinary course of conducting its business, the Company becomes involved in various pending claims and lawsuits. These primarily relate to employee
matters. The outcome of these matters is not presently determinable; however, in the opinion of management, based on the advice of legal counsel, the resolution of these matters is not anticipated to
have a material adverse effect on the financial position or results of operations of the Company.

21

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14.   Financial Instruments

Off-Balance Sheet Risk

As security for the Company's performance under its self-insurance obligations and to insurers, the Company is contingently liable under letters of
credit in the amount of $34.4 million at September 30, 2006. These letters of credit generally have no scheduled expiration date. The Company pays fees to various banks that range from
3.25% to 4.25% per annum of their face value. If the Company were required to replace its outstanding letters of credit as of September 30, 2006, it is the Company's opinion that the
replacement cost would not vary significantly from the present fee structure.

Derivative Instruments and Hedging Activities

In order to mitigate the interest rate risk related to changes on its variable rate debt, in December 2005 the Company entered into two interest rate swap
agreements. Under these agreements, the Company will pay fixed interest rates for three years and will receive floating interest rate payments based on the U.S. 90 day LIBOR and
90 day Canadian bankers acceptances. During years one and two the notional amounts of the U.S. Dollar swap is $50 million and reduces to $25 million in the final year of
the agreement, while the notional amount of the Canadian dollar swap is $35 million in years one and two, reducing to $17.5 million in the final year of the agreement.

Foreign
currency exposures arise from transactions denominated in a currency other than the U.S. dollar. As a result of the Company's purchase of substantially all of the
operations and the net operating assets of Aluma effective July 29, 2005, the Company is subject to foreign currency risk associated with its Canadian investment. In order to mitigate the
Company's exposure to changes in the value of the Canadian dollar due to its investment in Aluma, during the second half of 2005 the Company entered into an $80 million U.S. dollar /
Canadian dollar currency swap for a period of three years. The notional amount of the swap is $80 million during years one and two and reduces to $40 million during the final year of
the agreement.

The
Company did not elect to treat these swap agreements as hedges under SFAS 133 and so mark-to-market gains and losses were recognized in net income. For
the three months ended September 30, 2006, the Company recorded a loss of $0.9 million on its interest rate swaps and a gain of $0.3 million on its foreign currency swaps. For the
nine months ended September 30, 2006, the Company recognized a mark-to-market gain of $0.1 million on its interest rate swaps and a
mark-to-market loss of $3.3 million on its foreign currency swaps. The fair value of the interest rate swaps and foreign currency swaps were recorded in other current
assets and other current liabilities, respectively, at December 31, 2005 and September 30, 2006.

Fair Value of Financial Instruments

The following methods and assumptions were used by the Company in estimating its fair value disclosures for financial instruments:



22

---





The
carrying amounts and fair values of the Company's financial instruments at December 31, 2005 and September 30, 2006, are as follows:

|                                            |  | December 31, 2005 |         | September 30, 2006 |  
|------------------------------------------- |  | ----------------- | ------- | ------------------ | -
|
|Interest rate swaps                         |  | $                 | 231     |                    | $
|Currency swaps                              |  |                   | (1,519  | )                  |  
|Term loans                                  |  |                   | 288,959 |                    |  
|Notes payable and capital lease obligations |  |                   | 828     |                    |  
|12% Senior Subordinated Notes (a)           |  |                   | 150,000 |                    |  
|13% Intermediate Notes (a)                  |  |                   | 52,457  |                    |  

---

23

---



15.   Stock Based Employee Compensation

Subsequent to the Transaction, the LLC adopted a Management Equity Incentive Program (the "Management Equity Incentive Program"). Under this
program, employees of Brand are eligible to participate in both a time-based equity incentive program and a performance-based equity incentive program to be granted, at no cost to the
individual, Class C units and Class C-1 units of the LLC which allow the employee to share in the proceeds of certain liquidity events (as defined by
the LLC operating agreement). Under the time-based equity incentive program, for so long as a member of management remains employed by Brand, and subject to an accelerated vesting
in the event of certain liquidity events, the time-based incentive units issued to each employee vest over a five-year period. Under the performance-based equity incentive
program, the number of outstanding performance-based units that will vest upon the occurrence of a liquidity event will be determined by comparing the net equity valuation of Brand to certain net
equity valuation targets agreed to between management and the LLC. In the event that no liquidity event occurs prior to December 31, 2009, the number of the outstanding performance-based
units that vest on that date will be determined by the fair market value of the LLC on that date.

Beginning
in April 2003, certain members of the Company's management team were offered the opportunity to acquire 100%-vested Class B units of the LLC, at the fair
market value on date of issuance, through a leveraged co-investment loan. As in the case of the Class C and Class C-1 units, Class B units allow the
employee to share in the proceeds of certain liquidity events (as defined by the LLC operating agreement). These co-investment loans are limited recourse loans, bear interest
at the rate of 3.27%, and mature on April 15, 2011. For financial reporting purposes, these management loans are recorded in the LLC financial statements; however, the related stock
compensation expense is recorded on the Company's books and records, based on the fair value at the date of issuance.

From
time-to-time, certain members of the Company's management team were granted fully-vested Class B units at no cost. For financial reporting purposes,
the compensation expense related to these grants is recorded on the Company's books and records, as applicable.

Effective
January 1, 2006, the Company adopted the provisions of Statement of Financial Accounting Standards ("SFAS") No. 123 (Revised 2004) "Share-Based Payment"
("SFAS No. 123(R)") using the modified prospective method, which requires measurement of compensation cost for all stock-based
awards at fair value on date of grant and recognition of compensation over the service periods for awards expected to vest.

Previously,
effective January 1, 2004, the Company adopted the fair value recognition provisions of Statement of Financial Accounting Standards ("SFAS") No. 123,
"Accounting for Stock-Based Compensation". The Company selected the modified prospective transition method under the provisions of SFAS No. 148, "Accounting for Stock-Based
Compensation-Transition and Disclosure," which requires expensing options prospectively, beginning in the year of adoption.

The
principal difference to the Company between the two methods of accounting for stock based compensation is that, under SFAS 123 the Company recorded the impact of forfeitures
as they occurred, whereas under SFAS 123 (R) the Company must estimate the impact of future forfeitures on current periodic expense. Because the Company has historically encountered very
low turnover in its management and does not anticipate any increase in turnover in the future, the impact of adoption of SFAS 123 (R) was immaterial to its results of operations and
financial position.

During
the nine months ended September 30, 2005, the LLC granted 153,488 Class B units with a fair value of $1.66 per unit at no cost to its new chief
executive officer. In addition, the LLC granted 75,000 Class C-1 time-based units with a fair value of $2.16 per unit,
982,042 Class C-1 performance based units with a fair value of $2.70 per unit, 127,825 Class C time-based units with a fair value of $1.54
per unit, and 586,110 Class C performance based units with a fair value of $1.58 per unit to its senior management.

24

---



During
the nine months ended September 30, 2006, the LLC granted 27,315 Class C time-based units with a fair value of $1.66 per unit and
333,725 Class C performance-based units with a fair value of $2.86 per unit to employees. In addition, the LLC offered two newly hired executives to purchase a total of
12,196 100%-vested Class B units at the fair market value on date of grant, through a leveraged co-investment loan.

The
following table summarizes the number of units and weighted fair unit value of Class C, Class C-1 and co-leveraged Class B units
of the LLC awards outstanding to the employees of Brand as of September 30, 2006:

|                                  |  | Units Outstanding |  | Weighted Fair Unit Value
|--------------------------------- |  | ----------------- |  | ------------------------
|Time-based Class C units          |  | 432,288           |  | $                       
|Performance-based Class C units   |  | 1,516,146         |  |                         
|Time-based Class C-1 units        |  | 75,000            |  |                         
|Performance-based Class C-1 units |  | 917,398           |  |                         
|Co-leveraged Class B units        |  | 287,591           |  |                         

The
fair value of each award was estimated on the date of grant using a binomial option pricing model and the following assumptions:

|                                |  | Nine Months Ended September 30, 2005 |  | Nine Months Ended September 30, 2006
|------------------------------- |  | ------------------------------------ |  | ------------------------------------
|Average risk-free interest rate |  | 3.72%                                |  | 5.18%                               
|Expected dividend yield         |  | 0.00%                                |  | 0.00%                               
|Expected volatility             |  | 55.85%                               |  | 41.43%                              
|Expected Life (years)           |  | 3.375                                |  | 2.000                               

Time
based Class C and C-1 units vest over a period of five years. The Company estimates that approximately 16.67% of the performance based
Class C and C-1 units will vest in accordance with the terms of the LLC agreement.

No
awards have been exercised or expired since inception. Expense for time-based awards is being recorded over a graded vesting schedule, while expense for performance based
awards is being recorded over a straight-line vesting schedule. Based on the awards outstanding at September 30, 2006, estimated non-cash compensation expense for the
next five years is as follows:

|Remainder of 2006 |  | $ | 89 
|----------------- |  | - | ---
|2007              |  |   | 259
|2008              |  |   | 210
|2009              |  |   | 185
|2010              |  |   |   

16.   Income Taxes

Deferred income taxes reflect the tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and
the amounts used for income tax purposes. Deferred income taxes are not provided on undistributed earnings of the Company's foreign subsidiary because those earnings are considered to be permanently
invested. If these amounts were not considered indefinitely reinvested, additional deferred taxes of approximately $7.1 million would have been provided as of September 30, 2006.

25

---



For
the three and nine months ended September 30, 2005 and 2006, income (loss) before provision for income taxes (as restated) was as follows:

|              |  | Three Months
Ended
September 30, |        | Nine Months
Ended
September 30,
|------------- |  | -------------------------------- | ------ | -------------------------------
|
|
|United States |  | $                                | (2,109 | )                              
|Foreign       |  |                                  | 4,351  |                                
|              |  |                                  |        |                                
|              |  | $                                | 2,242  |                                
|              |  |                                  |        |                                

The
reconciliation of the statutory federal income tax expense on the Company's pretax income to the actual provision for income taxes for the three and nine months ended
September 30, 2005 and 2006 (as restated) follows:

|                                      |                            | Three Months
Ended
September 30, |     | Nine Months
Ended
September 30,
|------------------------------------- | -------------------------- | -------------------------------- | --- | -------------------------------
|
|
|Statutory federal income taxes        |                            | $                                | 763 |                                
|State and local taxes, net of federal |                            |                                  | (45 | )                              
|Foreign tax rate differential         |                            |                                  | 212 |                                
|Preferred stock dividends expense     |                            |                                  | 321 |                                
|Interest expense disallowance         |                            |                                  | 132 |                                
|Other                                 |                            |                                  | (20 | )                              
|                                      |                            |                                  |     |                                
|                                      | Provision for income taxes |                                  | $   | 1,363                          
|                                      |                            |                                  |     |                                

17.   Comprehensive Income (Loss)

For the three and nine months ended September 30, 2005 and 2006, comprehensive income (loss) (as restated) was as follows:

|                                       |                             | Three Months
Ended
September 30, |       | Nine Months
Ended
September 30,
|-------------------------------------- | --------------------------- | -------------------------------- | ----- | -------------------------------
|
|
|Net income (loss)                      |                             | $                                | 879   |                                
|Impact of foreign currency translation |                             |                                  | 3,705 |                                
|                                       |                             |                                  |       |                                
|                                       | Comprehensive income (loss) |                                  | $     | 4,584                          
|                                       |                             |                                  |       |                                

18.   Information by Segment and Geographic Area

The Company reports information about its operating segment using the "management approach" in accordance with SFAS No. 131, "Disclosures about
Segments of an Enterprise and Related Information" ("SFAS 131"). This approach is based upon the way management organizes and reports the segments within the enterprise for making operating
decisions and assessing performance. The Company's reportable segments are identified based upon differences in products, services and markets served. There were no significant inter-segment sales.

26

---



Prior
to the acquisition of the assets and operations of Aluma in July 2005, the Company operated in one business segment, providing work access services primarily to refining,
petrochemical, chemical, utility and pulp and paper industries, and to a lesser extent general commercial clients.

As
a result of the acquisition of the operations of Aluma, the Company commenced operations in a second business segment, providing engineered concrete forming and shoring solutions for
complex concrete construction projects ranging from pre-engineered technology systems to custom-designed formwork and shoring solutions to meet specific customer needs.

Information
by segment is as follows:

|                                      |  | Nine Months Ended
September 30, 2005 |         | Nine Months Ended
September 30, 2006
|------------------------------------- |  | ------------------------------------ | ------- | ------------------------------------
|
|
|Work access services                  |  | $                                    | 291,583 |                                     
|Concrete forming and shoring services |  |                                      | 29,296  |                                     
|                                      |  |                                      |         |                                     
|                                      |  | $                                    | 320,879 |                                     
|                                      |  |                                      |         |                                     

|                                      |  |   |         |  |   | Nine Months Ended
|------------------------------------- |  | - | ------- |  | - | -----------------
|
|
|
|Work access services                  |  | $ | 732,496 |  | $ | 792,089          
|Concrete forming and shoring services |  |   | 97,435  |  |   | 116,414          
|                                      |  |   |         |  |   |                  
|                                      |  | $ | 829,931 |  | $ | 908,503          
|                                      |  |   |         |  |   |                  

|                                      |  | Capital Expenditures
Nine Months Ended
September 30,
|------------------------------------- |  | ----------------------------------------------------
|
|Work access services                  |  | $                                                   
|Concrete forming and shoring services |  |                                                     
|                                      |  |                                                     
|                                      |  | $                                                   
|                                      |  |                                                     

27

---



The
table below reconciles segment operating income to consolidated pretax income (loss) for the nine months ended September 30, 2005 and 2006:

|                                                 |  | Nine Months Ended
September 30, |       
|------------------------------------------------ |  | ------------------------------- | ------
|
|
|Segment operating income                         |  | $                               | 25,850
|Interest expense                                 |  |                                 | 28,140
|Interest income                                  |  |                                 | (235  
|Loss on interest rate and foreign currency swaps |  |                                 |      
|Foreign currency transaction gain                |  |                                 | (3,053
|Redeemable preferred stock dividend expense      |  |                                 | 945   
|                                                 |  |                                 |       
|Consolidated pretax income (loss)                |  | $                               | 53    
|                                                 |  |                                 |       

Information
by geographic areas is as follows:

|              |  | Nine Months Ended |         |  |   |        
|------------- |  | ----------------- | ------- |  | - | -------
|
|
|United States |  | $                 | 268,653 |  | $ | 377,940
|Foreign       |  |                   | 52,226  |  |   | 205,130
|              |  |                   |         |  |   |        
|              |  | $                 | 320,879 |  | $ | 583,070
|              |  |                   |         |  |   |        

19.   Supplemental Consolidating Information

The 12% Senior Subordinated Notes, which are an obligation of Brand Services, Inc., are fully and unconditionally guaranteed on a senior subordinated,
joint, and several basis by the other domestic subsidiaries of Brand Services, Inc. (which are all 100% owned by Brand Energy & Infrastructure Services, Inc.) and by Brand
Energy & Infrastructure Services, Inc. Supplemental consolidating information of Brand Energy & Infrastructure Services, Inc., Brand Services, Inc., the guarantor
subsidiaries, and its foreign non-guarantor subsidiary is presented below. Investments in subsidiaries are presented on the equity method of accounting. Separate financial statements are
not provided because management has concluded that the summarized financial information below provides sufficient information to allow investors to separately determine the nature of the assets held
by and the operations of the guarantor and non-guarantor subsidiaries.

28

---





BRAND ENERGY & INFRASTRUCTURE SERVICES, INC.  CONDENSED CONSOLIDATING BALANCE SHEET  DECEMBER 31, 2005  (Restated)

|Assets                                         |                                      | Brand Services, Inc.                 |         | Guarantor Subsidiaries |         | Non-Guarantor Subsidiary |        | Brand Energy & Infrastructure Services, Inc. |         | Adjustments and Eliminations |         | Brand Energy & Infrastructure Services, Inc. Consolidated
|---------------------------------------------- | ------------------------------------ | ------------------------------------ | ------- | ---------------------- | ------- | ------------------------ | ------ | -------------------------------------------- | ------- | ---------------------------- | ------- | ---------------------------------------------------------
|Current Assets:                                |                                      |                                      |         |                        |         |                          |        |                                              |         |                              |         |                                                          
|                                               | Cash and cash equivalents            |                                      | $       | 355                    |         | $                        | 1,291  |                                              | $       | 4,933                        |         | $                                                        
|                                               | Trade accounts receivable            |                                      |         |                       |         |                          | 86,961 |                                              |         | 30,246                       |         |                                                          
|                                               | Accrued revenue                      |                                      |         |                       |         |                          | 5,560  |                                              |         | 732                          |         |                                                          
|                                               | Other current assets                 |                                      |         | 3,159                  |         |                          | 5,675  |                                              |         | 3,760                        |         |                                                          
|                                               | Due from affiliates                  |                                      |         | 32,269                 |         |                          | 5,469  |                                              |         |                             |         |                                                          
|                                               |                                      |                                      |         |                        |         |                          |        |                                              |         |                              |         |                                                          
|                                               |                                      | Total current assets                 |         |                        | 35,783  |                          |        | 104,956                                      |         |                              | 39,671  |                                                          
|                                               |                                      |                                      |         |                        |         |                          |        |                                              |         |                              |         |                                                          
|Property and Equipment:                        |                                      |                                      |         |                        |         |                          |        |                                              |         |                              |         |                                                          
|                                               | Land                                 |                                      |         |                       |         |                          | 2,260  |                                              |         | 2,930                        |         |                                                          
|                                               | Buildings and leasehold improvements |                                      |         | 45                     |         |                          | 4,045  |                                              |         | 2,188                        |         |                                                          
|                                               | Vehicles and other equipment         |                                      |         | 7,595                  |         |                          | 19,531 |                                              |         | 2,871                        |         |                                                          
|                                               | Scaffolding equipment                |                                      |         | 173,047                |         |                          | 49,250 |                                              |         | 87,090                       |         |                                                          
|                                               |                                      |                                      |         |                        |         |                          |        |                                              |         |                              |         |                                                          
|                                               |                                      | Total property and equipment at cost |         |                        | 180,687 |                          |        | 75,086                                       |         |                              | 95,079  |                                                          
|Less accumulated depreciation and amortization |                                      |                                      | 49,584  |                        |         | 16,472                   |        |                                              | 8,176   |                              |         |                                                         
|                                               |                                      |                                      |         |                        |         |                          |        |                                              |         |                              |         |                                                          
|                                               |                                      | Total property and equipment, net    |         |                        | 131,103 |                          |        | 58,614                                       |         |                              | 86,903  |                                                          
|Due from affiliates                            |                                      |                                      | 113,221 |                        |         |                         |        |                                              |        |                              |         | 53,270                                                   
|Deferred tax asset                             |                                      |                                      |        |                        |         |                         |        |                                              |        |                              |         | 2,375                                                    
|Investment in subsidiaries                     |                                      |                                      | 110,716 |                        |         |                         |        |                                              | 159,734 |                              |         | 236,389                                                  
|Goodwill                                       |                                      |                                      | 254,185 |                        |         | 6,976                    |        |                                              | 38,300  |                              |         |                                                         
|Intangibles and other assets                   |                                      |                                      | 66,276  |                        |         | 3,296                    |        |                                              | 40,451  |                              |         | 1,424                                                    
|                                               |                                      |                                      |         |                        |         |                          |        |                                              |         |                              |         |                                                          
|                                               |                                      | Total assets                         |         | $                      | 711,284 |                          | $      | 173,842                                      |         | $                            | 365,059 |                                                          
|                                               |                                      |                                      |         |                        |         |                          |        |                                              |         |                              |         |                                                          

(Continued on following page)

29

---



BRAND ENERGY & INFRASTRUCTURE SERVICES, INC.  CONDENSED CONSOLIDATING BALANCE SHEET  DECEMBER 31, 2005  (Restated)

|Liabilities and Stockholder's Equity (Deficit) |                                                            | Brand Services, Inc. |         | Guarantor Subsidiaries |   | Non-Guarantor Subsidiary |        | Brand Energy & Infrastructure Services, Inc. |         | Adjustments and Eliminations |   | Brand Energy & Infrastructure Services, Inc. Consolidated
|---------------------------------------------- | ---------------------------------------------------------- | -------------------- | ------- | ---------------------- | - | ------------------------ | ------ | -------------------------------------------- | ------- | ---------------------------- | - | ---------------------------------------------------------
|Current Liabilities:                           |                                                            |                      |         |                        |   |                          |        |                                              |         |                              |   |                                                          
|                                               | Current maturities of long-term debt                       |                      | $       | 2,904                  |   |                          |       |                                              | $       |                             |   | $                                                        
|                                               | Notes payable and capitallease obligations,current portion |                      |         | 100                    |   |                          | 270    |                                              |         |                             |   |                                                          
|                                               | Accounts payable and accrued expenses                      |                      |         | 41,420                 |   |                          | 18,042 |                                              |         | 20,392                       |   |                                                          
|                                               | Deferred revenue                                           |                      |         |                       |   |                          | 2,182  |                                              |         | 852                          |   |                                                          
|                                               | Due to affiliates                                          |                      |         | 5,468                  |   |                          | 31,286 |                                              |         | 984                          |   |                                                          
|                                               |                                                            |                      |         |                        |   |                          |        |                                              |         |                              |   |                                                          
|Total current liabilities                      |                                                            |                      | 49,892  |                        |   | 51,780                   |        |                                              | 22,228  |                              |   |                                                         
|                                               |                                                            |                      |         |                        |   |                          |        |                                              |         |                              |   |                                                          
|Long-term debt                                 |                                                            |                      | 432,704 |                        |   |                         |        |                                              |        |                              |   | 48,990                                                   
|                                               |                                                            |                      |         |                        |   |                          |        |                                              |         |                              |   |                                                          
|Notes payable and capital lease obligations    |                                                            |                      | 258     |                        |   | 200                      |        |                                              |        |                              |   |                                                         
|                                               |                                                            |                      |         |                        |   |                          |        |                                              |         |                              |   |                                                          
|Redeemable preferred stock                     |                                                            |                      |        |                        |   |                         |        |                                              |        |                              |   | 32,337                                                   
|                                               |                                                            |                      |         |                        |   |                          |        |                                              |         |                              |   |                                                          
|Deferred income taxes                          |                                                            |                      | 15,326  |                        |   |                         |        |                                              | 5,600   |                              |   |                                                         
|                                               |                                                            |                      |         |                        |   |                          |        |                                              |         |                              |   |                                                          
|Due to affiliates                              |                                                            |                      | 53,270  |                        |   |                         |        |                                              | 113,221 |                              |   |                                                         
|                                               |                                                            |                      |         |                        |   |                          |        |                                              |         |                              |   |                                                          
|Total stockholder's equity                     |                                                            |                      | 159,834 |                        |   | 121,862                  |        |                                              | 224,010 |                              |   | 212,131                                                  
|                                               |                                                            |                      |         |                        |   |                          |        |                                              |         |                              |   |                                                          
|Total liabilities and stockholder's equity     |                                                            | $                    | 711,284 |                        | $ | 173,842                  |        | $                                            | 365,059 |                              | $ | 293,458                                                  
|                                               |                                                            |                      |         |                        |   |                          |        |                                              |         |                              |   |                                                          

30

---





BRAND ENERGY & INFRASTRUCTURE SERVICES, INC.  CONDENSED CONSOLIDATING BALANCE SHEET  SEPTEMBER 30, 2006

|Assets                            |                                                | Brand
Services,
Inc. |         | Guarantor
Subsidiaries |         | Non-
Guarantor
Subsidiary |         | Brand Energy
&
Infrastructure
Services, Inc. |         | Adjustments
and
Eliminations |         | Brand Energy
&
Infrastructure
Services, Inc.
Consolidated
|--------------------------------- | ---------------------------------------------- | -------------------- | ------- | ---------------------- | ------- | ------------------------- | ------- | -------------------------------------------- | ------- | ---------------------------- | ------- | ---------------------------------------------------------
|Current Assets:                   |                                                |                      |         |                        |         |                           |         |                                              |         |                              |         |                                                          
|                                  | Cash and cash equivalents                      |                      | $       | 4,323                  |         | $                         |        |                                              | $       | 2,859                        |         | $                                                        
|                                  | Trade accounts receivable                      |                      |         |                       |         |                           | 87,043  |                                              |         | 37,158                       |         |                                                          
|                                  | Accrued revenue                                |                      |         |                       |         |                           | 12,983  |                                              |         | 5,130                        |         |                                                          
|                                  | Other current assets                           |                      |         | 3,387                  |         |                           | 5,691   |                                              |         | 4,976                        |         |                                                          
|                                  | Due from affiliates                            |                      |         | 26,965                 |         |                           | 6,632   |                                              |         | 2,086                        |         |                                                          
|                                  |                                                |                      |         |                        |         |                           |         |                                              |         |                              |         |                                                          
|                                  | Total current assets                           |                      |         | 34,675                 |         |                           | 112,349 |                                              |         | 52,209                       |         |                                                          
|                                  |                                                |                      |         |                        |         |                           |         |                                              |         |                              |         |                                                          
|Property and Equipment:           |                                                |                      |         |                        |         |                           |         |                                              |         |                              |         |                                                          
|                                  | Land                                           |                      |         | 298                    |         |                           | 1,256   |                                              |         | 3,443                        |         |                                                          
|                                  | Buildings and leasehold improvements           |                      |         | 904                    |         |                           | 4,091   |                                              |         | 2,502                        |         |                                                          
|                                  | Vehicles and other equipment                   |                      |         | 9,035                  |         |                           | 20,163  |                                              |         | 4,971                        |         |                                                          
|                                  | Scaffolding equipment                          |                      |         | 213,890                |         |                           | 54,609  |                                              |         | 107,598                      |         |                                                          
|                                  |                                                |                      |         |                        |         |                           |         |                                              |         |                              |         |                                                          
|                                  | Total property and equipment, at cost          |                      |         | 224,127                |         |                           | 80,119  |                                              |         | 118,514                      |         |                                                          
|                                  | Less accumulated depreciation and amortization |                      |         | 65,020                 |         |                           | 22,420  |                                              |         | 17,917                       |         |                                                          
|                                  |                                                |                      |         |                        |         |                           |         |                                              |         |                              |         |                                                          
|Total property and equipment, net |                                                |                      | 159,107 |                        |         | 57,699                    |         |                                              | 100,597 |                              |         |                                                         
|Due from affiliates               |                                                |                      | 118,357 |                        |         |                          |         |                                              |        |                              |         | 58,715                                                   
|Deferred tax asset                |                                                |                      |        |                        |         |                          |         |                                              |        |                              |         | 2,375                                                    
|Investment in subsidiaries        |                                                |                      | 112,718 |                        |         |                          |         |                                              | 166,981 |                              |         | 246,850                                                  
|Goodwill                          |                                                |                      | 261,633 |                        |         | 12,050                    |         |                                              | 37,267  |                              |         |                                                         
|Intangibles and other assets      |                                                |                      | 71,993  |                        |         | 3,287                     |         |                                              | 40,158  |                              |         | 1,329                                                    
|                                  |                                                |                      |         |                        |         |                           |         |                                              |         |                              |         |                                                          
|                                  |                                                | Total assets         |         | $                      | 758,483 |                           | $       | 185,385                                      |         | $                            | 397,212 |                                                          
|                                  |                                                |                      |         |                        |         |                           |         |                                              |         |                              |         |                                                          

(continued on following page)

31

---



BRAND ENERGY & INFRASTRUCTURE SERVICES, INC.  CONDENSED CONSOLIDATING BALANCE SHEET  SEPTEMBER 30, 2006

|Liabilities and Stockholder's Equity (Deficit) |                                                              | Brand Services, Inc.      |         | Guarantor Subsidiaries |         | Non-Guarantor Subsidiary |        | Brand Energy & Infrastructure Services, Inc. |         | Adjustments and Eliminations |        | Brand Energy & Infrastructure Services, Inc. Consolidated
|---------------------------------------------- | ------------------------------------------------------------ | ------------------------- | ------- | ---------------------- | ------- | ------------------------ | ------ | -------------------------------------------- | ------- | ---------------------------- | ------ | ---------------------------------------------------------
|Current Liabilities:                           |                                                              |                           |         |                        |         |                          |        |                                              |         |                              |        |                                                          
|                                               | Revolving loan                                               |                           | $       | 32,500                 |         | $                        |       |                                              | $       |                             |        | $                                                        
|                                               | Current maturities of long-term debt                         |                           |         | 2,931                  |         |                          |       |                                              |         |                             |        |                                                          
|                                               | Notes payable and capital lease obligations, current portion |                           |         | 99                     |         |                          | 189    |                                              |         | 9                            |        |                                                          
|                                               | Accounts payable and accrued expenses                        |                           |         | 54,670                 |         |                          | 22,209 |                                              |         | 24,155                       |        |                                                          
|                                               | Deferred revenue                                             |                           |         |                       |         |                          | 3,179  |                                              |         | 655                          |        |                                                          
|                                               | Due to affiliates                                            |                           |         | 27,462                 |         |                          | 8,221  |                                              |         |                             |        |                                                          
|                                               |                                                              |                           |         |                        |         |                          |        |                                              |         |                              |        |                                                          
|                                               |                                                              | Total current liabilities |         |                        | 117,662 |                          |        | 33,798                                       |         |                              | 24,819 |                                                          
|Long-term debt                                 |                                                              |                           | 433,451 |                        |         |                         |        |                                              |        |                              |        | 54,339                                                   
|Notes payable and capital lease obligations    |                                                              |                           | 333     |                        |         | 95                       |        |                                              | 31      |                              |        |                                                         
|Redeemable Preferred Stock                     |                                                              |                           |        |                        |         |                         |        |                                              |        |                              |        | 36,902                                                   
|Deferred income taxes                          |                                                              |                           | 17,728  |                        |         |                         |        |                                              | 9,542   |                              |        |                                                         
|Due to affiliates                              |                                                              |                           | 58,715  |                        |         |                         |        |                                              | 118,357 |                              |        |                                                         
|Total stockholder's equity                     |                                                              |                           | 130,594 |                        |         | 151,492                  |        |                                              | 244,463 |                              |        | 218,028                                                  
|                                               |                                                              |                           |         |                        |         |                          |        |                                              |         |                              |        |                                                          
|Total liabilities and stockholder's equity     |                                                              | $                         | 758,483 |                        | $       | 185,385                  |        | $                                            | 397,212 |                              | $      | 309,269                                                  
|                                               |                                                              |                           |         |                        |         |                          |        |                                              |         |                              |        |                                                          

32

---





BRAND ENERGY & INFRASTRUCTURE SERVICES, INC.  CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS  FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2005  (Restated)

|                                            |                                 | Brand
Services, Inc.                  |        | Guarantor
Subsidiaries |         | Non-
Guarantor
Subsidiary |        | Brand Energy
&
Infrastructure
Services, Inc. |       | Adjustments
and
Eliminations |        | Brand Energy
&
Infrastructure
Services, Inc.
Consolidated |  
|------------------------------------------- | ------------------------------- | ------------------------------------- | ------ | ---------------------- | ------- | ------------------------- | ------ | -------------------------------------------- | ----- | ---------------------------- | ------ | --------------------------------------------------------- | -
|Revenue:                                    |                                 |                                       |        |                        |         |                           |        |                                              |       |                              |        |                                                           |  
|                                            | Labor                           |                                       | $      |                       |         | $                         | 64,206 |                                              | $     | 23,003                       |        | $                                                         | 
|                                            | Equipment rental                |                                       |        |                       |         |                           | 24,232 |                                              |       | 12,865                       |        |                                                           | 
|                                            | Equipment sales                 |                                       |        |                       |         |                           | 2,708  |                                              |       | 3,083                        |        |                                                           | 
|                                            | Intercompany revenue            |                                       |        | 6,307                  |         |                           | 53     |                                              |       |                             |        |                                                           | 
|                                            |                                 |                                       |        |                        |         |                           |        |                                              |       |                              |        |                                                           |  
|                                            |                                 | Total revenues                        |        |                        | 6,307   |                           |        | 91,199                                       |       |                              | 38,951 |                                                           |  
|                                            |                                 |                                       |        |                        |         |                           |        |                                              |       |                              |        |                                                           |  
|Operating expenses:                         |                                 |                                       |        |                        |         |                           |        |                                              |       |                              |        |                                                           |  
|                                            | Labor                           |                                       |        |                       |         |                           | 53,971 |                                              |       | 20,127                       |        |                                                           | 
|                                            | Equipment rental                |                                       |        | 4,456                  |         |                           | 4,018  |                                              |       | 4,792                        |        |                                                           | 
|                                            | Equipment sales                 |                                       |        |                       |         |                           | 1,924  |                                              |       | 1,664                        |        |                                                           | 
|                                            | Divisional operating expenses   |                                       |        | 11                     |         |                           | 5,820  |                                              |       | 683                          |        |                                                           | 
|                                            | Intercompany operating expenses |                                       |        |                       |         |                           | 6,307  |                                              |       | 53                           |        |                                                           | 
|                                            |                                 |                                       |        |                        |         |                           |        |                                              |       |                              |        |                                                           |  
|                                            |                                 | Total operating expenses              |        |                        | 4,467   |                           |        | 72,040                                       |       |                              | 27,319 |                                                           |  
|                                            |                                 |                                       |        |                        |         |                           |        |                                              |       |                              |        |                                                           |  
|                                            |                                 | Gross profit                          |        |                        | 1,840   |                           |        | 19,159                                       |       |                              | 11,632 |                                                           |  
|Selling and administrative expenses         |                                 |                                       | 6,740  |                        |         | 9.927                     |        |                                              | 5,637 |                              |        |                                                          |  
|                                            |                                 |                                       |        |                        |         |                           |        |                                              |       |                              |        |                                                           |  
|                                            |                                 | Operating income (loss)               |        |                        | (4,900  | )                         |        | 9,232                                        |       |                              | 5,995  |                                                           |  
|Interest expense                            |                                 |                                       | 9,447  |                        |         | 2                         |        |                                              |      |                              |        | 1,647                                                     |  
|Interest income                             |                                 |                                       | (71    | )                      |         |                          |        |                                              | (5    | )                            |        |                                                          |  
|Intercompany interest                       |                                 |                                       | (115   | )                      |         |                          |        |                                              | 1,751 |                              |        | (1,636                                                    | )
|Foreign currency transaction (gain) loss    |                                 |                                       | (3,057 | )                      |         | 106                       |        |                                              | (102  | )                            |        |                                                          |  
|Redeemable preferred stock dividend expense |                                 |                                       |       |                        |         |                          |        |                                              |      |                              |        | 945                                                       |  
|Equity in loss (income) of subsidiaries     |                                 |                                       |       |                        |         |                          |        |                                              |      |                              |        | (1,971                                                    | )
|                                            |                                 |                                       |        |                        |         |                           |        |                                              |       |                              |        |                                                           |  
|                                            |                                 | Income (loss) before for income taxes |        |                        | (11,104 | )                         |        | 9,124                                        |       |                              | 4,351  |                                                           |  
|Income tax expense (benefit)                |                                 |                                       | (4,072 | )                      |         | 3,736                     |        |                                              | 1,699 |                              |        |                                                          |  
|                                            |                                 |                                       |        |                        |         |                           |        |                                              |       |                              |        |                                                           |  
|                                            |                                 | Net income (loss)                     |        | $                      | (7,032  | )                         | $      | 5,388                                        |       | $                            | 2,652  |                                                           | $
|                                            |                                 |                                       |        |                        |         |                           |        |                                              |       |                              |        |                                                           |  

33

---



BRAND ENERGY & INFRASTRUCTURE SERVICES, INC.  CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS  FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2006

|                                                      |                                 | Brand
Services, Inc.     |         | Guarantor
Subsidiaries |         | Non-
Guarantor
Subsidiary |        | Brand Energy
&
Infrastructure
Services, Inc. |       | Adjustments
and
Eliminations |        | Brand Energy
&
Infrastructure
Services, Inc.
Consolidated |  
|----------------------------------------------------- | ------------------------------- | ------------------------ | ------- | ---------------------- | ------- | ------------------------- | ------ | -------------------------------------------- | ----- | ---------------------------- | ------ | --------------------------------------------------------- | -
|Revenue:                                              |                                 |                          |         |                        |         |                           |        |                                              |       |                              |        |                                                           |  
|                                                      | Labor                           |                          | $       |                       |         | $                         | 88,022 |                                              | $     | 33,729                       |        | $                                                         | 
|                                                      | Equipment rental                |                          |         |                       |         |                           | 32,782 |                                              |       | 16,510                       |        |                                                           | 
|                                                      | Equipment sales                 |                          |         |                       |         |                           | 4,098  |                                              |       | 7,076                        |        |                                                           | 
|                                                      | Intercompany revenue            |                          |         | 8,534                  |         |                           |       |                                              |       |                             |        |                                                           | 
|                                                      |                                 |                          |         |                        |         |                           |        |                                              |       |                              |        |                                                           |  
|                                                      |                                 | Total revenues           |         |                        | 8,534   |                           |        | 124,902                                      |       |                              | 57,315 |                                                           |  
|                                                      |                                 |                          |         |                        |         |                           |        |                                              |       |                              |        |                                                           |  
|Operating expenses:                                   |                                 |                          |         |                        |         |                           |        |                                              |       |                              |        |                                                           |  
|                                                      | Labor                           |                          |         |                       |         |                           | 75,387 |                                              |       | 30,188                       |        |                                                           | 
|                                                      | Equipment rental                |                          |         | 5,194                  |         |                           | 5,113  |                                              |       | 5,188                        |        |                                                           | 
|                                                      | Equipment sales                 |                          |         |                       |         |                           | 2,806  |                                              |       | 4,457                        |        |                                                           | 
|                                                      | Divisional operating expenses   |                          |         | (18                    | )       |                           | 7,690  |                                              |       | 1,998                        |        |                                                           | 
|                                                      | Intercompany operating expenses |                          |         |                       |         |                           | 8,538  |                                              |       | (4                           | )      |                                                           | 
|                                                      |                                 |                          |         |                        |         |                           |        |                                              |       |                              |        |                                                           |  
|                                                      |                                 | Total operating expenses |         |                        | 5,176   |                           |        | 99,534                                       |       |                              | 41,827 |                                                           |  
|                                                      |                                 |                          |         |                        |         |                           |        |                                              |       |                              |        |                                                           |  
|                                                      |                                 | Gross profit             |         |                        | 3,358   |                           |        | 25,368                                       |       |                              | 15,488 |                                                           |  
|Selling and administrative expenses                   |                                 |                          | 9,539   |                        |         | 11,105                    |        |                                              | 9,820 |                              |        |                                                          |  
|                                                      |                                 |                          |         |                        |         |                           |        |                                              |       |                              |        |                                                           |  
|                                                      |                                 | Operating income (loss)  |         |                        | (6,181  | )                         |        | 14,263                                       |       |                              | 5,668  |                                                           |  
|Interest expense                                      |                                 |                          | 11,540  |                        |         | 13                        |        |                                              | (9    | )                            |        | 1,873                                                     |  
|Interest income                                       |                                 |                          | 68      |                        |         | (103                      | )      |                                              | (51   | )                            |        |                                                          |  
|Intercompany interest                                 |                                 |                          | (857    | )                      |         |                          |        |                                              | 2,730 |                              |        | (1,873                                                    | )
|Foreign currency transaction (gain) loss              |                                 |                          | (137    | )                      |         | 126                       |        |                                              | 352   |                              |        |                                                          |  
|Gain on interest rate and foreign currency rate swaps |                                 |                          | 559     |                        |         |                          |        |                                              |      |                              |        |                                                          |  
|Redeemable preferred stock dividend expense           |                                 |                          |        |                        |         |                          |        |                                              |      |                              |        | 1,589                                                     |  
|Equity in loss (income) of subsidiaries               |                                 |                          |        |                        |         |                          |        |                                              |      |                              |        | 314                                                       |  
|                                                      |                                 |                          |         |                        |         |                           |        |                                              |       |                              |        |                                                           |  
|Income (loss) before income taxes                     |                                 |                          | (17,354 | )                      |         | 14,227                    |        |                                              | 2,646 |                              |        | (1,903                                                    | )
|Income tax expense (benefit)                          |                                 |                          | (4,968  | )                      |         | 5,315                     |        |                                              | 384   |                              |        |                                                          |  
|                                                      |                                 |                          |         |                        |         |                           |        |                                              |       |                              |        |                                                           |  
|                                                      |                                 | Net income (loss)        |         | $                      | (12,386 | )                         | $      | 8,912                                        |       | $                            | 2,262  |                                                           | $
|                                                      |                                 |                          |         |                        |         |                           |        |                                              |       |                              |        |                                                           |  

34

---





BRAND ENERGY & INFRASTRUCTURE SERVICES, INC.  CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS  FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2005  (Restated)

|                                            |                                 | Brand Services, Inc.     |         | Guarantor Subsidiaries |         | Non-Guarantor Subsidiary |         | Brand Energy & Infrastructure Services, Inc. |       | Adjustments and Eliminations |        | Brand Energy & Infrastructure Services, Inc. Consolidated |  
|------------------------------------------- | ------------------------------- | ------------------------ | ------- | ---------------------- | ------- | ------------------------ | ------- | -------------------------------------------- | ----- | ---------------------------- | ------ | --------------------------------------------------------- | -
|Revenue:                                    |                                 |                          |         |                        |         |                          |         |                                              |       |                              |        |                                                           |  
|                                            | Labor                           |                          | $       |                       |         | $                        | 201,911 |                                              | $     | 33,968                       |        | $                                                         | 
|                                            | Equipment rental                |                          |         |                       |         |                          | 60,313  |                                              |       | 14,879                       |        |                                                           | 
|                                            | Equipment sales                 |                          |         |                       |         |                          | 7,899   |                                              |       | 3,379                        |        |                                                           | 
|                                            | Intercompany revenue            |                          |         | 18,270                 |         |                          | 131     |                                              |       |                             |        |                                                           | 
|                                            |                                 |                          |         |                        |         |                          |         |                                              |       |                              |        |                                                           |  
|                                            |                                 | Total revenues           |         |                        | 18,270  |                          |         | 270,254                                      |       |                              | 52,226 |                                                           |  
|                                            |                                 |                          |         |                        |         |                          |         |                                              |       |                              |        |                                                           |  
|Operating expenses:                         |                                 |                          |         |                        |         |                          |         |                                              |       |                              |        |                                                           |  
|                                            | Labor                           |                          |         |                       |         |                          | 168,292 |                                              |       | 29,989                       |        |                                                           | 
|                                            | Equipment rental                |                          |         | 13,876                 |         |                          | 7,169   |                                              |       | 5,635                        |        |                                                           | 
|                                            | Equipment sales                 |                          |         |                       |         |                          | 5,993   |                                              |       | 1,742                        |        |                                                           | 
|                                            | Divisional operating expenses   |                          |         | 17                     |         |                          | 14,054  |                                              |       | 1,005                        |        |                                                           | 
|                                            | Intercompany operating expenses |                          |         |                       |         |                          | 18,270  |                                              |       | 131                          |        |                                                           | 
|                                            |                                 |                          |         |                        |         |                          |         |                                              |       |                              |        |                                                           |  
|                                            |                                 | Total operating expenses |         |                        | 13,893  |                          |         | 213,778                                      |       |                              | 38,502 |                                                           |  
|                                            |                                 |                          |         |                        |         |                          |         |                                              |       |                              |        |                                                           |  
|                                            |                                 | Gross profit             |         |                        | 4,377   |                          |         | 56,476                                       |       |                              | 13,724 |                                                           |  
|Selling and administrative expenses         |                                 |                          | 21,124  |                        |         | 24,195                   |         |                                              | 6,353 |                              |        |                                                          |  
|                                            |                                 |                          |         |                        |         |                          |         |                                              |       |                              |        |                                                           |  
|                                            |                                 | Operating income (loss)  |         |                        | (16,747 | )                        |         | 32,281                                       |       |                              | 7,371  |                                                           |  
|Interest expense                            |                                 |                          | 23,329  |                        |         | 41                       |         |                                              | 5     |                              |        | 4,765                                                     |  
|Interest income                             |                                 |                          | (219    | )                      |         | (1                       | )       |                                              | (15   | )                            |        |                                                          |  
|Intercompany interest                       |                                 |                          | 3,003   |                        |         |                         |         |                                              | 1,751 |                              |        | (4,754                                                    | )
|Foreign currency transaction (gain) loss    |                                 |                          | (3,057  | )                      |         | 106                      |         |                                              | (102  | )                            |        |                                                          |  
|Redeemable preferred stock dividend expense |                                 |                          |        |                        |         |                         |         |                                              |      |                              |        | 945                                                       |  
|Equity in loss (income) of subsidiaries     |                                 |                          |        |                        |         |                         |         |                                              |      |                              |        | 136                                                       |  
|                                            |                                 |                          |         |                        |         |                          |         |                                              |       |                              |        |                                                           |  
|Income (loss) before income taxes           |                                 |                          | (39,803 | )                      |         | 32,135                   |         |                                              | 5,732 |                              |        | (1,092                                                    | )
|Income tax expense (benefit)                |                                 |                          | (13,344 | )                      |         | 12,308                   |         |                                              | 2,181 |                              |        |                                                          |  
|                                            |                                 |                          |         |                        |         |                          |         |                                              |       |                              |        |                                                           |  
|                                            |                                 | Net income (loss)        |         | $                      | (26,459 | )                        | $       | 19,827                                       |       | $                            | 3,551  |                                                           | $
|                                            |                                 |                          |         |                        |         |                          |         |                                              |       |                              |        |                                                           |  

35

---



BRAND ENERGY & INFRASTRUCTURE SERVICES, INC.  CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS  FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2006

|                                                      |                                 | Brand Services, Inc.     |         | Guarantor Subsidiaries |         | Non-Guarantor Subsidiary |         | Brand Energy & Infrastructure Services, Inc. |        | Adjustments and Eliminations |         | Brand Energy & Infrastructure Services, Inc. Consolidated |  
|----------------------------------------------------- | ------------------------------- | ------------------------ | ------- | ---------------------- | ------- | ------------------------ | ------- | -------------------------------------------- | ------ | ---------------------------- | ------- | --------------------------------------------------------- | -
|Revenue:                                              |                                 |                          |         |                        |         |                          |         |                                              |        |                              |         |                                                           |  
|                                                      | Labor                           |                          | $       |                       |         | $                        | 269,054 |                                              | $      | 133,477                      |         | $                                                         | 
|                                                      | Equipment rental                |                          |         |                       |         |                          | 98,051  |                                              |        | 50,839                       |         |                                                           | 
|                                                      | Equipment sales                 |                          |         |                       |         |                          | 12,819  |                                              |        | 20,814                       |         |                                                           | 
|                                                      | Intercompany revenue            |                          |         | 25,053                 |         |                          |        |                                              |        |                             |         |                                                           | 
|                                                      |                                 |                          |         |                        |         |                          |         |                                              |        |                              |         |                                                           |  
|                                                      |                                 | Total revenues           |         |                        | 25,053  |                          |         | 379,924                                      |        |                              | 205,130 |                                                           |  
|                                                      |                                 |                          |         |                        |         |                          |         |                                              |        |                              |         |                                                           |  
|Operating expenses:                                   |                                 |                          |         |                        |         |                          |         |                                              |        |                              |         |                                                           |  
|                                                      | Labor                           |                          |         |                       |         |                          | 229,148 |                                              |        | 120,011                      |         |                                                           | 
|                                                      | Equipment rental                |                          |         | 15,457                 |         |                          | 14,748  |                                              |        | 14,148                       |         |                                                           | 
|                                                      | Equipment sales                 |                          |         |                       |         |                          | 8,496   |                                              |        | 13,158                       |         |                                                           | 
|                                                      | Divisional operating expenses   |                          |         | 2                      |         |                          | 21,431  |                                              |        | 5,530                        |         |                                                           | 
|                                                      | Intercompany operating expenses |                          |         |                       |         |                          | 25,053  |                                              |        |                             |         |                                                           | 
|                                                      |                                 |                          |         |                        |         |                          |         |                                              |        |                              |         |                                                           |  
|                                                      |                                 | Total operating expenses |         |                        | 15,459  |                          |         | 298,876                                      |        |                              | 152,847 |                                                           |  
|                                                      |                                 |                          |         |                        |         |                          |         |                                              |        |                              |         |                                                           |  
|                                                      |                                 | Gross profit             |         |                        | 9,594   |                          |         | 81,048                                       |        |                              | 52,283  |                                                           |  
|Selling and administrative expenses                   |                                 |                          | 25,952  |                        |         | 34,959                   |         |                                              | 30,069 |                              |         |                                                          |  
|                                                      |                                 |                          |         |                        |         |                          |         |                                              |        |                              |         |                                                           |  
|                                                      |                                 | Operating income (loss)  |         |                        | (16,358 | )                        |         | 46,089                                       |        |                              | 22,214  |                                                           |  
|Interest expense                                      |                                 |                          | 33,901  |                        |         | 14                       |         |                                              |       |                              |         | 5,445                                                     |  
|Interest income                                       |                                 |                          | (88     | )                      |         | (112                     | )       |                                              | (62    | )                            |         |                                                          |  
|Intercompany interest                                 |                                 |                          | (2,554  | )                      |         |                         |         |                                              | 7,999  |                              |         | (5,445                                                    | )
|Foreign currency transaction (gain) loss              |                                 |                          | (3,025  | )                      |         | 410                      |         |                                              | 500    |                              |         |                                                          |  
|Gain on interest rate and foreign currency rate swaps |                                 |                          | 3,248   |                        |         |                         |         |                                              |       |                              |         |                                                          |  
|Redeemable preferred stock dividend expense           |                                 |                          |        |                        |         |                         |         |                                              |       |                              |         | 4,565                                                     |  
|Equity in loss (income) of subsidiaries               |                                 |                          |        |                        |         |                         |         |                                              |       |                              |         | (8,372                                                    | )
|                                                      |                                 |                          |         |                        |         |                          |         |                                              |        |                              |         |                                                           |  
|Income (loss) before income taxes                     |                                 |                          | (47,840 | )                      |         | 45,777                   |         |                                              | 13,777 |                              |         | 3,807                                                     |  
|Income tax expense (benefit)                          |                                 |                          | (14,932 | )                      |         | 17,395                   |         |                                              | 4,522  |                              |         |                                                          |  
|                                                      |                                 |                          |         |                        |         |                          |         |                                              |        |                              |         |                                                           |  
|                                                      |                                 | Net income (loss)        |         | $                      | (32,908 | )                        | $       | 28,382                                       |        | $                            | 9,255   |                                                           | $
|                                                      |                                 |                          |         |                        |         |                          |         |                                              |        |                              |         |                                                           |  

36

---





BRAND ENERGY & INFRASTRUCTURE SERVICES, INC.  CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS  FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2005  (Restated)

|                                                     |  | Brand Services, Inc. |          | Guarantor Subsidiaries |   | Non-Guarantor Subsidiary |   | Brand Energy & Infrastructure Services, Inc. |        | Adjustments and Eliminations |   | Brand Energy & Infrastructure Services, Inc. Consolidated |  
|---------------------------------------------------- |  | -------------------- | -------- | ---------------------- | - | ------------------------ | - | -------------------------------------------- | ------ | ---------------------------- | - | --------------------------------------------------------- | -
|CASH FLOWS FROM OPERATING ACTIVITIES:                |  |                      |          |                        |   |                          |   |                                              |        |                              |   |                                                           |  
|Net cash provided by (used for) operating activities |  | $                    | (12,817  | )                      | $ | 43,572                   |   | $                                            | (2,310 | )                            | $ |                                                          |  
|                                                     |  |                      |          |                        |   |                          |   |                                              |        |                              |   |                                                           |  
|CASH FLOWS FROM INVESTING ACTIVITIES:                |  |                      |          |                        |   |                          |   |                                              |        |                              |   |                                                           |  
|Purchases of property and equipment                  |  |                      | (13,728  | )                      |   | (6,048                   | ) |                                              | (3,002 | )                            |   |                                                          |  
|Proceeds from sales of used rental equipment         |  |                      | 1,771    |                        |   | 886                      |   |                                              | 1,061  |                              |   |                                                          |  
|Payments for acquisitions                            |  |                      | (217,626 | )                      |   |                         |   |                                              |       |                              |   |                                                          |  
|                                                     |  |                      |          |                        |   |                          |   |                                              |        |                              |   |                                                           |  
|Net cash used for investing activities               |  |                      | (229,583 | )                      |   | (5,162                   | ) |                                              | (1,941 | )                            |   |                                                          |  
|                                                     |  |                      |          |                        |   |                          |   |                                              |        |                              |   |                                                           |  
|CASH FLOWS FROM FINANCING ACTIVITIES:                |  |                      |          |                        |   |                          |   |                                              |        |                              |   |                                                           |  
|Payments of long-term debt                           |  |                      | (1,247   | )                      |   |                         |   |                                              |       |                              |   |                                                          |  
|Proceeds from long-term debt                         |  |                      | 185,153  |                        |   |                         |   |                                              |       |                              |   |                                                          |  
|Proceeds from redeemable preferred stock             |  |                      |         |                        |   |                         |   |                                              |       |                              |   | 30,000                                                    |  
|Intercompany loans and advances                      |  |                      | 24,256   |                        |   | (38,344                  | ) |                                              | 14,088 |                              |   |                                                          |  
|Capital investment                                   |  |                      | 29,400   |                        |   |                         |   |                                              |       |                              |   | (29,400                                                   | )
|Payments of deferred financing fees                  |  |                      | (4,996   | )                      |   |                         |   |                                              |       |                              |   | (600                                                      | )
|Payments on capital lease obligations                |  |                      | (248     | )                      |   | (66                      | ) |                                              |       |                              |   |                                                          |  
|                                                     |  |                      |          |                        |   |                          |   |                                              |        |                              |   |                                                           |  
|Net cash provided by (used for) financing activities |  |                      | 232,318  |                        |   | (38,410                  | ) |                                              | 14,088 |                              |   |                                                          |  
|                                                     |  |                      |          |                        |   |                          |   |                                              |        |                              |   |                                                           |  
|INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS     |  |                      | (10,082  | )                      |   |                         |   |                                              | 9,837  |                              |   |                                                          |  
|CASH AND CASH EQUIVALENTS, beginning of period       |  |                      | 13,336   |                        |   |                         |   |                                              | 1,525  |                              |   |                                                          |  
|                                                     |  |                      |          |                        |   |                          |   |                                              |        |                              |   |                                                           |  
|CASH AND CASH EQUIVALENTS, end of period             |  | $                    | 3,254    |                        | $ |                         |   | $                                            | 11,362 |                              | $ |                                                          |  
|                                                     |  |                      |          |                        |   |                          |   |                                              |        |                              |   |                                                           |  

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BRAND ENERGY & INFRASTRUCTURE SERVICES, INC.  CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS  FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2006

|                                                              |  | Brand Services, Inc. |         | Guarantor Subsidiaries |   | Non-Guarantor Subsidiary |   | Brand Energy & Infrastructure Services, Inc. |         | Adjustments and Eliminations |   | Brand Energy & Infrastructure Services, Inc. Consolidated | 
|------------------------------------------------------------- |  | -------------------- | ------- | ---------------------- | - | ------------------------ | - | -------------------------------------------- | ------- | ---------------------------- | - | --------------------------------------------------------- | 
|CASH FLOWS FROM OPERATING ACTIVITIES:                         |  |                      |         |                        |   |                          |   |                                              |         |                              |   |                                                           | 
|Net cash provided by (used for) operating activities          |  | $                    | (19,628 | )                      | $ | 68,829                   |   | $                                            | 1,420   |                              | $ |                                                          | 
|                                                              |  |                      |         |                        |   |                          |   |                                              |         |                              |   |                                                           | 
|CASH FLOWS FROM INVESTING ACTIVITIES:                         |  |                      |         |                        |   |                          |   |                                              |         |                              |   |                                                           | 
|Purchases of property and equipment                           |  |                      | (31,321 | )                      |   | (9,817                   | ) |                                              | (13,398 | )                            |   |                                                          | 
|Proceeds from sales of used rental equipment                  |  |                      | 2,909   |                        |   | 4,256                    |   |                                              | 4,743   |                              |   |                                                          | 
|Payments for acquisitions                                     |  |                      | (31,939 | )                      |   |                         |   |                                              | (3,054  | )                            |   |                                                          | 
|                                                              |  |                      |         |                        |   |                          |   |                                              |         |                              |   |                                                           | 
|Net cash used for investing activities                        |  |                      | (60,351 | )                      |   | (5,561                   | ) |                                              | (11,709 | )                            |   |                                                          | 
|                                                              |  |                      |         |                        |   |                          |   |                                              |         |                              |   |                                                           | 
|CASH FLOWS FROM FINANCING ACTIVITIES:                         |  |                      |         |                        |   |                          |   |                                              |         |                              |   |                                                           | 
|Payments of long-term debt                                    |  |                      | (2,056  | )                      |   |                         |   |                                              |        |                              |   |                                                          | 
|Short-term bank borrowings                                    |  |                      | 32,500  |                        |   |                         |   |                                              |        |                              |   |                                                          | 
|Payments of deferred financing fees                           |  |                      | (2,540  | )                      |   |                         |   |                                              |        |                              |   |                                                          | 
|Intercompany loans and advances                               |  |                      | 56,133  |                        |   | (64,419                  | ) |                                              | 8,286   |                              |   |                                                          | 
|Payments on capital lease obligations                         |  |                      | (90     | )                      |   | (140                     | ) |                                              |        |                              |   |                                                          | 
|                                                              |  |                      |         |                        |   |                          |   |                                              |         |                              |   |                                                           | 
|Net cash provided by/(used for) financing activities          |  |                      | 83,947  |                        |   | (64,559                  | ) |                                              | 12,712  |                              |   |                                                          | 
|                                                              |  |                      |         |                        |   |                          |   |                                              |         |                              |   |                                                           | 
|INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS              |  |                      | 3,968   |                        |   | (1,291                   | ) |                                              | (2,003  | )                            |   |                                                          | 
|IMPACT OF FOREIGN CURRENCY RATES ON CASH AND CASH EQUIVALENTS |  |                      |        |                        |   |                         |   |                                              | (71     | )                            |   |                                                          | 
|CASH AND CASH EQUIVALENTS, beginning of period                |  |                      | 355     |                        |   | 1,291                    |   |                                              | 4,933   |                              |   |                                                          | 
|                                                              |  |                      |         |                        |   |                          |   |                                              |         |                              |   |                                                           | 
|CASH AND CASH EQUIVALENTS, end of period                      |  | $                    | 4,323   |                        | $ |                         |   | $                                            | 2,859   |                              | $ |                                                          | 
|                                                              |  |                      |         |                        |   |                          |   |                                              |         |                              |   |                                                           | 

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

This Form 10-Q of Brand Energy & Infrastructure Services, Inc. and subsidiaries (the "Company") includes forward-looking
statements that are subject to risks and uncertainties. All statements other than statements of historical facts included in this Form 10-Q that address activities, events or
developments that we expect, believe or anticipate will or may occur in the future are forward-looking statements. Forward-looking statements give our current expectations and projections relating to
the financial condition, results of operations, plans, objectives, future performance and business of the Company and its subsidiaries. You can identify these statements by the fact that they do not
relate strictly to historical or current facts. These statements may include words such as "anticipate," "believe," "estimate," "could," "expect," "future," "intend," "plan," "predict," "project," and
other words and terms of similar meaning in connection with any discussion of the timing or nature of future operating or financial performance or other events.

These
forward-looking statements are based on our expectations and beliefs concerning future events affecting us. They are subject to uncertainties and factors relating to our operations
and business environment, all of which are difficult to predict and many of which are beyond our control. Although we believe that the expectations reflected in our forward-looking statements are
reasonable, we do not know whether our expectations will prove correct. They can be affected by inaccurate assumptions we might make or by known or unknown risks and uncertainties. Many factors
mentioned in our discussion in this 10-Q, including the risks outlined under "Risk Factors," will be important in determining future results. Actual future results may vary materially as a
result of various risks and uncertainties, including but not limited to:



Because
of these factors, we caution that investors should not place undue reliance on any of our forward-looking statements. Further, any forward-looking statement is relevant only as
of the date on which it is made, and, except as required by law, we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which it is
made or to reflect the occurrence of anticipated or unanticipated events or circumstances.

The
following discussion and analysis should be read in conjunction with the attached condensed consolidated financial statements and notes thereto.

Overview

We believe we are the largest North American provider of scaffolding work access services, based on management's knowledge of the industry and publicly available
information about our competitors. Work access services include design engineering, project management, labor for the erection and dismantlement of complex scaffolding systems and the associated
equipment rental. Additionally, we provide concrete

39

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forming
and shoring and specialty craft labor services. We primarily service North American energy-related markets, with clients in the refining, chemical, power generation, offshore oil production
and other industries. In energy-related markets, our services support the ongoing maintenance, inspection and periodic overhauls ("turnarounds") of our customer's facilities. We also provide work
access services associated with the construction of new facilities and the expansion or upgrading of existing sites. In the commercial and infrastructure markets, we support new construction and
renovation projects, including for high-rise buildings, hospitals, airports, churches, bridges, dams and other construction and renovation projects throughout North America and in select
international regions.

Our
work access service offerings facilitate access to our customer's tall and complex structures. The core of our work access business is comprised of work access services for ongoing
maintenance at our customer's facilities, many of which we have serviced for over 20 years. In our forming and shoring business, we provide customized applications that support our customer's
concrete formwork needs. Our modular formwork systems can be deployed more rapidly than custom-made forms, which we believe enables our customers to shorten construction times and thereby
reduce labor costs. We also provide our customers with specialty craft labor services, including insulation, carpentry and safety services. We believe that providing these services strengthens our
relationships with our core customer base and provides us with a source of revenues that requires no additional capital investment.

On
July 29, 2005 we acquired the operations of Aluma Enterprises, a Canada-based provider of work access and forming and shoring services. Approximately 60% of Aluma's business
serves the Canadian refining industry, including the Alberta Oil Sands. Through this acquisition we also acquired a concrete forming and shoring business which has a strong presence in select North
American regions and international markets.

We
deliver our services through an extensive field service organization consisting of 6,000 to 7,000 skilled craftspeople (depending on seasonal needs), 88 field offices
and an additional 74 facilities located at customer sites throughout the United States, Canada and selected international locations.

Restatement of Previously Issued Financial Statements

In the fourth quarter of 2005, we initiated a physical inventory of our scaffolding equipment and reconciled the results of the physical inventory to the amounts
recorded in our books and records. As a result, we identified $14.0 million of scaffolding equipment assets that no longer physically existed.

We
determined that the cause of the $14.0 million in non-existing scaffolding equipment assets was largely attributable to deficiencies in internal controls over two
types of transactions: (i) we did not record all scrap and loss transactions that were recorded in our perpetual scaffolding equipment records in our general ledger and fixed asset system, and
(ii) we did not perform periodic comprehensive reconciliations of its perpetual scaffolding equipment records to amounts recorded in our fixed asset system and other books and records.

As
of the date of the filing of our Form 10-K on April 11, 2006, we could not specifically identify the scaffolding equipment asset write-offs to
distinct fiscal years with any certainty due to the number of transactions, passage of time since many of these transactions have occurred, and the deficiencies in the documentation and controls over
these activities. Accordingly, the full amount of the scaffolding equipment asset write-offs was recorded as a non-cash charge in the fourth quarter of 2005.

In
mid-2005, we began the construction of a "Data Warehouse" to consolidate our data stored in various individual personal computers and servers at numerous Company and
customer locations so that detailed analysis of that data could be performed on a company-wide basis. During the second and third quarters of 2006, as part of the "Data Warehouse" project,
our information technology department discovered archived data files that included historical perpetual inventory records. One of the outcomes of

40

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that
project was that we were able to determine that there was sufficient evidence to allow us to identify the $14.0 million scaffolding equipment write-off to distinct
fiscal periods.

In
May 2006 we filed a registration statement on Form S-1 with the Securities and Exchange Commission relating to a proposed initial public offering of our
common stock. On September 22, 2006, we announced that, in connection with a review of our Form S-1 by the Securities and Exchange Commission, we would
re-examine our previously issued financial statements for fiscal 2005 and prior years to determine if we had properly accounted for the $14.0 million write-off of
scaffolding equipment that we had recorded in the fourth quarter of fiscal 2005. On November 1, 2006, we completed our review and concluded that we would restate our previously issued financial
statements for fiscal 2005 and prior years because a portion of the $14 million charge does not apply to fiscal 2005 and was material to 2005 and prior period results.

The
principal impacts of the restatement were to change the timing of recognition of the non-cash write-offs of scaffolding equipment, to adjust depreciation
expense as a result of the change in timing of scaffolding equipment write-offs, and to adjust the provision for deferred income taxes for these changes. Additionally, because a
significant portion of the $14.0 million scaffolding equipment write-off relates to periods prior to October 17, 2002, the restatement also resulted in an increase in
goodwill of $6.9 million. Considering the restatement only impacted the timing of reporting non-cash expenses and deferred income taxes, the restatement did not result in a change
in reported amounts for cash flows from operating activities, cash flows from investing activities and cash flows from financing activities in the related consolidated statements of cash flows,
although the components of cash flows from operations were restated.

A
summary of the effects of the restatement on our consolidated balance sheet and consolidated statements of operations are included in note 2 to our financial statements.

Key Factors Affecting Our Business

Our operating results are influenced by a broad range of factors, including those outlined below.



The market for industrial work access solutions and forming and shoring services experiences seasonal fluctuations in demand. For instance, because of high
gasoline demand for automobiles during the summer, most refineries prefer to close down for turnarounds during the spring and fall. In addition, cold temperatures in the first and fourth fiscal
quarters typically limit activity on maintenance and capital projects in the Alberta Oil Sands. Our utility clients follow a similar pattern. On the other hand, non-residential
construction, particularly in the renovation business, occurs throughout the year, but is heaviest in the second and third fiscal quarters. The effects of seasonal fluctuations in demand for our
services may lead to:





Historically, the demand for our industrial work access and forming and shoring services has varied significantly from year to year, principally due to our
dependence on maintenance and capital spending by

41

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companies
in the refining, petrochemical, chemical, utility, pulp and paper and building construction and renovation industries. The spending of companies in these cyclical industries, in turn, is
influenced by the strength of the markets for their products as well as regulatory, macroeconomic and geopolitical factors. For example:



Our acquisition of Aluma significantly increased our exposure to exchange rate fluctuations between the Canadian dollar and the U.S. dollar. We record the
financial results of our non-U.S. operations in U.S. dollars. Consequently, a weakening of the Canadian dollar against the U.S. dollar would reduce the contribution,
in U.S. dollar terms, of our Canadian operations, even if, in local currency terms, the results of these Canadian subsidiaries improved or remained the same relative to prior years.
Approximately 30% of our revenues are generated in Canadian dollars. In future years we expect our Canadian results of operations will be an increasingly important component of our consolidated
results of operations. As a result, the impact of changes in the exchange rate between the Canadian dollar and the U.S. dollar in future years will be increasingly important to our reported
levels of revenues and operating income. In general we do not hedge against our translational exposure to changes in the U.S. dollar/Canadian dollar exchange rate, though we do hedge to some
extent our exposure to certain Canadian dollar receivables, as described below.



As of September 30, 2006, our total long-term indebtedness was $497.1 million of which approximately $289.5 million was subject
to variable interest rates. If interest rates were to increase by 100 basis points, our annualized cash interest expense would increase by approximately $2.9 million.

42

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We operate in a highly competitive industry. The work access solutions industry is comprised of a few large work access solutions companies and a large number of
engineering and construction firms, multi-craft providers and other local work access solutions providers. As a result, we compete on the basis of delivered price as well as on the basis of customer
service and safety. Our 10 largest customers accounted for 36% of our 2005 revenues. The loss of any of our large customers to a competitor or otherwise would have a material adverse effect on
our financial condition, results of operations and cash flows.

Key Factors Affecting Our Results



Our revenues consist of revenues from labor, equipment rental and equipment sales. We derive the bulk of our revenues from the labor services we provide in
connection with the rental of scaffolding equipment. We generally rent equipment under month-to month rental contracts. We provide services, such as the erection and dismantling of
scaffolding or forming and shoring units under both price-per-unit and time-and-materials contracts. We typically provide work access services for
ongoing maintenance at our customer's
facilities, many of which we have serviced for over 20 years. Turnarounds occur every one to four years depending on the industry and the type of turnaround being performed. Although some
turnarounds may be postponed for a period of time, they are a necessary component of maintaining industrial facilities and are required to ensure the safe and efficient operation of these facilities.
While the postponement of scheduled turnarounds causes fluctuations in our quarterly and annual results, ongoing maintenance and turnarounds provide stable and recurring revenues. Historically,
approximately 75% of our revenues have been attributable to serving the industrial market with ongoing maintenance, turnarounds and capital projects of industrial facilities.

We
derive incremental revenues by providing specialty craft services, such as carpentry, insulation and safety services. We also periodically sell new scaffolding and concrete forming
and shoring equipment to third parties.



Our operating expenses consist of the cost of labor, the cost of equipment rental revenues, the cost of equipment sales, and divisional operating expenses, the
most significant of which is the cost of labor. The cost of labor as a percentage of operating expenses was 79.4%, 80.3% and 78.7% for fiscal years 2003, 2004 and 2005, respectively, and 80.4% and
79.0% for the nine months ended September 30, 2005 and 2006, respectively. The cost of labor consists of salaries and related payroll expenses that we pay to our employees who provide our work
access and forming and shoring services. In periods of high demand for our services, we may supplement our permanent workforce with as many as 5,000 temporary workers. During periods of intense
competition for such temporary workers, our cost of labor increases. For example, a tightening labor market along the Gulf Coast and in Western Canada increased our cost of labor in recent periods.
Insurance and related expenses represent a significant component of our cost of labor. In 2005 our insurance costs of $10.6 million represented 3.6% of our cost of labor. If our insurance
premiums or related costs rise significantly in the future, our profitability could be reduced.

The
cost of equipment rental, the cost of equipment sales and divisional operating expenses represented 12.1%, 2.7% and 6.5%, respectively of our operating expenses for the year ended
December 31, 2005 and 10.2%, 4.7% and 6.2%, respectively, of our operating expenses for the nine months ended September 30, 2006. The cost of equipment rentals principally consists of
depreciation expense and the costs to transport our rental equipment to and from our customer sites. The cost of equipment sales consists of our purchase costs of the equipment sold. Divisional
operating expenses are the costs to staff and operate our field locations. These costs tend to vary directly with total revenues.

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We use the gross margin percent (gross profit divided by revenues) of each of our revenue sources as a factor in monitoring the profitability of our business.
Because we price our services as a function of our estimated costs, we expect our gross margin to be relatively stable despite the variable cost of labor. Consequently, we expect that our labor
revenues will vary directly with our cost of labor. Nevertheless, although our contracts typically provide for re-pricing on an annual basis, volatility in our variable costs, principally
the cost of labor, may have a short term impact on our gross margin to the extent that pricing adjustments cannot be made immediately to reflect such increased costs.

Because
a large component of our cost of rental revenues is depreciation expense, which is a semi-variable cost, we expect that our gross margins on rental revenues should
increase as rental revenues increase.



Our selling and administrative expenses consist of salaries and other payroll-related costs for our executive, administrative, financial and marketing functions,
as well as certain taxes, insurance and professional fees.



Our interest expense includes the interest on our long-term debt, any borrowings under our revolving debt facility and notes payable, commitment fees
for our credit facility and amortization of the related fees to execute required financing arrangements. As a result of our high debt levels, interest expense has represented a significant proportion
of our expenses during the periods under review.



When we acquired the assets and operations of Aluma, we increased our exposure to changes in foreign currency exchange rates because the majority of Aluma's
assets and operations are located in Canada. In addition, we increased our exposure to changes in interest rates because the debt we assumed to acquire Aluma is variable interest rate debt. To
mitigate our risk related to changes in the rate of exchange between the Canadian dollar and the U.S. dollar and to mitigate our risk related to rising interest rates, we entered into several
interest rate and foreign currency swaps during 2005. As we more fully describe in note 14 of our consolidated financial statements, we determined that we would not account for these as hedges.
As a result, we record the change in fair market value of these financial instruments in this line of our statement of operations.



To fund the acquisition of Aluma, our U.S. subsidiary, Brand Services, borrowed CDN$70.3 million under our credit facility and loaned
CDN$132.0 million to our Canadian subsidiary to purchase the Canadian assets of Aluma. As a result, we have a Canadian dollar denominated net receivable on the books of our
U.S. subsidiary which changes in value as the rate of exchange rate between the Canadian dollar and the U.S. dollar changes. We record this change in value in this line of our statement
of operations. In particular, because we have a net Canadian receivable on the books of a U.S. subsidiary, we will record unrealized gains if the Canadian dollar strengthens against the
U.S. dollar. On the other hand, if the Canadian dollar weakens against the U.S. dollar, we will record unrealized losses.



We issued redeemable preferred stock during 2005 to finance the acquisition of Aluma. As we more fully discuss in note 12 of our consolidated financial
statements, we account for the redeemable preferred

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stock
as debt because it has a mandatory redemption feature. As a result, we charge the related dividends to expense in this line of our statement of operations.

Critical Accounting Policies

A summary of our significant account policies is included in note 3 to our consolidated financial statements. The preparation of financial
statements requires our management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Our estimates and assumptions are
based on historical experiences and changes in the business environment. However, actual results may differ from estimates under different conditions, sometimes materially. Critical accounting
policies and estimates are defined as those that are both most important to the portrayal of our financial condition and results and require management's most subjective judgments. Our most critical
accounting policies and estimates are described below.



We have made several acquisitions in recent years. We have accounted for all of these acquisitions in accordance with the purchase method, and accordingly, we
have included the results of their operations in our consolidated statement of operations from the respective date of acquisition. We allocated the purchase price of each acquisition to its
identifiable assets and liabilities, and we recorded any excess of the cost over the fair value of the net identifiable assets acquired as goodwill. Our initial allocation of purchase price is based
on preliminary information, which is subject to adjustments upon obtaining complete valuation information. While the delay in finalizing purchase price allocations in connection with our acquisitions
has historically not had a material impact on our consolidated results of operations, we cannot guarantee the that this will be the case in the future.



We account for our long-lived assets, excluding goodwill and tradenames, in accordance with SFAS No. 144, which requires us to assess
the recoverability of these assets when events or changes in circumstances indicate that the carrying amount of the long-lived asset might not be recoverable. If impairment indicators
exist, we determine whether the projected undiscounted cash flows, without regard to interest expense or future fluctuations in foreign currency exchange rates, will be sufficient to cover the
carrying value of such assets. This requires our management to make significant judgments about the expected future cash flows of the asset group. The future cash flows are dependent on general and
economic conditions and are subject to change.

We
account for goodwill and tradenames in accordance with SFAS No. 142, which requires us to test goodwill and tradenames for impairment annually and whenever events occur
or circumstances change that would, more likely than not, reduce the fair value of the reporting unit below its carrying value. For purposes of SFAS No. 142, we have determined that we
will perform our impairment analysis on an operating segment level. Because quoted market prices are not available, management uses the present value of expected future cash flows to estimate fair
value. Management must make significant judgments and estimates about future conditions to estimate future cash flows. With respect to our October 1, 2003 impairment test, we estimated that, on
an interest-free basis, we would generate cash flows from operations of $50.7 million in fiscal 2004 and spend $12.3 million on net capital expenditures. We actually
generated $53.2 million in cash flows from operations on an interest-free basis (actual cash flows from operations plus cash interest expense less taxes at 38% on the cash interest
expense) and spent $10.1 million on net capital expenditures (purchases of property and equipment less proceeds from sales of property and equipment). With respect to our October 1, 2004
impairment test, we estimated that, on an interest-free basis, we would generate cash flows from operations of $40.6 million in fiscal 2005 and spend $13.5 million on net
capital expenditures. We actually generated $45.1 million in cash flows from operations on an interest-free basis and spent $11.7 million on net capital expenditures
(purchases of

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property
and equipment less proceeds from sales of property and equipment). Unforeseen events and changes in circumstances and market conditions, including general economic and competitive conditions,
could result in significant changes in those estimates and material charges to income.



As part of our ongoing business, we make payments on claims for workers' compensation and health benefits. We have purchased insurance coverage for large claims.
We estimate our future workers' compensation and health benefit liabilities using actuarial methods based upon historical data for payment patterns, cost trends, utilization of healthcare services and
other relevant factors. These liabilities take into account incurred but not reported (IBNR) claims. While we believe our estimated liabilities for workers' compensation and health benefit claims of
$17.6 million as of September 30, 2006, are adequate and that the judgment applied is appropriate, such estimated liabilities could differ materially from our actual future liabilities
related to workers' compensation and health benefit claims.



We generally rent equipment under month-to-month rental contracts and provide services under both price-per-unit
and
time-and-materials short-term contracts. Price-per-unit contracts establish a fixed price per unit of scaffolding deployed. We recognize
revenues on price-per-unit contracts over the contractual period based upon the percentage of completion method. We determine percentage of completion by comparing costs
actually incurred on each contract to total estimated costs to complete each contract. We recognize losses on individual contracts as soon as we determine that our total estimated costs exceed our
fixed fee arrangement for that contract. We recognize revenues for services provided on a time-and-materials basis when we provide the related service.

We
periodically sell new and used scaffolding and concrete forming and shoring equipment directly to third parties. We recognize revenue upon shipment and record as operating expense the
cost of the scaffolding or concrete forming equipment sold on the first-in first-out method. In addition, we periodically sell used scaffolding and concrete forming and shoring
equipment to third parties, primarily to rental customers. We recognize revenue for the proceeds of such sales and record as operating expense the net book value of the scaffolding or concrete forming
equipment. We determine net book value assuming the oldest inventory is sold first, as we maintain inventory records on a group basis.



As further discussed in Note 15 to our consolidated financial statements, as a means of compensating our employees for past and future service, our
employees are granted ownership units of Brand LLC. Brand LLC currently owns 100% of our outstanding common stock.

Prior
to January 1, 2004, we accounted for the issuance of these units using the intrinsic value method under the recognition and measurements provisions of Accounting Principles
Board Opinion 25, Accounting for Stock Issued to Employees (APB25). As a result, we did not record any compensation expense related to the issuance of Brand LLC ownership units to employees in
fiscal 2003.

Effective
January 1, 2004, we adopted the fair value recognition provisions of SFAS No. 123, "Accounting for Stock Based Compensation." We selected the
modified prospective transition method under the provisions of SFAS No. 148, "Accounting for Stock Based Compensation Transition and Disclosure," which requires us to expense
stock options prospectively, beginning in the year of adoption. We expensed $0.2 million and $1.4 million of stock options for the years ended December 31, 2004 and 2005, recorded
in our consolidated statements of operations under non-cash compensation. We also determined that, if we had adopted this accounting as of January 1, 2003, we would have recorded
$0.8 million in stock option expense for the year ended December 31, 2003.

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Effective
January 1, 2006, we adopted the provisions of Statement of Financial Accounting Standards ("SFAS") No. 123 (Revised 2004) "Share-Based Payment"
("SFAS No. 123(R)") using the modified prospective method, which requires measurement of compensation cost for all stock-based awards at fair value on date of grant and recognition of
compensation over the service periods for awards expected to vest.

Given
the lack of a public market for our common stock and for the ownership units of Brand LLC, during 2005 we engaged an independent valuation specialist to determine the fair
value of the Brand LLC ownership units on a retrospective basis for each quarter of 2005. We recognized that the purchase of Aluma was a milestone event in the history of our company that
increased the value of our common stock and the Brand LLC ownership units. In establishing the estimates of fair value, the specialist considered the guidance set forth in the AICPA Practice
Guide, "Valuation of Privately-Held-Company Equity Securities Issued as Compensation" and made retrospective determinations of fair value.

Determining
the fair value of our common stock and the Brand LLC ownership units requires making complex and subjective judgments. Our approach to valuation is based on a
discounted future cash flow approach that uses our estimates of revenue, driven by assumed market growth rates, and estimated costs as well as appropriate discount rates. These estimates are
consistent with the plans and estimates that we use to manage our business. There is inherent uncertainty in making these estimates. In April 2006 we started the process of an initial public
offering of our common stock by filing a Form S-1 with the Securities and Exchange Commission. Although it is reasonable to expect that the completion of an initial public
offering of our common stock will add value to the shares because they will have increased liquidity and marketability, the amount of additional value cannot be measured with precision
or certainty.

To
determine the fair value of our common stock and the Brand LLC ownership units, we also must make certain assumptions related to the possibility of a taxable sale of our
company. These assumptions include a probability-weighted time frame of such a sale. In determining the value of our common stock and the Brand LLC ownership units in 2004, we used a
probability weighted time frame for a taxable sale of our company of five years. In 2005, we reduced our estimate of the time frame to three years. In general, shortening the time frame for a taxable
sale has the impact of increasing the
estimate of fair value of our common stock in an immaterial amount because the current fair value of the common stock and the Brand LLC ownership units is based upon a discounted value of the
future anticipated sales proceeds. The discount rate used is the risk-free rate of return specified by SFAS No. 123. For the year ended December 31, 2005, this
discount rate ranged from 3.45% to 4.18%.

As
further described in note 15 to our condensed consolidated financial statements, certain of the Brand LLC ownership units have performance-based vesting
provisions related to the value of our company. The determination date for the vesting of these units is the earlier of (i) a liquidity event as defined in Brand LLC's limited liability
company agreement or (ii) December 31, 2009. In determining compensation expense related to performance-based Brand LLC ownership units, based upon our estimates of the fair value
of our company, we estimated that 16.7% of these units would vest upon a liquidity event or at December 31, 2009. If the value of our company is actually higher than our estimates at either of
these dates, the actual number of performance-based units that vest could be higher than our estimate. As a result, we would record additional compensation expense related to these units if we
determine that we need to change our estimate of vesting percentages.

As
of December 31, 2005, we estimate the fair value of Brand LLC ownership units issued to employees to be $6.2 million. As further discussed in note 16
to our consolidated financial statements for the year ended December 31, 2005, we have or will recognize $2.5 million in non-cash compensation expense related to these
units. There are two reasons that the fair value of the units is significantly more than the amount of compensation expense that we have or will recognize related to these units.



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In
May 2006, we initiated the process of an initial public offering ("IPO") of our common stock. If we are successful in completing this process, we expect to record a significant
charge to earnings as of the date of the completion of the IPO for compensation expense related to these Brand LLC ownership units for the following reasons:



Acquisitions

On July 29, 2005, we purchased substantially all of the operations and the net operating assets of Aluma. The purpose of the transaction was to expand our
market position in Canada and obtain entry into the forming and shoring business. The results of Aluma are included in our consolidated financial statements from July 29, 2005. The aggregate
purchase price for Aluma was $241.4 million, consisting of purchase price and acquisition related costs of $217.6 million and assumed liabilities of $23.8 million. The acquisition
was principally financed through borrowings under our credit facility (See note 11 to our condensed consolidated financial statements), and through the issuance of our redeemable
preferred stock (See note 12 to our condensed consolidated financial statements). In connection with the acquisition, we recorded goodwill of $45.0 million based upon the
allocation of the excess of the purchase price over the net fair value of the assets acquired.

On
August 3, 2006, we purchased substantially all of the operations and the net operating assets of Interstate. The purpose of the transaction was to expand the Company's
geographic presence on the West Coast, the Mid-West, and the Northeast and to augment the Company's customer base in the oil refining and utilities industries. The results of Interstate
are included in our consolidated financial statements from August 3, 2006 through September 30, 2006. The aggregate purchase price for Interstate was $34.7 million, consisting of
purchase price and acquisition related costs of $31.7 million and assumed liabilities of $3.0 million. The acquisition was principally financed through borrowings on the revolving
facility under our credit facility (See note 11 to our condensed consolidated financial statements). In connection with the acquisition, we recorded goodwill of
$7.4 million based upon the allocation of the excess of the purchase price over the net fair value of the assets acquired.

Change in Accounting Principle

Effective January 1, 2006, we adopted the provisions of Statement of Financial Accounting Standards ("SFAS") No. 123 (Revised 2004) "Share-Based
Payment" ("SFAS No. 123(R)") using the modified prospective method, which requires measurement of compensation cost for all stock-based awards at fair

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value
on date of grant and recognition of compensation over the service periods for awards expected to vest.

Previously,
effective January 1, 2004, we adopted the fair value recognition provisions of SFAS No. 123, "Accounting for Stock-Based Compensation". We
selected the modified prospective transition method under the provisions of SFAS No. 148, "Accounting for Stock-Based Compensation-Transition and Disclosure," which requires us to
expense stock options prospectively, beginning in the year of adoption.

Because
we had already adopted the fair value recognition provisions of SFAS No. 123, as further discussed in footnote 15 of our consolidated financial statements, the
impact of adoption of SFAS No. 123(R) did not have a material impact on our results of operations or financial position.

Results of Operations

Three Months Ended September 30, 2006 as Compared to Three Months Ended September 30, 2005

Revenue. Total revenues increased to $181.2 million for the three months ended September 30, 2006 from $129.5 million for the three months
ended September 30, 2005, which represented an increase of $51.7 million or 39.9%. The increase in revenues was principally attributable to the acquisitions of Aluma and Interstate,
which accounted for $31.2 million, or 60.3%, of this increase, and strong demand for work access and forming and shoring solutions in all of our markets in 2006. Our revenues derived from the
refinery and utility market increased $16.0 million from the same period in the prior year driven by increased turnaround and new construction activity particularly in the southeast and
southwest as well as northern United States. The Commercial market increased $4.4 million compared to the same prior year period driven by strong growth in forming and shoring.

Gross
Profit. Gross profit for the three months ended September 30, 2006 was $45.1 million or 24.9% of revenues compared to 2005 gross profit of $33.5 million or
25.8% of revenues. The acquisitions of Aluma and Interstate accounted for $8.0 million of this increase.

Gross
profit on labor services for the three months ended September 30, 2006 increased 20.7% to $16.6 million or 13.8% of labor revenues as compared to the three months
ended September 30, 2005 gross profit on labor services, which was $13.8 million or 15.8% of labor revenues. The acquisitions of Aluma and Interstate accounted for $1.4 million of
2006 labor gross profit. The decrease in labor gross margin percentage was principally due to the Aluma acquisition and higher than normal labor costs in the Gulf Coast region. Gross profit on
equipment rentals increased 41.8% to $33.8 million in 2006 or 68.6% of equipment revenues as compared to 2005 gross profit on equipment rentals of $23.8 million or 64.2% of equipment
rental revenues. The acquisitions of Aluma and Interstate accounted for $6.8 million of 2006 equipment gross profit. The increase in gross margin on equipment rental was driven by the Aluma
acquisition and a 5.1% increase in equipment rental revenues in our existing business while total equipment rental costs for our existing business decreased 9.6% between years. Divisional operating
costs increased 48.4% to $9.7 million in 2006 or 5.3% of total revenues as compared to 2005 divisional operating costs of $6.5 million or 5.0% of total revenues. The acquisitions of
Aluma and Interstate accounted for $1.4 million of the increases in divisional operating costs.

Selling
and Administrative Expenses. Selling and administrative expenses increased $8.2 million to $30.5 million for the three months ended September 30, 2006. The
acquisitions of Aluma and Interstate accounted for $5.0 million of the increase. Selling and administrative expenses also increased as a result of increases in compensation expense of
$0.9 million, travel expense of $0.4 million and bonus and sales commission expenses of $0.4 million.

Operating
Income. As a result of the factors discussed above, operating income increased by $3.5 million to $14.6 million for the three months ended September 30,
2006 from $11.1 million for the three months ended September 30, 2005.

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Interest
Expense. Interest expense increased by $2.3 million to $13.4 million for the three months ended September 30, 2006, from $11.1 million for the three
months ended September 30, 2005. This increase was primarily due to the impact of higher interest rates on our outstanding senior debt under our credit facility, the interest expense in respect
of the additional $185.0 million in senior debt under our credit facility drawn in connection with the acquisition of Aluma and the compounding effect of interest on our 13% senior subordinated
pay-in-kind notes due 2013.

Redeemable
Preferred Stock Dividend Expense. Preferred stock dividend expense in 2006 arose from our issuance in July 2005 of preferred stock to finance the acquisition of Aluma.
As further discussed in note 12 to our consolidated financial statements, because the preferred stock has a mandatory redemption date, it is reflected as debt in our consolidated
financial statements and the related dividends are recorded as preferred stock dividend expense.

Foreign
Currency Transaction (Gain) Loss. On July 29, 2005 Brand Services borrowed CDN$70.3 million under our credit facility to fund the acquisition of Aluma.
Simultaneously, Brand Services loaned CDN$132.0 million to its Canadian subsidiary to purchase the Canadian assets of Aluma. As a result of these transactions, Brand Services has a net
receivable exposure of approximately CDN$61.7 million on which it recognizes currency gains and losses. From June 30, 2006 to September 30, 2006, the U.S. dollar
strengthened against the Canadian dollar resulting in a foreign currency transaction loss of $0.3 million.

(Gain)
Loss on Interest and Foreign Currency Rate Swaps. During the second half of 2005 we entered into several interest and currency swaps to mitigate our interest rate exposure in
connection with our variable interest rate debt and our currency rate exposure related to our investment in Aluma. We did not elect to treat these swap agreements as hedges under
SFAS No. 133 and, accordingly, recorded mark-to-market gains and losses in net income. For the three months ended September 30, 2006, we recorded a loss of
$0.9 million on our interest rate swaps and a gain of $0.3 million on our currency swaps.

Provision
for Taxes. For the three months ended September 30, 2006, we recorded a tax provision of $0.7 million on a pre-tax loss of $1.2 million. The
provision for income taxes was recorded at an effective rate of 60.8% for the three months ended September 30, 2005. The primary reason for the increase in the effective tax rate is that we
reported a pretax loss of $1.2 million for the three months ended September 30, 2006 versus pretax income of $2.2 million for the three months ended September 30, 2005. As
a result, the impact of nondeductible items had a significant impact on the effective tax rate in both years. We explain the differences between our effective tax rate and the federal statutory rate
of 34% in greater detail in Note 16 to our consolidated financial statements.

Nine Months Ended September 30, 2006 as Compared to Nine Months Ended September 30, 2005

Revenue. Total revenues increased to $583.1 million for the nine months ended September 30, 2006 from $320.9 million for the nine months
ended September 30, 2005, which represented an increase of $262.1 million or 81.7%. The increase in revenues was principally attributable to the acquisitions of Aluma and Interstate,
which accounted for $205.9 million, or 78.5%, of this increase, and strong demand for work access solutions in all of our markets in 2006. Our revenues derived from the refinery and utility
market increased $45.7 million from the same period in the prior year driven by increased turnaround and new construction activity. The Commercial market also grew $10.5 million driven
by continued strength in new construction and renovation work, particularly in the southeast and western United States.

Gross
Profit. Gross profit for the nine months ended September 30, 2006 was $146.6 million or 25.1% of revenues compared to 2005 gross profit of $77.5 million or
24.2% of revenues. The acquisitions of Aluma and Interstate accounted for $57.3 million of this increase.

Gross
profit on labor services for the nine months ended September 30, 2006 increased 39.4% to $56.1 million or 14.0% of labor revenues as compared to the nine months ended
September 30, 2005 gross

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profit
on labor services, which was $40.2 million or 17.1% of labor revenues. The acquisitions of Aluma and Interstate accounted for $11.6 million of 2006 labor gross profit. The
decrease in labor gross margin percentage was principally due to the Aluma acquisition and higher than normal labor costs in the Gulf Coast region. Gross profit on equipment rentals increased 115.5%
to $104.5 million in 2006 or 70.2% of equipment revenues as compared to 2005 gross profit on equipment rentals of $48.5 million or 64.5% of equipment rental revenues. The acquisitions of
Aluma and Interestate accounted for $46.0 million of 2006 equipment gross profit. The increase in gross margin on equipment rental was driven by the Aluma acquisition and a 12.2% increase in
equipment rental revenues in our existing business while total equipment rental costs for our existing business decreased 3.2% between years. Divisional operating costs increased 78.8% to
$27.0 million in 2006 or 4.6% of total revenues as compared to 2005 divisional operating costs of $15.1 million or 4.7% of total revenues. The acquisitions of Aluma and Interstate
accounted for $8.6 million of the increases in divisional operating costs.

Selling
and Administrative Expenses. Selling and administrative expenses increased $39.3 million to $91.0 million for the nine months ended September 30, 2006. The
acquisitions of Aluma and Interstate accounted for $31.7 million of the increase. Selling and administrative expenses also increased as a result of increases in travel expenses of
$1.0 million, bonus and sales commission expenses of $2.8 million, and legal, and audit and consulting expenses of $0.7 million.

Operating
Income. As a result of the factors discussed above, operating income increased by $29.7 million to $55.6 million for the nine months ended September 30,
2006 from $25.9 million for the nine months ended September 30, 2005.

Interest
Expense. Interest expense increased by $11.2 million to $39.4 million for the nine months ended September 30, 2006, from $28.1 million for the nine
months ended September 30, 2005. This increase was primarily due to the impact of higher interest rates on our outstanding senior debt under our credit facility, the interest expense in respect
of the additional $185.0 million in senior debt under our credit facility drawn in connection with the acquisition of Aluma and the compounding effect of interest on our 13% senior subordinated
pay-in-kind notes due 2013.

Redeemable
Preferred Stock Dividend Expense. Preferred stock dividend expense in 2006 arose from our issuance in July 2005 of preferred stock to finance the acquisition of Aluma.
As further discussed in note 11 to our consolidated financial statements, because the preferred stock has a mandatory redemption date, it is reflected as debt in our consolidated
financial statements and the related dividends are recorded as preferred stock dividend expense.

Foreign
Currency Transaction (Gain) Loss. On July 29, 2005 Brand Services borrowed CDN$70.3 million under the credit facility to fund the acquisition of Aluma.
Simultaneously, Brand Services loaned CDN$132.0 million to its Canadian subsidiary to purchase the Canadian assets of Aluma. As a result of these transactions, Brand Services has a net
receivable exposure of approximately CDN$61.7 million on which it recognizes currency gains and losses. From December 31, 2005 to September 30, 2006, the U.S. dollar
weakened against the Canadian dollar by approximately 2.6% resulting in a foreign currency transaction gain of $2.1 million.

(Gain)
Loss on Interest and Foreign Currency Rate Swaps. During the second half of 2005 we entered into several interest and currency swaps to mitigate our interest rate exposure in
connection with our variable interest rate debt and our currency rate exposure related to our investment in Aluma. We did not elect to treat these swap agreements as hedges under
SFAS No. 133 and, accordingly, recorded mark-to-market gains and losses in net income. For the nine months ended September 30, 2006, we recorded a gain of
$0.1 million on our interest rate swaps and a loss of $3.3 million on our currency swaps.

Provision
for Taxes. For the nine months ended September 30, 2006, the provision for income taxes was recorded at an effective rate of 64.7%. For the nine months ended
September 30, 2005, we recorded a tax provision of $1.1 million on $0.1 million of pretax income. The primary reason for the change in the

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effective
tax rate is that we reported pretax income of $0.1 million for the nine months ended September 30, 2005 versus pretax income of $10.8 million for the nine months ended
September 30, 2006. As a result, the impact of nondeductible items had a significant impact on the effective tax rate in both years. We explain the differences between our effective tax rate
and the federal statutory rate of 34% in greater detail in note 16 to our consolidated financial statements.

Liquidity and Capital Resources

We have historically utilized cash flow from operations and borrowings under our amended credit facility to fund our operations, capital expenditures and working
capital requirements. As of December 31, 2005 and September 30, 2006, we had working capital of $56.5 million and $23.0 million and cash of $6.3 million and
$7.0 million, respectively. Our practices relating to working capital are similar to
those of other industrial service providers. These practices include standard accounts receivable payment terms of 30 days to 60 days, with progress payments required and standard
accounts payable payment terms of 30 days to 60 days. For the nine months ended September 30, 2005 and 2006, cash provided by operating activities was $28.1 million and
$50.7 million, respectively.

As
our work access business grows, so do our working capital requirements. This is largely a function of the timing differences between the payment of our work force and receipt of
payments from customers. If we are successful in our strategy of providing additional services to our customers that are complementary to our work access services, the percentage of our revenues
generated through the provision of labor services may increase, which could cause an increase in our working capital requirements that is in excess of our revenue growth. We believe that our existing
working capital borrowings available under our credit facility and cash flow from operations should provide sufficient resources to support our current revenue levels until 2012. If, however, our
revenues increase or the mix between service and rental revenue changes significantly, we may need to arrange additional working capital borrowings. In 2012 our $150.0 million 12% senior
subordinated notes and our term debt under our credit facility will be due and payable. As a result we will need to obtain approximately $421.5 million in long-term financing at
that time. Prior to 2012, to the extent we accelerate our growth plans, consummate acquisitions or have lower than anticipated sales or increases in expenses, we may also need to raise additional
capital. In particular, we will require additional working capital whenever we consummate acquisitions or experience strong incremental demand.

In
July 2005, we amended our credit facility in connection with our acquisition of Aluma. Following such amendment, our amended credit facility provided for $287.0 million
of term loans, a $50.0 million revolving loan facility, a $20.0 million letter of credit facility and a synthetic letter of credit facility of up to $15.0 million. Up to
$20.0 million of the $50.0 million revolving loan facility may be used for additional letters of credit. As of December 31, 2005, we had no borrowings outstanding under the
revolving portion of our amended credit facility and had total outstanding letters of credit of $34.3 million. As of September 30, 2006, we had borrowings of $32.5 million
outstanding under the revolving portion of our amended credit facility and had total outstanding letters of credit of $34.4 million. In the period from July 2006 through
September 30, 2006, we repaid the $20.1 million in borrowings under the revolving portion of our amended credit facility outstanding at June 30, 2006 with cash flow from
operations. During this period, we also borrowed $32.5 million under the revolving portion of our amended credit facility to finance the acquisition of Interstate Scaffolding, Inc. as
more fully described in footnote 5 of our unaudited consolidated condensed financial statements.

On
August 3, 2006 we further amended our amended credit facility to provide for, among other things, (i) an increase in the revolving loan facility to
$100.0 million, (ii) the establishment of an uncommitted incremental term facility pursuant to which we will be entitled to incur additional dollar-denominated term loans in an aggregate
principal amount of up to $25.0 million and (iii) an amendment to the restrictions on acquisitions contained therein that would permit us to make acquisitions in an aggregate amount of
up to $70.0 million during the 2006 fiscal year.

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Our
amended credit facility contains financial and operating covenants, which require, among other things, that we maintain certain financial ratios, and imposes limitations on our
ability to make capital expenditures, to incur indebtedness, and to pay dividends. The most significant of these covenants are as follows:

Minimum
Interest Coverage Ratio. Our ratio of EBITDA (as defined in our credit facility) to consolidated cash interest expense for any four-fiscal quarter period
ending during any of the periods set forth below cannot be less than the ratio indicated:

|Period                                    |  | Minimum Interest Coverage Ratio
|----------------------------------------- |  | -------------------------------
|Through September 30, 2006                |  | 1.75:1.00                      
|October 1, 2006 through December 31, 2008 |  | 2.00:1.00                      
|January 1, 2009 and thereafter            |  | 2.25:1.00                      

Maximum
Leverage Ratio. Our ratio of period end consolidated total debt (net of cash and cash equivalents) to EBITDA (as defined in our credit facility) for any
four-fiscal quarter period ending during any of the periods set forth below cannot exceed the ratio indicated:

|Period                                    |  | Maximum
Leverage Ratio
|----------------------------------------- |  | ----------------------
|Through September 30, 2006                |  | 6.00:1.00             
|October 1, 2006 through December 31, 2006 |  | 5.75:1.00             
|January 1, 2007 through December 31, 2007 |  | 4.75:1.00             
|January 1, 2008 through December 31, 2008 |  | 4.00:1.00             
|January 1, 2009 and thereafter            |  | 3.00:1.00             

As
of December 31, 2005 and September 30, 2006, we were in compliance with the financial covenants contained in our credit facility. As of September 30, 2006, our
interest coverage ratio was 2.72:1.00 compared to the minimum requirement of 1.75:1.00. As of September 30, 2006, our leverage ratio was 4.01:1.00 compared to the maximum
allowable level of 6.00:1.00.

If
we consummate our proposed initial public offering of our common stock (the "proposed IPO") on or prior to December 31, 2006, the credit agreement will be amended to provide
for, among other things, (i) an increase in the uncommitted incremental term facility pursuant to which we will be entitled to incur additional dollar-denominated term loans in an aggregate
principal amount of up to $100.0 million and (ii) certain amendments to the financial covenants contained in our amended credit facility. If the proposed IPO is consummated, we
anticipate that the proceeds thereof will be used in part to

The
interest rate on the term loans under our credit facility is variable. For the nine months ended September 30, 2005 and 2006, the weighted average interest rate on the term
loans was 6.3% and 7.6%, respectively. For the nine months ended September 30, 2006, the weighted average interest rate for borrowings under the revolving portion of our credit facility
was 9.1%.

Our
estimated interest payment obligation under our credit facility for 2006 is $22.5 million, including commitment and letter of credit fees. We are required to make
semi-annual interest payments on our 12% senior subordinated notes in the amount of $9.0 million in April and October of every year until our 13% senior subordinated
pay-in-kind notes due 2013 mature in October 2012. We are not required to begin making interest payments on the 13% senior subordinated
pay-in-kind notes due 2013 until 2008, as these notes are pay-in-kind. If the proposed IPO is consummated, we anticipate that the proceeds thereof will
be used in part to repurchase all of our outstanding 13% senior subordinated pay-in-kind notes due 2013 and 12% senior subordinated notes.

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Cash Flows From Operating Activities

Cash flows from operating activities were $28.1 million for the nine months ended September 30, 2005 compared to $50.7 million for the nine
months ended September 30, 2006. The primary reasons for the increase is that we reported a net loss of $1.1 million for the nine months ended September 30, 2005 versus net income
of $3.8 million for the nine months ended September 30, 2006. In addition, the percentage of total accounts receivable over 90 days past due decreased from 17.2% at
December 31, 2005 to 13.0% at September 30, 2006.

Cash Flows Used in Investing Activities

During 2005 we acquired substantially all of the operations and operating assets of Aluma. The aggregate purchase price for Aluma was $241.4 million,
consisting of the purchase price and acquisition related costs of $217.6 million and assumed liabilities of $23.8 million. During 2006, we purchased substantially all of the assets and
operations of Interstate. The aggregate purchase price for Interstate was $34.7 million, consisting of purchase price and acquisition related costs of $31.7 million and assumed
liabilities of $3.0 million. In addition, we purchased certain of the assets and customers of a Canadian concrete forming and shoring business for $3.1 million.

One
of our major uses of cash is capital expenditures, primarily comprised of equipment expenditures. Our maintenance capital expenditures generally relate to acquiring scaffolding
planks, trucks and other equipment. Expansion capital expenditures are discretionary and generally relate to acquiring new work access solutions and vehicles. These expenditures vary annually based on
our level of work access solutions and forming and shoring rental activity and growth opportunities.

Capital
expenditures for the nine months ended September 30, 2006 were $54.5 million compared to $22.8 million for the same period in 2005. Capital expenditures for
the nine months ended September 30, 2006 were significantly higher than for the same period in 2005 due to (i) additional capital expenditure requirements of the Aluma operations we
acquired and (ii) increased expansion capital expenditures required to meet anticipated increased demand for our services.

Cash Flows From Financing Activities

In general, our credit facility called for nominal annual debt repayments. In July 2005, to finance the purchase of Aluma, we amended our credit facility
and borrowed an additional $185.2 million under this facility. In addition, we issued $30.0 million in redeemable preferred stock to obtain additional funds to accomplish the purchase of
Aluma. In connection with these transactions we incurred $5.6 million in related financing fees. As a result, our minimum required repayment of long-term debt increased
between years.

During
the first six months of 2006, we borrowed $20.1 million under the revolving loan facility of our credit facility to finance the growth in working capital requirements
resulting from the growth in our business. We repaid these borrowings during the third quarter of 2006. On August 3, 2006, we borrowed $32.5 million under the revolving loan facility of our
credit facility to finance the acquisition of Interstate.

In
connection with our planned initial public offering of our common stock, we renegotiated our credit agreement to allow us to borrow $100.0 million to retire our 12% senior
subordinated notes, 13% senior subordinated pay-in-kind notes, and redeemable preferred stock. The amended agreement does not take effect until we achieve an initial public
offering of our common stock. However, to secure this amendment, we paid deferred financing fees of $0.9 million in May 2006.

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Free Cash Flow

Free cash flow (cash flows from operations less net capital expenditures) was $9.0 million and $8.1 million for the nine months ended September 30, 2005,
and 2006, respectively. The decline in free cash flows from 2005 to 2006 is principally due to the fact that we increased our net capital expenditures to $28.7 million in 2006 from
$10.9 million in 2005 to meet anticipated increased demand for our services.

Free
cash flow consists of cash flows from operations less net capital expenditures. Free cash flow is not a measure of performance defined by, or calculated in accordance with, GAAP. We
believe that free cash flow is a useful measure of financial performance that shows a company's ability to fund its operations. Free cash flow is used by us to compare our performance to that of our
peers and is commonly used by analysts and investors in assessing performance. You should not consider free cash flow as an alternative to operating or net income, determined in accordance with GAAP,
as an indicator of our operating performance, or as an alternative to cash flows from operations, determined in accordance with GAAP, as an indicator of cash flows or as a measure of liquidity. Free
cash flow, as calculated by us, may not be comparable to similarly titled measures employed by other companies.

Off-Balance Sheet Arrangements

As security for our performance to insurers, we were contingently liable under letters of credit in the amount of $34.4 million at September 30,
2006. These letters of credit generally have no scheduled expiration date. We pay fees to various banks that range from 3.25% to 4.25% per annum of their face value. If we were required to replace
outstanding letters of credit as of September 30, 2006, management believes that the replacement cost would not vary significantly from the present fee structure.

Contractual Obligations

The following is a summary of payments due under our contractual cash obligations as of September 30, 2006:

|                                                                        |  | Payments due in
|----------------------------------------------------------------------- |  | ---------------
|
|
|Term loan principal                                                     |  | $              
|Expected interest payments on term loan(2)                              |  |                
|12% senior subordinated notes principal                                 |  |                
|Expected interest payments on 12% senior subordinated notes             |  |                
|13% senior subordinated pay-in-kind notes principal                     |  |                
|Expected interest payments on 13% senior subordinated pay-in-kind notes |  |                
|Redeemable preferred stock                                              |  |                
|Expected dividends on redeemable preferred stock                        |  |                
|Operating leases                                                        |  |                
|Notes payable and capital leases                                        |  |                
|                                                                        |  |                
|Total contractual cash obligations                                      |  | $              
|                                                                        |  |                

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Effect of Inflation; Seasonality

Inflation has not generally been a material factor affecting our financial condition, results of operations or cash flows. Our general operating expenses, such as
salaries, employee benefits and facilities costs are subject to normal inflationary pressures.

The
market for industrial work access solutions and formwork and shoring services experiences seasonal fluctuations in demand. In particular, because of high demand for gasoline for
automobiles during the summer, most refineries prefer to close down for turnarounds during the spring and fall. In
addition, cold temperatures in the first and fourth fiscal quarters typically limit activity on maintenance and capital projects in the Alberta Oil Sands. Our work for power utilities follows a
similar seasonal pattern. Conversely, non-residential building construction, particularly in the renovation business, occurs throughout the year, but is heaviest in the second and third
fiscal quarters.

New Accounting Standards

SFAS No. 123 (Revised 2004), "Share-Based Payment" ("SFAS No. 123R")

In December 2004, the Financial Accounting Standards Board ("FASB") issued SFAS No. 123R, which is a revision of SFAS No. 123,
"Accounting for Stock-Based Compensation." SFAS No. 123R supersedes APB Opinion No. 25, "Accounting for Stock Issued to Employees," and amends
SFAS No. 95, "Statement of Cash Flows." Generally, the approach in SFAS No. 123R is similar to the approach described in SFAS No. 123. However,
SFAS No. 123R requires all share-based payments to employees, including grants of employee stock options, to be recognized in the statement of operations based on their
fair values.

In
March 2005, the SEC issued Staff Accounting Bulletin No. 107 ("SAB No. 107") which summarizes the views of the SEC staff regarding the interaction between
SFAS No. 123R and certain SEC rules and regulations. SAB No. 107 provides guidance on several topics including: valuation methods, the classification of compensation
expense, capitalization of compensation costs related to share-based payment arrangements, the accounting for income tax effects of share-based payment arrangements, and disclosures in Management's
Discussion and Analysis subsequent to adoption of SFAS No. 123R.

In
April 2005, the SEC issued FR-74, "Amendment to Rule 4-01(a) of Regulation S-X Regarding the Compliance Date for Statement of
Financial Accounting Standards No. 123 (Revised 2004), Share-Based Payment" ("FR-74"). FR-74 allows companies to implement SFAS No. 123R at the
beginning of their next fiscal year (January 1, 2006 for us), instead of the next reporting period that begins after September 15, 2005. FR-74 does not change the
accounting required by SFAS No. 123R; it only changes the implementation date of the standard.

We
adopted SFAS No. 123R using the modified-prospective method on January 1, 2006 and as further discussed in note 14 to our consolidated financial
statements, it did not have a material impact on our financial condition, results of operations or cash flows.

SFAS No. 151, "Inventory Costs, an amendment of ARB No. 43, Chapter 4" ("SFAS No. 151")

In November 2004, the FASB issued SFAS No. 151, which amends Accounting Research Bulletin No. 43, Chapter 4, "Inventory
Pricing" ("ARB No. 43"). SFAS No. 151 clarifies that abnormal amounts of idle facility expense, freight, handling costs and wasted materials (spoilage) should be expensed
rather than capitalized as inventory. The provisions of SFAS No. 151 are applicable to inventory costs incurred during

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fiscal
years beginning after September 15, 2005 (as of January 1, 2006 for us) with earlier application permitted. We implemented SFAS No. 151 effective
January 1, 2006, and it did not have a material impact on our financial condition, results of operations or cash flows.

SFAS No. 154, "Accounting Changes and Error Corrections, a replacement of APB Opinion No. 20 and FASB Statement
No. 3" ("SFAS No. 154")

In May 2005, the FASB issued SFAS No. 154. SFAS changes the requirements for the accounting and reporting of a change in accounting principle
or correction of an error. It requires, unless impracticable, retrospective application of the required method for reporting a change in accounting principle in the absence of explicit transition
requirements specific to the newly adopted accounting principle. SFAS No. 154 is effective for accounting changes and correction of errors made in fiscal years beginning after
December 15, 2005. We implemented SFAS No. 154 effective January 1, 2006, and it did not have a material impact on our financial condition, results of operations or
cash flows.

FASB Interpretation No. 47, "Accounting for Conditional Asset Retirement Obligations, an interpretation of FASB Statement No. 143"
("FIN No. 47")

In March 2005, the FASB issued FIN No. 47 which clarifies that the term "conditional asset retirement obligation" as used in
SFAS No. 143, "Accounting for Asset Retirement Obligations" ("SFAS No. 143"), refers to a legal obligation to perform an asset retirement activity in which
the timing and/or method of settlement are conditional on a future event that may or may not be within the control of the entity. The obligation to perform the asset retirement activity is
unconditional even though uncertainty exists about the timing and/or method of settlement. Accordingly, an entity is required to recognize a liability for the fair value of a conditional asset
retirement obligation, if the fair value of the liability can be reasonably estimated. The fair value of a liability for the conditional asset retirement obligation should be recognized when incurred,
generally upon acquisition, construction, or development and/or through the normal operation of the asset. Uncertainty about the timing and/or method of settlement of a conditional asset retirement
obligation should be factored into the measurement of the liability when
sufficient information exists. FIN No. 47 also clarifies when an entity would have sufficient information to reasonably estimate the fair value of an asset retirement obligation. We
implemented FIN No. 47 as of December 31, 2005 and it did not have a material impact on our financial condition, results of operations, or cash flows.

SFAS No. 155, "Accounting for Certain Hybrid Financial InstrumentsAn Amendment of FASB Statements No. 133
and 140" ("SFAS No. 155")

In February 2006, the FASB issued SFAS No. 155, which amends SFAS No. 133, "Accounting for Derivative Instruments and
Hedging Activities" ("SFAS No. 133"), and SFAS No. 140, "Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities."
SFAS No. 155 addresses several issues relating to accounting for financial instruments, including permitting fair value measurement of any hybrid financial instrument that contains an
embedded derivative and eliminating the prohibition on a qualifying special-purpose entity from holding certain derivative instruments. SFAS No. 155 also provides clarification that
concentrations of credit risk in the form of subordination are not embedded derivatives. SFAS No. 155 is effective for all financial instruments issued or acquired after the fiscal year
that begins after September 15, 2006 (January 1, 2007 for us), with earlier application permitted. We have not yet determined the timing of adoption or the full impact of
SFAS No. 155. However, we do not expect that it will have a material impact on our financial condition, results of operations or cash flows.

FASB Interpretation No. 48, "Accounting for Uncertainty in Income Taxes" ("FASB Interpretation No. 48")

In September 2006, the FASB issued FASB Interpretation No. 48, "Accounting for Uncertainty in Income Taxes." The interpretation clarifies the
accounting for uncertainty in income taxes recognized in a company's financial statements in accordance with Statement of Financial Accounting Standards No. 109,

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"Accounting
for Income Taxes." Specifically, the pronouncement prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of a tax
position taken or expected to be taken in a tax return. The interpretation also provides guidance on the related derecognition, classification, interest and penalties, accounting for interim periods,
disclosure and transition of uncertain tax positions. The interpretation is effective for fiscal years beginning after December 15, 2006. We have not yet determined the full impact of FASB
Interpretation No. 48. However, we do not expect that it will have a material impact on our financial condition, results of operations or cash flows.

SFAS No. 157, "Fair Value Measurements" (SFAS 157)

In September 2006, the FASB issued SFAS 157. SFAS 157 does not address "what" to measure at fair value; instead, it addresses "how" to
measure fair value. SFAS 157 applies (with limited exceptions) to existing standards that require assets or liabilities to be measured at fair value. SFAS 157 establishes a fair value
hierarchy, giving the highest priority to quoted prices in active markets and the lowest priority to unobservable data and requires new disclosures for assets and liabilities measured at fair value
based on their level in the hierarchy. SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007. We are currently evaluating the impact of
adopting SFAS 157.

Securities and Exchange Commission Staff Accounting Bulletin No. 108 (SAB 108)

In September 2006, the Securities and Exchange Commission issued Staff Accounting Bulletin No. 108 ("SAB 108"), which becomes effective for
the Company for the year ended December 31, 2006. SAB 108 provides guidance on the consideration of the effects of prior period misstatements in quantifying current year misstatements
for the purpose of a materiality assessment. SAB 108 requires an entity to evaluate the impact of correcting all misstatements, including both the carryover and reversing effects of prior year
misstatements, on current year financial statements. If a misstatement is material to the current year financial statements, the prior year financial statements should also be corrected, even though
such revision was, and continues to be, immaterial to the prior year financial statements. Correcting prior year financial statements for immaterial errors would not require previously filed reports
to be amended. Such correction should be made in the current period filings.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market risk represents the risk of changes in value of a financial instrument, whether derivative or non-derivative, caused by fluctuations in
interest rates and foreign exchange rates. Changes in these factors could cause fluctuations in our results of operations and cash flows. In addition, in the ordinary course of business, we are
exposed to foreign currency and interest rate risks.

Interest Rate Risk

We are exposed to interest rate risk related to changes in interest rates on our variable rate debt. At September 30, 2006, we held approximately
$497.1 million of long-term debt, with approximately $289.5 million subject to variable interest rates. If interest rates increased by 100 basis
points, our annualized cash interest expense would increase by approximately $2.9 million, not taking into consideration the effect of the interest rate swaps discussed below.

In
order to mitigate the interest rate risk related to our variable rate debt, we have entered into two interest rate swap agreements with terms commencing December 31, 2005.
Under these agreements, we will pay fixed interest rates for three years and will receive floating interest rate payments. Our U.S. dollar interest rate swap is based on the
U.S. 90-day LIBOR and our Canadian dollar interest rate swap is based on 90-day Canadian bankers acceptances. During years one and two the notional value of the
U.S. Dollar swap is $50.0 million and reduces to $25.0 million in the final year of the agreement, while the notional

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value
of the Canadian dollar swap is $35.0 million in years one and two, reducing to $17.5 million in the final year of the agreement. Based upon current variable debt outstanding, if
interest rates increased by 100 basis points, annualized cash interest expense would increase by approximately $2.1 million after taking into consideration the effect of these interest
rate swaps.

Foreign Currency Exchange Rate Risk

Foreign currency exposures arise from transactions denominated in a currency other than our reporting currency, U.S. dollars, and from foreign financial
statement items translated into U.S. dollars. As a result of our purchase of substantially all of the operations and the operating assets of Aluma effective July 29, 2005, we are subject
to foreign currency risk associated with our investment in a Canadian company. In order to mitigate our exposure to changes in the value of the Canadian dollar relative to the U.S. dollar we
entered into an $80.0 million U.S. dollar/Canadian dollar currency swap agreement for a period of three years commencing on December 31, 2005. The notional amount of the swap is
$80.0 million during years one and two and reduces to $40.0 million during the final year of the agreement. A depreciation in the Canadian dollar against the U.S. dollar of 10%
would decrease our annual net income by approximately $1.3 million, excluding the impact of U.S. Canadian dollar hedges. We earn an immaterial portion of our revenues in currencies other
than U.S. or Canadian dollars, including Mexican pesos. We do not hedge against fluctuations in those other currencies.

ITEM 4. CONTROLS AND PROCEDURES

As discussed in Note 2 to our consolidated financial statements for the year ended December 31, 2005 contained in our
Form 10-K/A for the year ended December 31, 2005, we initiated a physical inventory of our scaffolding equipment in November 2005 and reconciled the results of
the physical inventory to the amounts recorded in our books and records. As a result, we identified $14.0 million of scaffolding equipment that could no longer be physically located. Management
believes
that these scaffolding assets were most likely lost, stolen, scrapped or installed at a client site, in each case without having been properly recorded in our books and records.

The
absence of the $14.0 million in scaffolding equipment has been attributed to deficiencies in internal controls over transfers of scaffolding equipment between our locations
and our failure to perform periodic comprehensive reconciliations of our perpetual scaffolding equipment records to our fixed asset system and other books and records.

These
internal control issues represented a material weakness in our system of internal controls which led to inaccurate recording of these types of scaffolding equipment transactions
over a period of several years.

As
a result of the deficiencies discussed above, management, under the direction of the Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our
disclosure controls and procedures (as defined in the Securities Exchange Act of 1934 Rules 13a- 15(e)) as of September 30, 2006. Based upon this evaluation, management, including
the Chief Executive Officer and Chief Financial Officer, has concluded that our disclosure controls and procedures were ineffective as of September 30, 2006, due to the material weakness
noted above.

We
have taken corrective actions to institute new policies and procedures for the tracking of scaffolding equipment disposals and transfers between our locations, including
the following:



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In
addition, we have adopted a new policy to conduct physical inventories of these assets at each location at least once a year.

Management
believes that implementation of these policies and procedures will remediate the material weakness described above.

PART IIOTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We
are a party to various legal proceedings and administrative actions, all of which are of an ordinary or of a routine nature incidental to our operations. In the opinion of our
management, such proceedings and actions should not, individually or in the aggregate, have a material adverse effect on our financial condition or results of operations.

In
February, May and June, 2006, U.S. Immigration and Customs Enforcement ("ICE") detained a total of 17 employees working in our Denver regional office after determining
that such employees were not authorized to work in the United States. We terminated the detained workers and, after an internal review by company personnel in our Denver regional office, we
terminated an additional 16 employees who were determined to have presented us with fraudulent identification documents. In addition, in connection with such actions, ICE requested that we
provide it with I-9 immigration forms and copies of identification documents related to the detained workers and other workers in our Denver regional office. Following these events,
we conducted a review of our policies and procedures regarding the hiring of new employees and engaged external legal counsel to conduct an investigation of hiring procedures and documentation in
certain important branches in each region of the country where we operate. That review led to the termination of an additional two employees in our Denver and Dallas divisions. Based on the review of
our policies and procedures, we believe that our policies, procedures and practices relating to the hiring of workers are designed to and are substantially effective in complying with the company's
legal obligation to not knowingly hire undocumented workers.

Nevertheless,
following the completion of the investigation, we decided to institute a new training program designed to improve the detection of false employee identification documents.
Going forward, identification documents presented to our company will be required to be examined by at least two employees who have been specially trained in the detection of false identification
documents.

We
are subject to various environmental, health and safety laws and regulations governing, among other things, the storage, handling and use of hazardous materials, such as petroleum or
asbestos; the emission and discharge of hazardous materials into the ground, air or water; and the health and safety of our employees. Compliance with environmental regulations has not had, and,
assuming our future operations remain comparable to our current operations, we do not anticipate that such compliance in the future reasonably could have, any material effect on our capital
expenditures, earnings or competitive position. We have not made in the past three years, and we do not anticipate making for the remainder of our current fiscal year, any material capital
expenditures for environmental control facilities. We cannot assure you, however, that we, or the companies we acquired, including Aluma and Interstate, have been or will be at all times in complete
compliance with applicable environmental, health and safety laws and regulations. Additionally, in connection with our acquisition activities, we may acquire properties that have environmental issues.
While we intend to conduct customary environmental reviews on properties that we may acquire, there can be no assurance that such assessments will identify properties which do not comply with
environmental regulations. If we or those companies or properties violate or fail to comply with these laws and regulations, we could be fined or otherwise sanctioned by regulators. We could also be
held liable for any and all consequences arising out of human exposure to such hazardous materials or other environmental damage. Certain environmental laws assess liability on current or previous
owners or operators of real property for the cost of removal or remediation of hazardous material contamination. We cannot assure you that our costs of complying with current and future environmental
and health and safety

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laws,
and our liabilities arising from past or future releases of, or exposure to, hazardous materials will not adversely affect our business, results of operations or financial condition.

ITEM 1A. RISK FACTORS

There
have been no material changes in the risk factors previously disclosed in our Annual Report on Form 10-K/A for the fiscal year ended
December 31, 2005.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

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SIGNATURES

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

|                        |  | BRAND ENERGY & INFRASTRUCTURE SERVICES, INC.
|----------------------- |  | --------------------------------------------
|Date: November 13, 2006 |  | By:                                         
|Date: November 13, 2006 |  | By:                                         

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