<PAGE>   1
                                                                   UNITED STATES
                                              SECURITIES AND EXCHANGE COMMISSION
                                                          Washington, D.C. 20549


                                    FORM 10-K
                            ANNUAL REPORT PURSUANT TO
                           SECTION 13 OR 15(D) OF THE
                               SECURITIES EXCHANGE
                                   ACT OF 1934
                            FOR THE FISCAL YEAR ENDED
                                December 31, 1999

                          BRAND SCAFFOLD SERVICES, INC.
             (Exact Name of Registrant as Specified in Its Charter)



<TABLE>
<S>                                               <C>                                        <C>
Delaware                                          735915                                     133909681
(State or Other Jurisdiction of                   (Commission File Number)                   (IRS Employer
Incorporation or Organization)                                                               Identification Number)
</TABLE>


                       15450 SOUTH OUTER HIGHWAY 40, #270
                          CHESTERFIELD, MISSOURI 63017
                                 (636) 519-1000
  (Address, including zip code, and Telephone Number, including area code, of
                   Registrant's principal executive offices)

        Securities registered pursuant to Section 12(b) of the Act: NONE

        Securities registered pursuant to Section 12(g) of the Act: NONE

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports) and (2) has been subject to the filing
requirements for at least the past 90 days.

                                    Yes  X             No
                                       ------              ------

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. (X)

State the aggregate market value of the voting stock held by nonaffiliates of
the registrant.

No market exists for the Common Stock of Brand Scaffold Services, Inc. All of
the outstanding shares of Common Stock are held by DLJ Brand Holdings, Inc.

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

<TABLE>
<CAPTION>
                                                     OUTSTANDING AT
                CLASS                               MARCH 15 , 2000
                -----                               ---------------

    <S>                                             <C>
    BRAND SCAFFOLD SERVICES, INC.
    COMMON STOCK, $0.01 PAR VALUE                     100 SHARES

</TABLE>


<PAGE>   2


ITEM 1.  BUSINESS

General

Company History and Structure

Brand Scaffold Services, Inc. and its subsidiaries ("Brand") are 100% owned by
DLJ Brand Holdings, Inc. ("Holdings"). As of December 31, 1999, Holdings is
owned 64.4% by Donaldson, Lufkin & Jenrette, Inc. ("DLJ"), 9.2% by Carlisle
Enterprises, L.P. ("Carlisle"), 18.3% by Rust International Inc. ("Rust
International") through its wholly owned subsidiary Rust Industrial Services,
Inc. ("RIS") and 8.1% by the directors, officers and employees of the Company.
Rust International is a subsidiary of Waste Management Industrial Services, Inc.
("WMIS"). All references to "the Company," "we," "us" or "our" mean Brand
Scaffold Services, Inc. and its subsidiaries.

On September 30, 1996, Brand, a newly formed entity created by the merchant
banking group of DLJ, purchased the assets of Rust Scaffold Services, Inc. and
its subsidiaries, which were direct and indirect subsidiaries of Rust
International ("the Acquisition"). The Acquisition was financed by $190.0
million in debt and accounted for under the purchase method of accounting.

Financial Information About Industry Segments

We operate in one segment and provide scaffolding services primarily to
refining, chemical, petrochemical, pulp and paper and utility industries, and to
a lesser extent general commercial clients. Our revenues, operating income and
total assets as of and for the years ended December 31, 1999, 1998 and 1997, are
as follows (in thousands):

<TABLE>
<CAPTION>

                                                 1999        1998        1997
                                              ----------  ----------  ----------
<S>                                            <C>         <C>         <C>
Revenue                                         $218,916    $205,304    $160,660
Operating income                                  15,736      18,063       9,684
Total assets                                     210,872     211,060     197,543
</TABLE>

Description of Business

We are the largest North American provider of industrial scaffolding services.
Our services facilitate access to tall structures for on-going maintenance,
turnarounds (major maintenance projects which require the complete or partial
shutdown of a facility) and capital projects, principally in the refining,
petrochemical, chemical, utility and pulp and paper industries. Our turnkey
services include equipment rental, labor for the erection and dismantlement of
scaffolding and scaffolding design services. We deliver our services through an
extensive field service organization of approximately 4,200 employees in 30
field offices located throughout the United States and two in Canada. We also
provide scaffolding services to the commercial market (primarily nonresidential
construction) and sell a small amount of scaffolding.

Approximately 79%, 83%, and 80% of our 1999, 1998, and 1997, respective revenues
were attributable to ongoing maintenance, turnarounds and capital projects of
industrial facilities. We typically provide on-going maintenance services under
long-term contracts; the duration of these contracts ranges between one and five
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 such facilities. We believe that the necessity for on-going
maintenance and turnarounds provides us with a stable, recurring revenue base.

Our main customers include major integrated oil companies, independent refiners,
large chemical companies, utilities and large engineering and construction
firms. The largest customer, Exxon Corporation, accounted for approximately 13%,
15% and 17% of our revenues in the years ended December 31, 1999, 1998 and 1997,
respectively. The loss of this customer could have a material adverse effect on
us. It is unclear what effect the recently announced mergers and consolidations
in the oil industry (such as the merger between Exxon Corporation and Mobil
Corporation and between British Petroleum P.L.C. and Amoco Corporation) and the
paper industry will have on us.





                                       2
<PAGE>   3

We believe our position as the largest supplier of industrial scaffolding
services provides us with a number of competitive advantages including:

     o    the ability to offer national coverage to large customers;


     o    the ability to provide required personnel and scaffolding to process
          major turnarounds and unanticipated plant outages;

     o    higher asset use through the shifting of assets across regions and
          across our large customer base;

     o    purchasing leverage with scaffolding manufacturers; and

     o    comprehensive safety training programs which have resulted in an
          accident incident rate which is well below the industry average and
          have enabled us to reduce insurance costs and accident-related
          expenses.

Our size also enables us to maintain our own trucking fleet and to provide a
design department that specializes in the custom design of industrial
scaffolding, which we use to minimize the amount of scaffolding used and to
maximize labor efficiency, thereby providing us with a competitive advantage.

Effects of Seasonality and Cyclicality

The market for industrial scaffolding 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. Similar patterns are evidenced for utilities.

We may be able to take advantage of differing seasonal patterns in other markets
we service, such as the commercial scaffolding market, but seasonality may still
lead to:

     o    low inventory use during periods of low demand;

     o    an inability to service all of our customers during periods of high
          demand;

     o    price fluctuations; and

     o    periods of low cash flow.

Historically, the market for industrial scaffolding services has experienced a
degree of cyclicality. In particular, demand for nonresidential construction and
capital projects is highly cyclical. In addition, when refining products are in
high demand or the price of pulp is high, refineries and pulp and paper mills
often delay turnarounds. It does not appear that any areas of our business
exhibit a significant degree of counter-cyclicality that would offset these
effects. This cyclicality could have a material adverse effect on us.

The Industry and Competition

The Company is the largest North American provider of industrial scaffolding
services. We currently face competition from other existing scaffolding service
providers, including entities providing substantially similar services, some of
which have significantly greater resources than us. We also compete with larger
engineering and construction firms. While we believe that we currently have a
strong position in the industrial scaffolding market, we cannot assure that we
will be able to increase or maintain our market share.

The scaffolding services industry consists of the industrial market and the
commercial market, each of which requires different types of scaffolding
equipment and levels of expertise. Industrial applications generally require
systems scaffolding, which is highly versatile, can be quickly erected and
dismantled, is capable of conforming to irregularly shaped structures and
requires a higher level of skill to erect and dismantle. Commercial applications
generally require frame and brace scaffolding which is not as versatile as
systems scaffolding and requires a lower level of expertise.

Industrial Market

The North American industrial scaffolding market is approximately $650 million
and is serviced predominantly by scaffolding specialists such as Brand. We
estimate that the top six scaffolding specialists service almost 70% of the
total industrial market.

Industrial customers use scaffolding for on-going maintenance, turnarounds and
capital projects. Among industrial applications, maintenance represents
approximately 50% and turnarounds represent approximately 35% of the market.
Since




                                       3
<PAGE>   4

turnarounds may require the complete shutdown of a facility (which may lose up
to $1 million of revenues per day during a turnaround), speed and reliability
are key customer considerations. Safety is another important consideration for
industrial customers as scaffolding contractor accident incidents are counted
against a facility's safety record and may cause increases in both insurance
premiums and attention by the Occupational Safety and Health Administration
("OSHA").

Commercial Market

The North American commercial scaffolding is used primarily in nonresidential
construction and renovation projects. Commercial applications are generally
characterized by regularly shaped structures with few contoured or angled
surfaces. Due to the simple shapes required, commercial jobs generally utilize
frame and brace scaffolding, a less versatile type of equipment which is not
suited to industrial applications. Commercial scaffolding requires a less
skilled work force and has historically been less focused on safety issues.
These factors combine to make the commercial market highly fragmented with low
barriers to entry. We have longstanding customer relationships, extensive
equipment resources, significant labor capacity and an industry-leading safety
record. We believe these strengths have enabled us to gain current market share.
Competition is based primarily on the basis of quality, price, speed,
reliability, reputation and customer service. The Company plans to focus on
reducing operating costs, pursue complementary acquisitions and expand our
commercial scaffolding operations.

Employees and Dependence on Labor

As of December 31, 1999, we employed approximately 4,200 full-time employees, of
which 24% were represented by a labor union. We cannot assure that strikes or
other types of conflicts with unions or personnel will not arise or that we will
not become a target for further union organizing activity. Since our business
has a high labor content, any such activity could have a material adverse effect
on the Company. We believe that we have a good relationship with our employees.

Our business has a high labor content and, as a result, our financial
performance is affected by the availability of qualified personnel and the cost
of labor. In recent years, unemployment rates have reached unusually low levels
leading to lower availability of labor and to wage inflation. In particular, the
supply of labor has been low relative to demand in the Gulf Coast Region, in
which we have significant operations. While we have been successful in hiring
workers for our projects and we do not believe that the reduced availability of
labor has had a material adverse effect on our financial performance, we cannot
assure that sufficient labor will be available in the future or that the cost of
labor will not rise, either of which could have an adverse effect on the
Company.

ITEM 2.  PROPERTIES

We operate facilities in 33 locations (32 field offices and 1 headquarters
location). We maintain a substantial inventory of scaffolding at the 32 field
offices as well as at customer sites throughout the United States and Canada.
Our facilities are concentrated near its customers to minimize transportation
costs, to shorten lead times and to strengthen oversight and project management
abilities. Brand owns two locations in Canada, two in Texas, one in Alabama and
one in Louisiana. We lease the remaining 26 facilities as well as one site used
for our corporate headquarters located in Chesterfield, Missouri. Our facilities
typically include a small office, warehouse and yard and range in size from
2,000 to 40,000 square feet under roof with yards from half an acre to more than
four acres. Our headquarters are located in a 9,500 square foot facility in
Chesterfield, Missouri.

ITEM 3.  LEGAL PROCEEDINGS

We are a party to various legal proceedings and administrative actions, all of
which are of an ordinary or routine nature incidental to the operations of the
Company. In the opinion of the Company's 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.

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

No matters were submitted to a vote of security holders in the fourth quarter of
1999.





                                       4
<PAGE>   5


ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

All of our outstanding common stock is held by Holdings and, accordingly, there
is no established public trading market for our common stock. We have paid no
dividends since inception and our ability to pay dividends is limited by the
terms of certain agreements related to its indebtedness.

ITEM 6.  SELECTED FINANCIAL DATA

The following table presents (i) selected historical financial data of Rust
Scaffold Services, Inc. and subsidiaries ("Rust") as of and for the year ended
December 31, 1995, and for the nine months ended September 30, 1996, and (ii)
selected historical financial data of Brand, for the three months ended December
31, 1996, and the years ended December 31, 1997, 1998, and 1999. The selected
historical financial data as of and for the year ended December 31, 1995, and
for the nine months ended September 30, 1996, has been derived from the audited
financial statements of Rust. The selected historical financial data as of and
for the three months ended December 31, 1996, and the years ended December 31,
1997, 1998 and 1999, has been derived from the audited financial statements of
Brand. The financial data set forth below should be read in conjunction with
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and our financial statements and notes thereto included elsewhere
herein.




                                       5
<PAGE>   6
<TABLE>
<CAPTION>
                                        Rust                                            Brand
                             ------------------------------    -------------------------------------------------------------
                                               Nine Months     Three Months
                              Year Ended         Ended           Ended           Year Ended      Year Ended       Year Ended
                              December 31,    September 30,    December 31,     December 31,    December 31,    December 31,
                                 1995              1996            1996             1997            1998            1999
                             -------------    -------------    ------------     ------------    ------------    ------------
                                                                 (Dollars in Thousands)
<S>                             <C>             <C>             <C>             <C>             <C>              <C>
INCOME STATEMENT DATA (1)

Revenue                         $ 193,829     $   124,769       $ 44,412        $ 160,660       $ 205,304        $218,916
Operating expenses                138,968          89,073         34,170          122,638         157,673         171,630
                                ---------     -----------     ----------      -----------       ---------        --------
      Gross profit                 54,861          35,696         10,242           38,022          47,631          47,286


Selling and administrative
   expenses                        25,807          15,825          4,743           25,840          29,568          31,550
Nonrecurring start-up
   expenses                             -               -              -            2,498               -               -
                                ---------     -----------     ----------      -----------       ---------        --------

Operating income                   29,054          19,871          5,499            9,684          18,063          15,736

Interest expense                    9,444           7,872          4,504           15,422          17,728          17,758
Interest income                    (1,012)           (482)          (195)            (397)           (249)           (159)
Other expense, net (2)                853             708              -                -               -               -
                                ---------     -----------     ----------      -----------       ---------        --------
Pretax income (loss)               19,769          11,773          1,190           (5,341)            584          (1,863)


Provision for income tax            8,300           4,813            525                -               -               -
Extraordinary loss                      -               -              -                -           4,329               -
                                ---------     -----------     ----------      -----------       ---------        --------

      Net income (loss)         $  11,469     $     6,960     $      665       $   (5,341)      $  (3,745)       $ (1,863)
                                =========     ===========     ==========      ===========       =========        ========

EBITDA (3)                      $  36,803      $   25,832      $   8,398       $   22,009       $  34,572         $39,505

Cash flow from operations          35,587          28,478          4,966           11,983          26,753          21,148
Depreciation and
   amortization                     8,602           6,669          3,567           13,294          17,234          24,491
Cash interest expense (4)           9,444           7,872          3,836           14,453          17,003          17,036
Capital expenditures                8,602           1,810            208            9,720          14,831          19,642

Ratio of earnings to fixed
   charges and preferred
   stock dividends (5)           3.0x            2.4x            1.2x             .5x               .8x            .7x

</TABLE>

                                       6
<PAGE>   7

<TABLE>
<CAPTION>


                                                                 Rust                            Brand
                                                             ------------  ------------------------------------------------
                                                                                     December 31
                                                             --------------------------------------------------------------
                                                                1995         1996         1997         1998         1999
                                                             ----------   ----------  -----------   ---------   -----------
                                                                                (Dollars in Thousands)
<S>                                                          <C>          <C>         <C>           <C>          <C>
BALANCE SHEET DATA: (1)

Working capital                                              $  30,227    $  12,656   $    4,207    $  12,080    $   5,553
Total assets                                                   178,201      204,266      197,543      211,060      210,872
Long-term debt (including current portion and revolving
   loan)                                                             -      158,000      154,250      158,500      157,460
Notes payable and capital lease obligation (including
   current portion)                                                  -            -            -        5,007        4,402
14.5% senior exchangeable preferred stock                            -       25,906       31,140       35,907       41,404
Stockholder's equity (deficit)                                 141,374        4,247       (5,176)     (14,483)     (20,968)

</TABLE>
(1)  The Acquisition had a significant impact on our financial position and
     results of operations. Consequently, the financial data for and as of dates
     prior to the Acquisition may not be directly comparable to corresponding
     information for and as of dates after the Acquisition.

(2)  Since the Acquisition, we have not separately classified other income and
     expense and have included it in selling and administrative expenses because
     such amounts have been immaterial.

(3)  EBITDA is defined as earnings before interest income, cash interest
     expense, income taxes, depreciation and amortization. EBITDA is commonly
     used to analyze companies on the basis of operating performance, leverage
     and liquidity. EBITDA is not intended to represent cash flows for the
     period, nor has it been presented as an alternative to operating income as
     an indicator of operating performance and should not be considered in
     isolation or as a substitute for measures of performance prepared in
     accordance with generally accepted accounting principles.

(4)  Cash interest expense represents total interest expense less amortization
     of deferred financing fees of $722, $725, and $969, for the years ended
     December 31, 1999, 1998 and 1997, respectively.

(5)  For the purposes of calculating the ratio of earnings to combined fixed
     charges and preferred stock dividends, earnings represent income (loss)
     before income taxes plus fixed charges. Fixed charges consist of interest
     expense on all indebtedness plus the interest portion of rental expense on
     noncancelable leases, amortization of debt issuance costs, and accretion of
     preferred stock dividends.

ITEM. 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

The following discussion and analysis should be read in conjunction with the
financial statements and notes thereto included herewith. Financial data and
discussions relating to the year ended December 31, 1996, reflect the combined
results of operations of Rust, prior to the Acquisition and Brand after the
Acquisition.

Overview

The Company is the largest North American provider of industrial scaffolding
services which facilitate access to tall structures for maintenance, turnarounds
and capital projects, principally in the refining, petrochemical, chemical,
utility and pulp and paper industries. The Company provides turnkey services
which include equipment rental, labor for the erection and dismantlement of the
scaffolding and scaffolding design services. The Company also provides
scaffolding services to the commercial market (primarily nonresidential
construction) and sells a small amount of scaffolding.

In April 1999, the Company acquired the operating assets of Philip Scaffold
Corporations ("Philip") for a purchase price of $875. Philip operates out of
Denver and Grand Junction, Colorado and is an industrial scaffold operation with
its major customers being power companies and refineries. In August 1999, the
Company acquired the stock of Scaffold-Jax, Inc. for a purchase price of $1.2
million ($1.0 million in cash and $200 in a note to be paid two years after
closing). There was no excess cost of assets acquired over the amounts assigned
to net tangible assets at the date of acquisition. Scaffold-Jax, Inc. is a
Jacksonville, Florida based company and services both the industrial and
commercial market.

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<PAGE>   8


Approximately 79%, 83% and 80% of the Company's 1999, 1998 and 1997, respective
revenues were attributable to on-going maintenance, turnarounds and capital
projects of industrial facilities. The Company typically provides on-going
maintenance services under long-term contracts; the duration of these contracts
is usually one to five 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 such facilities. While the postponement of
scheduled turnarounds causes fluctuations in the Company's quarterly and annual
results, the Company believes the necessity for on-going maintenance and
turnarounds provides a stable, recurring revenue base.

Revenues from capital projects, which represented approximately 11%, 18% and 14%
of 1999, 1998 and 1997 revenues, respectively, result from new plant
construction, plant expansions and modifications. Capital projects can and have
had material impacts on the Company's results of operations.

Commercial scaffolding revenues, which represented approximately 21%, 14% and
15% of 1999, 1998 and 1997 revenues, are related to the level of nonresidential
construction and renovation. Demand for commercial scaffolding services has
recently been high due to the recent strength in the commercial construction
industry. In 1997, the Company increased its penetration of the commercial
market, by opening four new offices.

In November 1997, the Company implemented a cost reduction program which reduced
its annual operating overhead and selling, general and administrative expenses
by approximately $5.3 million. The major initiatives included (i) eliminating 63
administrative and support positions and consolidating certain administrative
functions, (ii) restructuring and renegotiating benefits programs, (iii)
renegotiating the Company's insurance premiums to reflect continued improvements
in its safety record, (iv) negotiating company-wide procurement contracts in
order to take advantage of volume pricing and (v) implementing a new management
information system to improve inventory utilization and reduce equipment
transportation expenses. The Company recorded a one-time expense in the fourth
quarter of 1997 of $437 to reflect severance and other expenses of the cost
reduction program.

In connection with the Acquisition, WMIS agreed to pay the Company a quarterly
fee of $725 for transition services for three years beginning on December 31,
1996. Such payments continued through September 30, 1999. In addition, WMIS
agreed to pay for all historical accident-related claims in which the accident
occurred prior to the Acquisition. Because cash expenditures related to
accidents are paid out over time but accident-related expenses are accrued in
the period in which the accident occurs, the Company has a significant non-cash
claims expense ($2.6 million in 1999, $2.6 million in 1998 and $2.9 million in
1997) which it anticipates will decline over time.

The Company's business is seasonal. End-use industries such as the refining and
utility industries experience increased demand for their products during the
summer months. Consequently, turnarounds are generally scheduled during the
first and fourth quarters of the year.

The following discussion of results of operations is presented for the years
ended December 31, 1999, 1998 and 1997.




                                       8
<PAGE>   9

Results of Operations

                     Summary of Historical Financial Results
                                 (In thousands)
<TABLE>
<CAPTION>

                                                                Year Ended     Year Ended       Year Ended
                                                               December 31,   December 31,     December 31,
                                                                   1999           1998             1997
                                                               ------------   ------------     ------------
<S>                                                            <C>            <C>              <C>
     Income Statement Data:
     Revenue                                                      $218,916       $ 205,304        $ 160,660
     Operating expenses                                            171,630         157,673          122,638
                                                                  --------       ---------        ---------
              Gross profit                                          47,286          47,631           38,022

     Selling and administrative expenses                            31,550          29,568           25,840
     Nonrecurring start-up expenses                                      -               -            2,498
                                                                  --------       ---------        ---------
              Operating income                                      15,736          18,063            9,684

     Interest expense                                               17,758          17,728           15,422
     Interest income                                                  (159)           (249)            (397)
                                                                  --------       ---------        ---------
              Pretax income (loss)                                  (1,863)            584           (5,341)

     Provision for income tax                                            -               -                -
     Extraordinary loss on debt extinguishment                           -           4,329                -
                                                                  --------       ---------        ---------
              Net loss                                            $ (1,863)      $  (3,745)       $  (5,341)
                                                                  ========       =========        =========
     Other Data:
     EBITDA                                                       $ 39,505       $  34,572        $  22,009
                                                                  ========       =========        =========

</TABLE>


Year Ended December 31, 1999, as Compared to Year Ended December 31, 1998

Revenue

Revenue for the year ended December 31, 1999, increased 6.6% to $218.9 million
from $205.3 million for the same period in 1998. Labor revenue increased 6.1% to
$158.5 million for the year ended December 31, 1999, as compared to the same
period in 1998. Rental revenue increased 9.0% to $54.7 million for the year
ended December 31, 1999, as compared to the same period in 1998. The increase in
revenues was primarily attributable to a full year of contributions from 1998
acquisitions, 1999 acquisition contributions, and to increased activity in our
commercial scaffolding divisions. The increase in rental revenue is also
attributable to a stronger move into the commercial market.

Gross Profit

Gross profit for the year ended December 31, 1999, decreased 0.7% to $47.3
million from $47.6 million for the same period in 1998. Labor gross profit
(labor revenue less labor cost) increased 14.3% to $28.3 million for the year
ended December 31, 1999, as compared to the same period in 1998. Gross profit as
a percentage of revenue for the year ended December 31, 1999, decreased to 21.6%
from 23.2% for the same period in 1998. This decrease was primarily due to a
$6.8 million increase in depreciation expense for scaffolding equipment from
1998 to 1999. Depreciable lives of steel scaffold were changed from 25 years to
20 years in January 1998 and wood plank was changed from 7 years to 2 years in
July 1998. Increased capital purchases over the past two years also contributed
to the increase in depreciation expense.





                                       9
<PAGE>   10


Selling and Administrative Expenses

Selling and administrative expenses for the year ended December 31, 1999,
increased 6.7% to $31.6 million from $29.6 million for the same period in 1998.
Selling and administrative expenses as a percentage of revenue for the year
ended December 31, 1999, remained constant at 14.4% for the same period in 1998.
The increase in SG&A expenses resulted from the additional expenses assumed with
the acquired companies. Also, we added 8 new salespeople during 1999, increasing
our SG&A expenses.

Operating Income

Operating income for the period ended December 31, 1999, decreased to $15.7
million from $18.1 million for the same period in 1998. The decrease in
operating income is directly related to the increase in depreciation expense and
overhead expenses from 1998 to 1999.

Interest Expense

Interest expense for the year ended December 31, 1999, increased 0.2% to $17.8
million from $17.7 million for the same period in 1998. The increase was mainly
due to a higher weighted average interest rate on all outstanding debt. For 1999
and 1998, the weighted average interest rate was 9.9% and 9.8%, respectively.

Extraordinary Item

There are no extraordinary items to report for the year ended December 31, 1999.

Net Loss

Net loss (before accretion of preferred stock dividends) improved to $1.9
million loss from $3.7 million loss for the same period in 1998.


Year Ended December 31, 1998, as Compared to Year Ended December 31, 1997

Revenue

Revenue for the year ended December 31, 1998, increased 27.8% to $205.3 million
from $160.7 million for the same period in 1997. Labor revenue increased 33.2%
to $149.4 million for the year ended December 31, 1998, as compared to the same
period in 1997. Rental revenue increased 22.7% to $50.0 million for the year
ended December 31, 1998, as compared to the same period in 1997. The increase in
revenues was primarily attributable to increased activity in the industrial
scaffolding market, and to a lesser extent, attributable to the acquisitions
made in 1998. Increased turnaround and capital maintenance activity and
unplanned utility outages in the U.S. Gulf Coast as well as utility plant
renovation, maintenance work and an increase in refinery turnarounds in the
northern part of the country, resulted in a positive variance for the year.

Gross Profit

Gross profit for the year ended December 31, 1998, increased 25.3% to $47.6
million from $38.0 million for the same period in 1997. Labor gross profit
(labor revenue less labor cost) increased 40.2% to $24.8 million for the year
ended December 31, 1998, as compared to the same period in 1997. Gross profit as
a percentage of revenue for the year ended December 31, 1998, decreased to 23.2%
from 23.7% for the same period in 1997. This decrease was primarily due to a
higher mix of labor revenue to total revenue for the period. Labor profit
margins are lower than rental and sale profit margins. Much of the increased
revenue was from industrial projects requiring a high percentage of labor, thus
causing overall profit margins to be lower.

Selling and Administrative Expenses

Selling and administrative expenses for the year ended December 31, 1998,
increased 14.7% to $29.6 million from $25.8 million for the same period in 1997.
Selling and administrative expenses as a percentage of revenue for the year
ended December 31, 1998, decreased to 14.4% from 16.1% for the same period in
1997. For the year ended December 31, 1998,




                                       10
<PAGE>   11



the savings realized from a cost reduction program implemented in 1997 were
offset by a $4.0 million increase in payroll expense.

Operating Income

As a result of the above, operating income for the period ended December 31,
1998, increased to $18.1 million from $9.7 million for the same period in 1997.
The operating income results from 1997 were affected by certain nonrecurring
start-up expenses incurred by the Company as a result of the Company's efforts
to establish itself as a stand-alone entity.

Interest Expense

Interest expense for the year ended December 31, 1998, increased 15.0% to $17.7
million from $15.4 million for the same period in 1997. The increase was mainly
due to a higher weighted average interest rate on all outstanding debt. For 1998
and 1997, the weighted average interest rate was 9.8% and 8.9%, respectively.

Extraordinary Item

The extraordinary item for the year ended December 31, 1998, was $4.3 million
that represented the writeoff of the pro rata share of deferred financing costs
related to the portion of the debt repaid with proceeds from the issuance of the
10-1/4% Senior Notes in February 1998.

Net Loss

Net loss (before accretion of preferred stock dividends) improved to $3.7
million loss from $5.3 million loss for the same period in 1997.



Liquidity and Capital Resources

The Company has historically utilized internal cash flow from operations and
borrowings under the Bank Facility (see below) to fund its operations, capital
expenditures, and working capital requirements. As of December 31, 1999, the
Company had working capital of $5.6 million including cash and cash equivalents
of $0.24 million.

Historically, the principal uses of cash have been capital expenditures
(primarily scaffolding) and working capital. The Company has also used cash to
repay term loans for which payments amounted to $8.3 million in 1997. In
February 1998, $119.8 million of the term loans were repaid with proceeds from
the offering of the 10-1/4% Senior Notes and $500 in payments were made in June
1998. The company paid $6.3 million in interest relating to the 10-1/4% Senior
Notes in August 1998. Additionally the company paid approximately $6.7 million
in interest relating to the notes in February 1999 and $6.7 million in interest
relating to the notes in August 1999.

For the years ended December 31, 1999, 1998 and 1997, cash provided by operating
activities was $21.1 million, $26.8 million and $12.0 million, respectively.

The Company's capital expenditure requirements are comprised of maintenance and
expansion expenditures. Net capital expenditures for the Company were $19.6
million, $14.8 million and $9.7 million, for the years ended December 31, 1999,
1998 and 1997, respectively.

Borrowings under the revolving loan facility are governed by a borrowing base
equal to 85% of eligible accounts receivable. A $15.0 million sub-facility is
available for the issuance of letters of credit. In addition, in March 1999, the
Company amended the Credit Agreement to allow additional borrowings of $10
million for ongoing working capital and general corporate needs. As of December
31, 1999, the Company had $22.6 million in unused senior secured borrowing
capacity under the Bank Facility. The interest rate on each loan facility under
the Bank Facility is variable. During the year ended December 31, 1999, the
interest rate on loans outstanding under the term loan facility was an annual
dollar-weighted rate of 9.9%. Total payments for interest and principal by the
Company under the Bank Facility in 1997 were $14.1 million and $8.3 million,
respectively. During the year ended December 31, 1998, total payments for
interest were $11.5 million. During the year ended December 31, 1998, $121.3
million of the term loans were repaid of which $119.8 million was from the




                                       11
<PAGE>   12


proceeds of the 10-1/4% Senior Note offering. During the year ended December 31,
1999, total payments for interest were $16.2 million and $5.0 million of the
term loans were repaid.

The Bank Facility contains financial and operating covenants, including among
other things, that the Company maintain certain financial ratios and satisfy
certain financial tests, 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 the loan covenants at December 31, 1999.

In March 1999, the Company secured a $30 million Term B Loan commitment to
enable it to make future acquisitions. Certain provisions contained in the
credit agreement governing the Bank Facility were amended to eliminate a
requirement that revolving loans be periodically reduced. Also, certain of the
covenants contained in the credit agreement were amended to permit the Company
to incur certain additional indebtedness, engage in a broader range of business,
make certain additional investments and capital expenditures and reinvest asset
disposition proceeds within 180 days, rather than prepay the term loan
facilities with such proceeds.

Net Operating Losses

At December 31, 1999, the Company had net operating loss carryforwards,
resulting primarily from depreciation timing differences, of $88.7 million, for
federal income tax purposes. As a result of such loss carryforwards, cash paid
for income taxes in 1999 was minimal. The Company does not expect to expend cash
for taxes in the next several years.

Effect of Inflation; Seasonality

Inflation has not generally been a material factor affecting the Company's
business. In recent years, the cost of scaffolding equipment has remained
relatively stable due to competitive pressures within the industry. The
Company's general operating expenses, such as salaries, employee benefits and
facilities costs are subject to normal inflationary pressures.

The operations of the Company are generally subject to seasonal fluctuations
coinciding with the spring and fall turnaround schedules of its major customers.

Year 2000 Readiness Disclosure

The Year 2000 issue is the result of computer programs being written using two
digits rather than four to define the applicable year. Computer programs that
have date sensitive software may recognize a date using "00" as the year 1900
rather than the year 2000. This could result in a system failure or
miscalculations causing disruptions of operations, including, among other
things, a temporary inability to process transactions.

The Company is fully Year 2000 compliant with all systems. All projects were
tested and fully implemented by November 1999. There have been no operational
disruptions as a result of the Year 2000 changes. The total cost for executing
the Year 2000 plan was approximately $50.

Accounting Standard Not Yet Implemented

In June 1998, the Financial Accounting Standards Board (FASB) issued SFAS No.
133, "Accounting for Derivative Instruments and Hedging Activities." SFAS No.
133 establishes accounting and reporting standards requiring that every
derivative instrument (including certain derivative instruments embedded in
other contracts) be recorded in the balance sheet as either an asset or
liability measured at its fair value and that changes in the derivative's fair
value be recognized currently in earnings unless specific hedge accounting
criteria are met. Special accounting for qualifying hedges allows a derivative's
gains and losses to offset related results on the hedged item in the income
statement, and requires that a company must formally document, designate, and
assess the effectiveness of transactions that receive hedge accounting. SFAS No.
133 is effective for fiscal years beginning after June 15, 2000. The Company has
not yet quantified the impacts of adopting SFAS No. 133 on its consolidated
financial statements nor has it determined the timing or method of its adoption
of SFAS No. 133. However, SFAS No. 133 could increase volatility in earnings and
other comprehensive income.





                                       12
<PAGE>   13


ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is exposed to market risk related to changes in interest rates and
selectively uses derivative financial instruments to manage these risks. The
value of market risk sensitive derivatives and other finance instruments is
subject to change as a result of movements in market rates and prices.
Sensitivity analysis is one technique used to evaluate these impacts. Based upon
a hypothetical ten percent change in interest rates, the potential losses in
future earnings, fair value and cash flows are not material.


ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

See "Index to Financial Statements and Schedules" on Page F-1.


ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS AND FINANCIAL DISCLOSURE.

None.


ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

Directors and Executive Officers

The following table sets forth certain information with respect to directors and
executive officers of the Company. Each director and officer holds office until
a successor is elected and qualified or until his earlier death, resignation or
removal.

<TABLE>
<CAPTION>

               Name                   Age      Position and Offices
               ----                  -----     --------------------
<S>                                  <C>       <C>
     David L. Jaffe                   41       Chairman of the Board
     John M. Monter                   52       Chief Executive Officer, President and Director
     Ian R. Alexander                 53       Chief Financial Officer, Vice President, Finance
     David R. Cichy                   49       Vice President, Operations - Northern Region
     Raymond L. Edwards               46       Vice President, Administration and Secretary
     Guy S. Huelat                    38       Vice President, Resource Management
     James "Marty" McGee              43       Vice President, Operations - Southeast Region
     Scott M. Robinson                52       Vice President, Operations - Central Region
     Robert Bonczek                   54       Director
     James S. Carlisle                57       Director
     Donald R. Chappel                48       Director
     Vincent P. Langone               56       Director
     Karl R. Wyss                     59       Director

</TABLE>



David L. Jaffe, Chairman of the Board: David Jaffe joined DLJ in 1984 and became
a Managing Director in 1995. He has 15 years experience in investing private
equity capital, in mergers and acquisitions and in structuring and arranging
financing for leveraged transactions. He received a BA cum laude from Harvard
College in 1980 and an MBA from The Wharton School of the University of
Pennsylvania in 1984. Mr. Jaffe serves on the board of directors of Brand
Scaffold Services, Inc., Duane Reade, Inc. (NYSE:DRD), OSF Holdings Inc.,
(TSX:OSF), Shoppers Drug Mart Inc., Target Media Partners and Terra Nova Group
(NYSE:TNA) and previously served as a director of Cambridge Industries Group,
Inc., NACOLAH Corp., Pharmaceutical Fine Chemicals S.A., EZ Buy and EZ Sell
Recycler Corporation and OHA Financial, Inc. He also serves as a director and a
member of the Executive Committee of Project A.L.S., a non-profit organization
funding directed research for treatments of Amyotrophic Lateral Sclerosis (Lou
Gehrig's disease).





                                       13
<PAGE>   14



John M. Monter, Chief Executive Officer, President and Director: Mr. Monter has
served as a director, Chief Executive Officer and President since the
Acquisition. Prior to joining the Company at the time of the Acquisition, Mr.
Monter held a variety of corporate and operating assignments at Cooper
Industries, Inc. ("Cooper") where he began his career in 1977. Mr. Monter was
President of the Bussmann Division of Cooper, which manufactures electrical
overcurrent fuses, from 1992 to 1996.

Ian R. Alexander, Chief Financial Officer, and Vice President, Finance: Prior to
joining the Company as Chief Financial Officer, and Vice President, Finance in
April 1998, Mr. Alexander had a variety of assignments with BP Oil Company from
1973 until 1993 in Europe, Africa and the U.S.A. He then became Chief Financial
Officer and Executive Vice President of Purina Mills, Inc. until it was sold to
Koch Industries in March, 1998.

David R. Cichy, Vice President, Operations - Northern Region: Mr. Cichy was
appointed Vice President, Operations - Northern Region in 1996. Beginning in
1978, Mr. Cichy served in various construction management functions with Rust
Industrial including Vice President, Resource Management from 1993 to 1996.

Raymond L. Edwards, Vice President, Administration and Secretary: Mr. Edwards
joined the Company in his current role in November 1996. Prior to joining the
Company, he held a variety of management positions, most recently, with Cooper
from 1984 to 1996, including Vice President, Human Resources from 1990 to 1996.

Guy S. Huelat, Vice President, Resource Management: Mr. Huelat joined the
Company in January 1997 in his current position. Prior to joining the Company,
Mr. Huelat was a Plant Manager from 1989 to 1994 and a Materials Manager from
1994 to 1996 at Cooper. From 1996 to 1997, he was Director of Logistics for
Planning and Customer Service for Kimble Glass, Inc.

James "Marty" McGee, Vice President, Operations - Southeast Region: Mr. McGee
has held his current position since the Acquisition. From 1993 until the
Acquisition, Mr. McGee held various Region Management positions with Rust
Industrial and Waste Management Technologies (WMX). Mr. McGee has been with the
Company in various management positions since 1981 including President, Southern
Regional Scaffolding in 1993, Southern Region Manager in 1994 and Vice
President, Southern Operations for WMX Services group (29 locations, 5 different
Rust companies), from 1995 to 1996.

Scott M. Robinson, Vice President, Operations - Southwest Region: Mr. Robinson
joined the Company as Vice President, Marketing in March 1997 and in December of
1997 he assumed the position of Vice President, Operations - Central Region. In
January 1998 he took over his current assignment over the Southwest Region.
Prior to joining the Company, Mr. Robinson held various positions at Cooper,
including Vice President, Sales from 1993 to 1997 and Vice President, Marketing
from 1987 to 1993.

Robert Bonczek, Director: Mr. Bonczek has been President and a director of
ApsenTree Capital, a private money management firm since 1991, and has been a
director of the Company since the Acquisition. He is a legal consultant to
Wilmer, Cutler and Pickering. Mr. Bonczek is a director of DCV, Inc. He is also
serving as Acting Chief Administrative Officer and Acting CFO for Trimeris,
Inc., a NASDAQ listed biotech company.

James S. Carlisle, Director. Mr. Carlisle has been Chief Executive Officer of
Carlisle Enterprises, LLC, a private equity investment firm engaged in the
acquisition and management of leveraged buyout companies since 1989, and has
been a director of the Company since the Acquisition.

Donald R. Chappel, age 48, was Executive Vice President and Chief Financial
Officer of Waste Management, Inc. from August, 1999 through February, 2000, when
he resigned to pursue other opportunities. Prior to his most recent position,
Mr. Chappel was Senior Vice President - Operations and Administration since the
consummation of the WM Holdings Merger in July 1998. Prior thereto, Mr. Chappel
held several positions at WM Holdings, including serving as Acting Chief
Financial Officer since October, 1997, Vice President - Financial Services since
November, 1996 and Vice President and Controller (North American operations)
since August 1995. From 1991 to July, 1995, Mr. Chappel was Vice President and
Controller - West and Mountain Areas of Waste Management of North America, Inc.,
and from July to August, 1995 served as Vice President and Controller of
Chemical Waste Management, Inc. Prior thereto he had served as Vice President
and Controller - WMI Urban Services, beginning in June, 1987 when he joined WM
Holdings.

Vincent P. Langone, Director: Mr. Langone has been the director of the Company
since the acquisition. He has been Chairman, President and Chief Executive
Officer of Formica Corporation since May, 1998. From 1995 to 1997, Mr.




                                       14
<PAGE>   15


Langone served as President of Interbuild International, Inc. which provides
operational management and general consulting services. Mr. Langone is a
director of United Retail Group and Summit Bank. From 1989 to 1995, Mr. Langone
served as Chairman, President and Chief Executive Officer of Formica
Corporation.

Karl R. Wyss, Director: Mr. Wyss is a Managing Director of DLJMB, Inc. and has
been a director of the Company since the Acquisition. Prior to joining DLJMB,
Inc. in 1993, he was Chairman and Chief Executive Officer of Lear Siegler Inc.
from 1989 to 1993. He serves on the boards of CommVault Systems, Inc., EZ Buy &
EZ Sell Recycler Corp., Localiza Rent A Car S.A., OSF, Inc., Mallory Limitada,
Pharmaceutical Fine Chemicals, S.A. and Von Hoffman Press, Inc.


ITEM 11. EXECUTIVE COMPENSATION

The information contained in Item 11 is not presented in thousands of dollars.

Compensation of Directors

Directors of the Company do not receive cash compensation for serving as
directors; however, in March 1997, pursuant to Holdings' Stock Option Plan for
Outside Directors, directors who were not employees of Holdings, the Company or
any of their institutional shareholders, were each awarded options (the
"Director Options") to purchase 40,000 shares of the common stock of Holdings,
which options vested in March 1999.

Compensation Committee and Insider Interlocks

Compensation of the Company's management is determined by a committee comprised
of Messrs. Jaffe, Monter and Wyss. Mr. Monter is the Chief Executive Officer and
President of the Company. In March 1997, Mr. Monter purchased 386,406
newly-issued shares of the common stock of Holdings and 17,500 newly-issued
shares of preferred stock for an aggregate purchase price of $823,905. In
connection with such purchase, Holdings extended Mr. Monter a recourse loan of
$167,000, which matures in March 2002 (subject to prepayment in the event any
shares are disposed of prior to such time) and bears interest at a rate of 7.03%
per annum. The loan is secured by a pledge of the shares purchased.

Messrs. Jaffe and Wyss are Managing Directors of DLJMB, Inc., the general
partner of DLJMB. Pursuant to a shareholders agreement dated as of September 30,
1996, between DLJMB, Carlisle, Rust, the Company, Holdings and certain other
individuals, Holdings' board consists of seven members, five of whom are
nominated by DLJMB. In addition, the shareholders agreement provides for certain
rights of first refusal in favor of DLJMB, certain rights and obligations on the
part of shareholders to participate in transfers of shares by DLJMB and
preemptive rights for DLJMB under certain circumstances. The shareholders
agreement further provides that DLJMB has the right, subject to certain
conditions, to request that Holdings register securities that they own under the
Securities Act of 1933, as amended (the "Securities Act"), and to participate in
other registrations of Holdings' and the Company's securities, in each case at
Holdings' expense.

In addition, the shareholders agreement provides for certain advisory
relationships and the payment of management advisory fees. For five years after
the date of the agreement, Donaldson, Lufkin & Jenrette Securities Corporation
("DLJSC"), an affiliate of DLJMB, Inc., is engaged as the exclusive financial
and investment banking advisor for Holdings, on customary terms. Pursuant to the
shareholders agreement, DLJMB, Inc. receives an annual advisory fee of $250,000
from Holdings. DLJSC received customary fees in connection with the
underwriting, purchase and placement of the 10-1/4% Senior Notes.

DLJ Capital, the Syndication Agent and a lender under the Bank Facility is an
affiliate of DLJMB. For a description of the Bank Facility, see "Description of
Bank Facility." The proceeds from the sale of the 10-1/4% Senior Notes were used
to repay indebtedness under the Bank Facility, $1.6 million of which was owed to
DLJ Capital on the date of the 10-1/4% Senior Note offering. In connection with
an amendment to the existing Bank Facility, the Company will pay customary fees
to DLJ Capital, as the Syndication Agent and as a lender under the Bank
Facility.

Executive Compensation

The following table sets forth the compensation earned by the Chief Executive
Officer and the six other most highly paid executive officers for services
rendered in 1999:





                                       15
<PAGE>   16


Summary Compensation Table
<TABLE>
<CAPTION>

                                                                                                   Long-Term
                                                          Annual Compensation                   Compensation Awards
                                                  -------------------------------------    -------------------------------
                                                                                             Securities
                                                                              Other         Underlying          All Other
                                                   Salary      Bonus       Compensation     Options/SARS      Compensation
Name and Principal Position                          ($)        ($)             ($)              (#)               ($)
                                                  --------   --------      ------------     ------------      ------------
<S>                                                <C>        <C>           <C>              <C>              <C>
John M. Monter,
Chief Executive Officer                            375,000    283,263        14,452                -            1,600(1)
Ian Alexander,
Chief Financial Officer                            180,253    136,157             -                -            1,600(1)
Raymond L. Edwards,
Vice President, Administration                     149,406    112,856             -                -            1,600(1)
Guy Huelat,
Vice President, Resource Management                133,494    102,172             -                -            1,600(1)
Scott Robinson, Vice President Operations -
Southwest Region                                   148,408     40,000         1,454                -            1,600(1)
Dave Cichy, Vice President Operations
- Northern Region                                  127,123    133,269         6,058                -            1,600(1)
James McGee, Vice President Operations
- Southeast Region                                 140,005    106,567             -                -            1,600(1)

</TABLE>

(1)  Represents the Company's matching 401(k) contributions.


Stock Option Grants in Last Fiscal Year.

No stock options were granted in the year ending December 31, 1999.


The following table summarizes option exercised during the last calendar year
under the Restricted Stock Purchase Agreement and the value of options for
persons named in the Summary Compensation Table.

<TABLE>
<CAPTION>

                                                                              RSO
                                          RSO Granted        RSO Vested     Exercised
                                          -----------        ----------     ---------
<S>                                      <C>                 <C>            <C>
     John M. Monter                           437,500           175,000        87,500
     James "Marty" McGee                       42,000            16,800         8,400
     Raymond L. Edwards                        42,000            16,800         8,400
     Scott Robinson                            40,000            16,000         8,000
     Guy Huelat                                42,000            16,800         8,400
     David Cichy                               40,000            16,000         8,000

</TABLE>

For each one-year period ending on December 31, the annual vesting opportunity
will be the achievement of the annual operating budget and/or financial targets
as approved by the Board .

Employment Agreement

Mr. Monter entered into an employment agreement with the Company on June 1,
1999, pursuant to which he serves as President and Chief Executive Officer. The
employment agreement terminates on March 31, 2003, and provides for an annual
salary of not less than $375,000. Mr. Monter is also eligible for a bonus of up
to 120% of his base salary. The Company undertakes to pay up to $2,000 of
premiums annually under Mr. Monter's life insurance policy. In the event the
Company terminates Mr. Monter's employment without cause or he becomes disabled,
he is entitled to his (i) base salary through the date of termination, earned
bonus for prior fiscal year but not yet paid, and any unreimbursed business




                                       16
<PAGE>   17


expenses (ii) base salary through the last day of the 24th month following the
date of termination ("the Severance Period"); (iii) continued coverage under the
Company's welfare benefits for up to the end of the Severance Period or such
time as Executive is eligible to receive comparable welfare benefits, and in the
case of termination without cause, a bonus equal to $12,500 multiplied by the
number of months remaining in the Severance Period. Any unvested stock options
held by Mr. Monter shall vest upon a change in control of the Company. As a part
of the employment agreement, Mr. Monter has entered into covenants prohibiting
him from competing with the Company, working for any of the Company's
competitors or using proprietary information for a twelve-month period following
his departure from the Company.


ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

Principal Stockholders

All of the issued and outstanding common stock of the Company is held by
Holdings (and pledged to secure the Bank Facility). The following table sets
forth certain information with respect to the beneficial ownership of the common
stock of Holdings as of December 31, 1999, by (i) each person or group known to
the Company who beneficially owns more than five percent of the common stock of
Holdings and (ii) all directors and executive officers of the Company as a
group:

<TABLE>
<CAPTION>
                                                                                Number of
                                                                                Shares of        Percentage
                   Name and Address of Beneficial Owner                        Common stock       of Class
                   ------------------------------------                        ------------      ----------
<S>                                                                            <C>               <C>
     DLJ Merchant Banking Partners, L.P. and related investors (1)                8,762,500          64.4%
     Rust Industrial Services, Inc.(2)
     3003 Butterfield Road
     Oakbrook, IL 60521                                                           2,487,500          18.3%
     Carlisle-Brand Investors, L.P.(3)
     7777 Fay Avenue
     La Jolla, California 92037                                                   1,250,000(4)        9.2%
     David L. Jaffe(5)
     DLJ Merchant Banking Partners, Inc.
     277 Park Avenue
     New York, New York 10172                                                             -             -
     Karl R. Wyss(5)
     DLJ Merchant Banking Partners, Inc.
     277 Park Avenue
     New York, New York 10172                                                             -             -
     James S. Carlisle(6)
     Carlisle Enterprises
     7777 Fay Avenue
     La Jolla, California 92037                                                           -             -
     All directors and officers as a group(5)(6)                                  1,097,773(7)        8.1%

</TABLE>

(1)  Consists of shares held by DLJMB, DLJ Offshore Partners, C.V. ("Offshore"),
     DLJ Merchant Banking Funding, Inc. ("Funding") and DLJ International
     Partners, C.V. ("International"), each of which is affiliated with DLJSC.
     See "Certain Relationships and Related Transactions." The address of each
     of DLJMB and Funding is 277 Park Avenue, New York, New York 10172. The
     address of each of Offshore and International is John B. Gorsivaweg 6,
     Willemstad, Curacao, Netherlands Antilles. As a general partner of DLJMB,
     Offshore and International, DLJMB, Inc. may be deemed to beneficially own
     indirectly all of the shares held by DLJMB, Offshore and International, and
     as the parent of each of DLJ Merchant Banking, Inc. and Funding, Donaldson,
     Lufkin & Jenrette, Inc. may be deemed to beneficially own indirectly all of
     the shares held by DLJMB, Offshore, International and Funding. Donaldson,
     Lufkin & Jenrette, Inc. is a majority owned subsidiary of The Equitable
     Companies Incorporated. The address of DLJ Merchant Banking, Inc. and
     Donaldson, Lufkin & Jenrette, Inc. is 277 Park Avenue, New York, New York
     10172.




                                       17
<PAGE>   18



(2)  Rust Industrial is a wholly owned subsidiary of Rust International, Inc.
     ("RII") which is majority owned by WMIS. As a result, WMIS and RII may be
     deemed to beneficially own all of the shares held by Rust Industrial. The
     address for each of WMIS and RII is 1001 Fannin, Houston, TX 77002.

(3)  As the general partner of Carlisle, Carlisle Group, L.P. ("Carlisle Group")
     may be deemed to beneficially own indirectly all of the shares held by
     Carlisle. As the general partner of Carlisle Group, Carlisle Enterprises,
     LLC may be deemed to beneficially own indirectly all of the shares held by
     Carlisle. The address of Carlisle Group and Carlisle Enterprises, LLC is
     7777 Fay Avenue, La Jolla, California 92037.

(4)  Does not include (i) 47,500 shares issuable upon the exercise of currently
     exercisable options held by Carlisle Group and (ii) up to 871,250 shares
     issuable upon exercise of options held by Carlisle Group, which options are
     not currently exercisable and will not be exercisable within 60 days of the
     date of this prospectus.

(5)  Messrs. Jaffe and Wyss are officers of DLJ Merchant Banking, Inc., an
     affiliate of DLJMB and DLJSC. Share data shown for such individuals
     excludes shares shown as held by DLJMB and related investors, as to which
     such individuals disclaim beneficial ownership.

(6)  Mr. Carlisle is a managing partner of Carlisle Enterprises, LLC, the sole
     general partner of the sole general partner of Carlisle. Share data shown
     for Mr. Carlisle excludes shares shown as held by Carlisle, as to which Mr.
     Carlisle disclaims beneficial ownership.

(7)  Does not include shares which may be purchased upon exercise of Director
     Options or options awarded pursuant to the Company's employee benefit
     plans, none of which are vested or will be exercisable within 60 days of
     the date of the prospectus.


ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Pursuant to the shareholders agreement dated as of September 30, 1996, between
DLJMB, Carlisle, Rust, the Company, Holdings and certain other individuals,
Holdings' board consists of seven members: five nominated by DLJMB, one
nominated by Carlisle and one nominated by Rust Industrial. The shareholders
agreement also provides for certain restrictions on transfers of Holdings'
common stock. In addition, the shareholders agreement provides for certain
rights of first refusal in favor of DLJMB, certain rights and obligations on the
part of shareholders to participate in transfers of shares by DLJMB and
preemptive rights for DLJMB, Carlisle and Rust Industrial under certain
circumstances. The shareholders agreement further provides that DLJMB, Carlisle
and Rust Industrial each have the right, subject to certain conditions, to
request that Holdings register securities that they own under the Securities Act
and to participate in other registrations of Holdings' and the Company's
securities, in each case at Holdings' expense.

The shareholders agreement provides for certain advisory relationships and the
payment of management advisory fees. For five years after the date of the
agreement, DLJSC is engaged as the exclusive financial and investment banking
advisor for Holdings, on customary terms. Pursuant to the shareholders
agreement, DLJMB, Inc., the sole general partner of DLJMB, and Carlisle Group,
the sole general partner of Carlisle, each receive an annual advisory fee of
$250 from Holdings. DLJSC received customary fees in connection with the
underwriting, purchase and placement of the 10-1/4% Senior Notes.

Holdings has entered into a stock option agreement with Carlisle Group. The
stock option agreement gives Carlisle Group the right to acquire up to 918,750
shares of the common stock of Holdings for $1 per share. The exact number of
shares that may be acquired pursuant to the stock option agreement depends upon
Holdings' financial performance, equity financings by Holdings and other
factors. Carlisle Group's rights under the stock option agreement vest
progressively throughout the term of the agreement. The stock option agreement
will terminate on or, under certain circumstances, before September 30, 2006.

DLJ Capital, the Syndication Agent and a lender under the Bank Facility, is an
affiliate of DLJMB and DLJSC. For a description of the Bank Facility, see
"Description of Bank Facility." The proceeds from the sale of the 10-1/4% Senior
Notes were used to repay indebtedness under the Bank Facility, $1.6 million of
which was owed to DLJ Capital. In connection with an amendment to the existing
Bank Facility, the Company paid customary fees to DLJ Capital, as the
Syndication Agent and as a lender under the Bank Facility.

In connection with the Acquisition, WMIS and the Company entered into a
transition services agreement. Pursuant to such agreement, WMIS pays the Company
a fee for transition services of $725 quarterly. The first such payment was made
on December 31, 1996, and such payments continued through September 30, 1999. In
addition, the Company provides computer support to WMIS, and receives a payment
of $75 per month for such service.





                                       18
<PAGE>   19



In March 1997, certain officers and employees of the Company purchased a total
of 878,364 newly-issued shares of Holdings' common stock for $1 per share and
42,832 shares of preferred stock for $25 per share. In connection with such
purchases, Holdings extended recourse loans to executive officers in the
aggregate amount of $341. In July 1999, Holdings extended recourse loans to the
members of the Brand Advisory Team in the amount of $515, and received cash in
the amount of $129, both of which were used as consideration for the exercise of
certain stock options of Holdings' common stock. The 1997 and 1999 notes earn
interest at 7.03% and 5.22% respectively and mature in 2002 and 2006,
respectively. These notes are secured by 643,500 shares owned by such officers
and employees.


ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

Documents Filed as Part of this Report

(1) and (2) Financial Statement and Financial Statement Schedules

See Index to Financial Statements and Financial Schedules on Page F-1 of this
report.

(3) Exhibits.

See Index on Page E-1 of this report.

Reports filed with Form 8-K

None filed.






                                       19
<PAGE>   20










                          INDEX TO FINANCIAL STATEMENTS




<TABLE>
<S>                                                                                                             <C>
Brand Scaffold Services, Inc. and Subsidiaries:
   Report of Independent Public Accountants                                                                     F-2
   Consolidated Statements of Operations for the years ended December 31, 1999, 1998, and 1997                  F-3
   Consolidated Balance Sheets as of December 31, 1999 and 1998                                                 F-4
   Consolidated Statements of Cash Flows for the years ended December 31, 1999, 1998, and 1997                  F-6
   Consolidated Statements of Stockholder's Equity (Deficit) for the years ended December 31,
   1999, 1998, and 1997                                                                                         F-8
   Notes to Consolidated Financial Statements                                                                  F-11

Financial Statement Schedules:
   Schedule II - Valuation and Qualifying Accounts
</TABLE>








                                      F-1
<PAGE>   21


                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS



To Brand Scaffold Services, Inc.:


We have audited the accompanying consolidated balance sheets of Brand Scaffold
Services, Inc. (a Delaware corporation) and subsidiaries as of December 31, 1999
and 1998, and the related consolidated statements of operations, stockholder's
equity (deficit) and cash flows for each of the three years in the period ended
December 31, 1999. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Brand Scaffold Services, Inc.
and subsidiaries as of December 31, 1999 and 1998, and the results of their
operations and their cash flows for each of the three years in the period
December 31, 1999, in conformity with accounting principles generally accepted
in the United States.



ARTHUR ANDERSEN LLP



St. Louis, Missouri
March 10, 2000




                                      F-2
<PAGE>   22



                 BRAND SCAFFOLD SERVICES, INC. AND SUBSIDIARIES


                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                 (In thousands)


<TABLE>
<CAPTION>
                                                                                    Year Ended December 31,
                                                                       -----------------------------------------------


                                                                            1999             1998              1997
                                                                       -------------      -----------      -----------
<S>                                                                    <C>                <C>              <C>
Revenue                                                                     $218,916        $ 205,304        $ 160,660
Operating expenses                                                           171,630          157,673          122,638
                                                                            --------        ---------        ---------
           Gross profit                                                       47,286           47,631           38,022

Selling and administrative expenses                                           31,550           29,568           25,840
Nonrecurring start-up expenses                                                     -                -            2,498
                                                                            --------        ---------        ---------
           Operating income                                                   15,736           18,063            9,684

Interest expense                                                              17,758           17,728           15,422
Interest income                                                                 (159)            (249)            (397)
                                                                            --------        ---------        ---------
           Income (loss) before provision for income tax                      (1,863)             584           (5,341)

Provision for income tax                                                           -                -                -
                                                                            --------        ---------        ---------
           Income (loss) before extraordinary loss                            (1,863)             584           (5,341)

Extraordinary loss on debt extinguishment                                          -            4,329                -
                                                                            --------        ---------        ---------
         Net income (loss)                                                    (1,863)          (3,745)          (5,341)

Less-  Accretion of preferred stock dividends                                 (5,497)          (4,767)          (4,172)
                                                                            --------        ---------        ---------
         Net loss applicable to common stock                                $ (7,360)       $  (8,512)       $  (9,513)
                                                                            ========        =========        =========
</TABLE>



         The accompanying notes to financial statements are an integral
                           part of these statements.




                                      F-3
<PAGE>   23








                 BRAND SCAFFOLD SERVICES, INC. AND SUBSIDIARIES


                           CONSOLIDATED BALANCE SHEETS
                     (In thousands except per share amounts)

<TABLE>
<CAPTION>

                                                                                           December 31,     December 31,
                                                                                               1999             1998
                                                                                           ------------     ------------
<S>                                                                                        <C>              <C>
                                    ASSETS

CURRENT ASSETS:
   Cash and cash equivalents                                                               $     244        $   3,125
   Trade accounts receivable, net of allowance for doubtful accounts of $770 in 1999
     and $812 in 1998                                                                         37,346           31,485
   Costs and estimated earnings in excess of billings on uncompleted contracts                 1,786            2,056
   Note receivable from WMIS, current portion                                                      -            2,175
   Notes receivable, current portion                                                             194              132
   Other current assets                                                                        3,225            3,192
                                                                                           ---------        ---------
           Total current assets                                                               42,795           42,165
                                                                                           ---------        ---------
PROPERTY AND EQUIPMENT:
   Land                                                                                        1,652            1,633
   Buildings                                                                                   2,829            2,284
   Vehicles and other equipment                                                               17,634           11,281
   Scaffolding equipment                                                                     184,152          172,970
   Leasehold improvements                                                                        704              853
                                                                                           ---------        ---------
           Total property and equipment, at cost                                             206,971          189,021

   Less-  Accumulated depreciation and amortization                                           45,118           27,421
                                                                                           ---------        ---------
           Total property and equipment, net                                                 161,853          161,600
                                                                                           ---------        ---------
OTHER ASSETS:
   Deferred financing costs, net                                                               4,779            5,350
   Notes receivable, net of current portion                                                      477              759
   Other assets                                                                                  968            1,186
                                                                                           ---------        ---------
           Total other assets                                                                  6,224            7,295
                                                                                           ---------        ---------
           Total assets                                                                    $ 210,872        $ 211,060
                                                                                           =========        =========
</TABLE>


                         (Continued on following page)




                                      F-4
<PAGE>   24




                 BRAND SCAFFOLD SERVICES, INC. AND SUBSIDIARIES


                    CONSOLIDATED BALANCE SHEETS (Continued)
                    (In thousands except per share amounts)
<TABLE>
<CAPTION>


                                                                                          December 31,     December 31,
                                                                                              1999             1998
                                                                                          ------------     ------------
<S>                                                                                       <C>              <C>
                 LIABILITIES AND STOCKHOLDER'S EQUITY (DEFICIT)

CURRENT LIABILITIES:
   Revolving loan                                                                         $    3,960         $      -
   Current maturities of long-term debt                                                        6,000            5,000
   Current portion notes payable and capital lease obligations                                   903              831
   Accounts payable and accrued expenses                                                      25,648           23,454
   Billings in excess of costs and estimated earnings on uncompleted contracts                   731              800
                                                                                          ----------         --------
           Total current liabilities                                                          37,242           30,085
                                                                                          ----------         --------

LONG-TERM DEBT                                                                               147,500          153,500
                                                                                          ----------         --------

NOTES PAYABLE AND CAPITAL LEASE OBLIGATIONS                                                    3,499            4,176
                                                                                          ----------         --------

DEFERRED INCOME TAXES                                                                          2,195            1,875
                                                                                          ----------         --------
14.5% SENIOR EXCHANGEABLE PREFERRED STOCK, $0.01 par value, 1,250,000 shares
   authorized, 1,042,460 issued and outstanding                                               41,404           35,907
                                                                                          ----------         --------
STOCKHOLDER'S EQUITY (DEFICIT):
   Common stock, $0.01 par value, 100 shares authorized, issued and outstanding                    -                -
   Paid-in capital                                                                            19,369           18,525
   Receivables from sale of Holdings' common stock                                              (822)            (336)
   Predecessor basis adjustment                                                              (13,038)         (13,038)
   Cumulative translation adjustment                                                            (851)          (1,368)
   Accumulated deficit                                                                       (25,626)         (18,266)
                                                                                          ----------         --------
           Total stockholder's equity (deficit)                                              (20,968)         (14,483)
                                                                                          ----------         --------
           Total liabilities and stockholder's equity (deficit)                            $ 210,872         $211,060
                                                                                          ==========         ========
</TABLE>



         The accompanying notes to financial statements are an integral
                           part of these statements.




                                      F-5
<PAGE>   25






                 BRAND SCAFFOLD SERVICES, INC. AND SUBSIDIARIES



                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In thousands)


<TABLE>
<CAPTION>
                                                                                    Year Ended December 31,
                                                                         -----------------------------------------------


                                                                            1999             1998              1997
                                                                         -----------       -----------      ------------
<S>                                                                      <C>               <C>              <C>

CASH FLOWS FROM OPERATING ACTIVITIES:
   Net income (loss)                                                      $  (1,863)        $  (3,745)       $  (5,341)
   Adjustments to reconcile net income (loss) to net cash provided
     by operating activities-
       Deferred income tax provision                                             29               (42)            (167)
       Depreciation and amortization                                         24,491            17,234           13,294
       Extraordinary loss on debt extinguishment                                  -             4,329                -
       Changes in operating assets and liabilities-
         Trade accounts receivable, net                                      (5,861)           (7,813)          (1,513)
         Costs and estimated earnings in excess of billings on
           uncompleted contracts                                                270                89              109
         Notes receivable                                                       220               253            1,973
         Scaffolding equipment                                                4,140             4,264            4,540
         Accounts payable and accrued expenses                                2,194             7,940               15
         Billings in excess of costs and estimated earnings on
           uncompleted contracts                                                (69)               54              109
       Other                                                                 (2,403)            4,190           (1,036)
                                                                          ---------         ---------         --------
           Net cash provided by operating activities                         21,148            26,753           11,983
                                                                          ---------         ---------         --------
CASH FLOWS FROM INVESTING ACTIVITIES:
   Purchase of property and equipment                                       (23,452)          (25,519)         (14,733)
   Receipts on note receivable from WMIS                                      2,175             2,700            2,200
   Proceeds from sales of property and equipment other than
     scaffolding                                                                 55                43               37
   Payments for acquisitions                                                 (1,875)           (2,100)               -
                                                                          ---------         ---------         --------
           Net cash used for investing activities                           (23,097)          (24,876)         (12,496)
                                                                          ---------         ---------         --------
CASH FLOWS FROM FINANCING ACTIVITIES:
   Proceeds from long-term debt                                                   -           130,000                -
   Payments of long-term debt                                                (5,000)         (121,250)          (8,250)
   Borrowings (payments) of revolving loans                                   3,960            (4,500)           4,500
   Payments on notes payable and capital lease obligations                     (605)             (438)               -
   Debt issuance financing costs                                                  -            (4,829)               -
   Issuance of preferred stock                                                    -                 -            1,062
   Capital contribution from Holdings                                           713                48              537
                                                                          ---------         ---------         --------
         Net cash used for financing activities                                (932)             (969)          (2,151)
                                                                          ---------         ---------         --------
</TABLE>

                         (Continued on following page)





                                      F-6
<PAGE>   26









                 BRAND SCAFFOLD SERVICES, INC. AND SUBSIDIARIES


                CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
                                 (In thousands)

<TABLE>
<CAPTION>

                                                                                    Year Ended December 31,
                                                                       ------------------------------------------------
                                                                            1999             1998              1997
                                                                       ------------      -----------       ------------
<S>                                                                     <C>              <C>               <C>
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
                                                                           $ (2,881)       $     908         $  (2,664)

CASH AND CASH EQUIVALENTS, beginning of period                                3,125            2,217             4,881
                                                                           --------        ---------         ---------
CASH AND CASH EQUIVALENTS, end of period                                    $   244        $   3,125         $   2,217
                                                                           ========        =========         =========
SUPPLEMENTAL CASH FLOW DISCLOSURES:
   Interest paid                                                           $ 16,008         $ 11,469          $ 14,138
   Income taxes paid                                                              -                -               113

NONCASH TRANSACTIONS:
   Paid in-kind accretion of preferred stock dividends                    $   5,497        $   4,767         $   4,172
   Receipt of scaffolding as payment in lieu of cash on accounts
     receivable                                                                   -                -               422
   Purchase of equipment with capital lease                                     600            3,800                 -


</TABLE>







         The accompanying notes to financial statements are an integral
                           part of these statements.





                                      F-7
<PAGE>   27









                 BRAND SCAFFOLD SERVICES, INC. AND SUBSIDIARIES


           CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY (DEFICIT)
                      (in thousands except share amounts)



<TABLE>
<CAPTION>

                                                   Receivables
                                                   from Sale of
                          Common Stock              Holding's       Predecessor                Cumulative
                         --------------  Paid In      Common            Basis     Accumulated  Translation            Comprehensive
                         Shares Dollars  Capital      Stock          Adjustment    Deficit     Adjustment    Total    Income (Loss)
                         ------ -------  -------   ------------     -----------   -----------  -----------  -------   --------------
<S>                      <C>    <C>      <C>       <C>              <C>           <C>          <C>           <C>       <C>
Balance,
   December 31,
   1996                  100        -     17,604           -           (13,038)         (241)         (78)    4,247
Comprehensive
   income (loss):
   Net income
     (loss)                -        -          -           -                 -        (5,341)           -    (5,341)      $(5,341)
   Translation
     adjustment            -        -          -           -                 -             -         (447)     (447)         (447)
                                                                                                                          -------
Comprehensive
     (loss)                                                                                                               $(5,788)
                                                                                                                          =======
Paid-in-kind
   accretion of
   preferred
   dividends               -        -          -           -                 -        (4,172)           -    (4,172)
Capital
   contribution
   from DLJ
   Brand
   Holdings, Inc.          -        -        873           -                 -             -            -       873
Issuance of
   promissory
   notes from
   officers and
   employees               -        -          -        (336)                -             -            -      (336)
                       -----    -----     ------      ------          --------        ------        -----   -------
Balance,
   December 31,
   1997                  100        -     18,477        (336)          (13,038)       (9,754)        (525)   (5,176)
                       -----    -----     ------      ------          --------        ------        -----   -------


</TABLE>


                         (Continued on following page)




                                      F-8
<PAGE>   28








                 BRAND SCAFFOLD SERVICES, INC. AND SUBSIDIARIES

      CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY (DEFICIT) (Continued)
                       (in thousands except share amounts)

<TABLE>
<CAPTION>


                                                   Receivables
                                                   from Sale of
                          Common Stock              Holding's       Predecessor                Cumulative
                         --------------  Paid In      Common           Basis      Accumulated  Translation            Comprehensive
                         Shares Dollars  Capital      Stock          Adjustment     Deficit     Adjustment   Total    Income (Loss)
                         ------ -------  -------   ------------     -----------   -----------  -----------  -------   --------------
<S>                      <C>    <C>      <C>       <C>              <C>           <C>          <C>           <C>       <C>

Balance,
   December 31,
   1997                    100     $ -  $ 18,477      $(336)          $(13,038)   $  (9,754)   $   (525)    $(5,176)
Comprehensive
   income (loss):
   Net income
     (loss)                  -       -         -          -                  -       (3,745)          -     (3,745)     $(3,745)
   Translation
     adjustment              -       -         -          -                  -            -        (843)      (843)        (843)
                                                                                                                        -------
Comprehensive
   (loss)                                                                                                               $(4,588)
                                                                                                                        =======
Capital
   contribution
   from DLJ
   Brand
   Holdings, Inc.            -       -        48          -                  -            -           -         48
Paid-in-kind
   accretion of
   preferred
   dividends                 -       -         -          -                  -       (4,767)          -     (4,767)
                         -----   -----   -------   --------           --------     --------     -------   --------
Balance,
   December 31,
   1998                   100      $ -   $18,525      $(336)          $(13,038)    $(18,266)    $(1,368)  $(14,483)
                         =====   =====   =======   ========           ========     ========     =======   ========
</TABLE>



                         (Continued on following page)




                                      F-9
<PAGE>   29







                 BRAND SCAFFOLD SERVICES, INC. AND SUBSIDIARIES

            CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY (DEFICIT)
                       (in thousands except share amounts)



<TABLE>
<CAPTION>


                                                   Receivables
                                                   from Sale of
                          Common Stock              Holding's       Predecessor                Cumulative
                         --------------  Paid In      Common           Basis      Accumulated  Translation            Comprehensive
                         Shares Dollars  Capital      Stock         Adjustment      Deficit     Adjustment   Total    Income (Loss)
                         ------ -------  -------   ------------     -----------   -----------  -----------  -------   --------------
<S>                      <C>    <C>      <C>       <C>              <C>           <C>          <C>           <C>       <C>
Balance,
   December 31,
   1998                     100    $ -   $18,525       $(336)         $(13,038)    $ (18,266)   $ (1,368)  $(14,483)
Comprehensive
   income (loss):
   Net income
     (loss)                  -       -         -           -                 -        (1,863)          -     (1,863)     $(1,863)
   Translation
     adjustment              -       -         -           -                 -             -         517        517          517
Comprehensive                                                                                                            -------
   (loss)                                                                                                                 (1,346)
                                                                                                                         =======
Paid-in-capital              -       -       131           -                 -             -           -        131
   from Stock
   options

Issuance of
   promissory
   notes from
   officers and
   employees                 -       -         -       (486)                 -             -           -       (486)
Capital
   contribution
   from DLJ
   Brand
   Holdings, Inc.            -       -       713          -                  -             -           -        713
Paid-in-kind
   accretion of
   preferred
   dividends                 -       -         -          -                  -        (5,497)          -     (5,497)
                         -----   -----  --------      -----           --------      --------      ------   --------
Balance,
   December 31,
   1999                    100     $ -  $ 19,369      $(822)          $(13,038)     $(25,626)      $(851)  $(20,968)
                         =====   =====  ========      =====           ========      ========      ======   ========

</TABLE>

         The accompanying notes to financial statements are an integral
                            part of this statement.




                                      F-10
<PAGE>   30






                 BRAND SCAFFOLD SERVICES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        (in thousands except share data)


1.  ORGANIZATION AND BUSINESS:

Brand Scaffold  Services,  Inc. (a Delaware  corporation) and its  subsidiaries
(the "Company") are 100% owned by DLJ Brand Holdings,  Inc.  ("Holdings").
Holdings is owned 64.4% by Donaldson,  Lufkin & Jenrette,  Inc. ("DLJ"), 9.2% by
Carlisle Enterprises,  L.P. ("Carlisle"),  18.3% by Rust International Inc.
("Rust International")  through its wholly owned  subsidiary,  Rust  Industrial
Services Inc.  ("RIS") and 8.1% by the directors,  officers and employees of the
Company.  Rust International is a subsidiary of Waste Management Industrial
Services, Inc. ("WMIS").

The Company believes it operates in one segment. The Company provides
scaffolding services primarily to refining, chemical, petrochemical, pulp and
paper, and utility industries, and to a lesser extent and general commercial
clients. Scaffolding 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.

The Company's services are not rendered to or dependent on any single customer
within the industrial or commercial markets and, therefore, the Company does not
believe that a material concentration of credit risk exists, except that one
customer accounted for 13%, 15% and 17% of revenue for the years ended December
31, 1999, 1998, and 1997, respectively.

2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Basis of Presentation

The accompanying 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.

The preparation of financial statements in conformity with generally accepted
accounting principles 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.

Revenue Recognition

The Company recognizes contract revenue on the percentage-of-completion basis
with losses recognized in full when identified. Changes in project performance
and conditions, estimated profitability and final contract settlements may
result in future revisions to costs and income. Substantially all of the
Company's contracts are completed in less than six months. Other revenues are
recognized when the services are performed.

Rental and Sales of Scaffolding

For the years ended December 31, 1999, 1998 and 1997 revenues from the rental of
scaffolding were $54,653, $50,137 and $40,847 respectively.





                                      F-11
<PAGE>   31


The Company periodically sells scaffolding 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. Net book
value is determined, assuming the oldest scaffolding is sold first, as the
Company maintains inventory records on a group basis. Revenues and gross profit
from sales of scaffolding were $5,731 and $1,591, respectively, for the year
ended December 31, 1999, $5,757 and $1,493, respectively, for the year ended
December 31, 1998, and $7,714 and $3,174, respectively, for the year ended
December 31, 1997.

Cash and Cash Equivalents

The Company considers all short-term deposits purchased with original maturities
of three months or less to be cash equivalents.

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. The cost of
property and equipment is depreciated over the estimated useful lives on the
straight-line method as follows:

<TABLE>
<S>                                                  <C>
     Buildings                                       10 to 30 years
     Vehicles and other equipment                    3 to 8 years
     Scaffolding equipment                           2 to 20 years
     Leasehold improvements                          Life of the applicable lease or life of the
                                                     improvement, whichever is shorter
</TABLE>

For the years ended December 31, 1999, 1998 and 1997, depreciation and
amortization expense was $23,769, $16,509, and $12,325 respectively.

Deferred Financing Costs

The Company deferred financing costs of $6,624 which is being amortized over the
life of the Credit Agreement. In 1998, the Company recorded an extraordinary
loss of $4.3 million to write off deferred financing costs related to the early
extinguishment of debt. For the years ended December 31, 1999, 1998 and 1997,
amortization expense was $722, $725, and $969 respectively. Accumulated
amortization was $700 and $924, as of December 31, 1999 and 1998, respectively.
In connection with the February 1998 issuance of senior notes, the Company
incurred financing fees and expenses of $4.8 million, which were deferred and
are being amortized over 10 years.

Derivative Financial Instruments

The Company uses an interest rate collar to hedge its exposure to interest rate
fluctuations. The collar has the effect of establishing a maximum and a minimum
interest rate on a portion of the Company's underlying variable rate debt
obligations. The maximum and minimum interest rates associated with the interest
rate collar are 8.50% and 5.69%, respectively. In 1998, the Company recorded an
expense of $599 related to this interest rate collar.

Asset Impairment

If facts and circumstances suggest that a long-lived asset may be impaired, the
carrying value is reviewed. If this review indicates that the value of the asset
will not be recoverable, as determined based on projected undiscounted cash
flows related to the asset over its remaining life, the carrying value of the
asset is reduced to its estimated fair value.

Foreign Operations

The assets and liabilities of the Company's wholly owned foreign subsidiary,
Brand Scaffold Services of Canada, Inc. are translated at the rates of exchange
in effect on the balance sheet date while income statement accounts are
translated at the average exchange rate in effect during the period. The
resulting translation adjustments are charged or credited to the cumulative
translation adjustment account included in stockholder's equity (deficit).
Revenue from the Canadian operation and scaffolding equipment in Canada are less
than 10% of the consolidated totals for the Company.





                                      F-12
<PAGE>   32


3.  NOTES RECEIVABLE:

Notes receivable result from scaffolding sales. As of December 31, 1999, and
1998, $671 and $891 of such notes maturing in 2 to 4 years were outstanding with
interest rates ranging from 8.5% to 9.0%, and 9.75% to 11.00% respectively.

4.  INCOME TAXES:

Deferred income taxes reflect the net 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 the
reinvested earnings were to be remitted, the U. S. income taxes under current
law would be immaterial.

For the years ended December 31, 1999, 1998 and 1997, such provision consisted
of a deferred domestic tax (benefit) of ($29), ($238) and ($287), current
foreign tax (benefit) expense of ($29), $42 and $167, and deferred foreign tax
expense of $58, $196 and $120, respectively.

The reconciliation of the statutory federal income tax (benefit) expense on the
Company's pretax income (loss) to the actual provision for income taxes for the
years ended December 31, 1999, 1998 and 1997 are as follows:

<TABLE>
<CAPTION>
                                                                                  1999        1998         1997
                                                                               ----------  ----------  -----------
<S>                                                                            <C>         <C>          <C>

     Statutory federal income taxes                                                $(633)    $(1,333)     $(1,869)
     State and local taxes, net of federal                                           (95)       (251)        (174)
     Foreign taxes                                                                     7          54          287
     Valuation allowance                                                             604       1,240        1,918
     Other                                                                           117         290         (162)
                                                                                   -----     -------      -------
                Provision for income tax                                             $ -         $ -          $ -
                                                                                   =====     =======      =======
</TABLE>


The components of the net deferred income tax liability as of December 31, 1999
and 1998, are as follows:

<TABLE>
<CAPTION>

                                                                                         1999          1998
                                                                                      -----------   ----------
<S>                                                                                   <C>           <C>

     Deferred tax assets:
        Accrued liabilities                                                               $ 8,342    $  7,925
        Property and equipment                                                              1,001       1,674
        Net operating loss carryforward                                                    35,491      34,401
        Valuation allowance                                                                (8,940)     (8,336)
                                                                                          -------    --------
                 Deferred tax assets                                                      $35,894    $ 35,664
                                                                                          -------    --------



     Deferred tax liabilities:
        Note receivable from WMIS                                                          $    -    $   (870)
        Property and equipment                                                            (34,161)    (32,966)
                                                                                          -------    --------
                 Deferred tax liabilities                                                 (34,161)    (33,836)
                                                                                          -------    --------
     Deferred income tax asset, net                                                       $ 1,733    $  1,828
                                                                                          =======    ========
</TABLE>

The Company is required to record a valuation allowance when it is more likely
than not that some portion or all of the deferred income tax assets will not be
realized. As of December 31, 1999, the valuation allowance of $8,940 was
recorded,




                                      F-13
<PAGE>   33


which increased $604 for the year ended December 31, 1999. As of December 31,
1998, a valuation allowance of $8,336 was recorded, which increased $1,240 for
the year ended December 31, 1998.

At December 31, 1999, the Company had net operating loss carryforwards, for
federal income tax purposes, of $88,729 which expire in various years between
2011 and 2018.

5.  ACCOUNTS PAYABLE AND ACCRUED EXPENSES:

The major components of accounts payable and accrued expenses as of December 31,
1999 and 1998, are as follows:

<TABLE>
<CAPTION>
                                                                                           1999        1998
                                                                                        ----------  ----------
<S>                                                                                     <C>         <C>

     Accounts payable                                                                   $   3,896   $   4,024
     Payroll and related accruals                                                           6,137       6,419
     Workers compensation and health benefit liabilities                                    8,947       6,304
     Accrued interest                                                                       5,230       5,128
     Other                                                                                  1,438       1,579
                                                                                        ---------   ---------
                                                                                         $ 25,648    $ 23,454
                                                                                        =========   =========
</TABLE>

6.  NOTES PAYABLE AND CAPITAL LEASE OBLIGATIONS:

Notes payable and capital lease obligations as of December 31, 1999 and 1998,
are as follows:

<TABLE>
<CAPTION>

                                                                                           1999        1998
                                                                                        ---------    --------
<S>                                                                                     <C>           <C>
     Notes payable                                                                        $   935     $1,375
     Capital lease obligations                                                              3,467      3,632
                                                                                          -------     ------
                                                                                            4,402      5,007

     Less-  Current portion                                                                   903        831
                                                                                          -------     ------
                                                                                          $ 3,499     $4,176
                                                                                          =======     ======
</TABLE>


Notes payable consist of several promissory notes with interest rates of 8.5%.
Future principal payments total $283 for 2000, $283 for 2001, $283 for 2002 and
$86 for 2003.

7.  DEBT AND BORROWING ARRANGEMENTS:
    --------------------------------

At December 31, 1999 and 1998, long-term debt consisted of the following:

<TABLE>
<CAPTION>
                                                                                    1999          1998
                                                                                 -----------  ------------
<S>                                                                              <C>          <C>

     Term loans                                                                  $   27,460    $   28,500
     10-1/4% Senior Notes                                                           130,000       130,000
                                                                                 ----------    ----------
                                                                                                        -
                                                                                    157,460       158,500

     Less-  Current portion                                                           9,960         5,000
                                                                                 ----------    ----------
                 Long-term debt                                                  $  147,500    $  153,500
                                                                                 ==========    ==========

</TABLE>




                                      F-14
<PAGE>   34


In 1996, in connection with the Acquisition, the Company entered into a Credit
Agreement which provided for Term Loan Commitments under Senior Secured Credit
facilities totaling $160 million, and a Revolving Loan Commitment totaling $30
million. In February 1998, the Company issued $130 million of 10-1/4% Senior
Notes due February 2008. The offering was underwritten by DLJ. The proceeds of
this offering were used to repay $120 million of the Term Loans outstanding
under the Credit Agreement. In addition, in February 1998, the Company amended
the Credit Agreement to reduce the total facility to $60 million. In March 1999,
the Company also secured a $30 million Term B Loan commitment to enable the
company to make further acquisitions. This amendment included revisions to
certain covenant requirements. In connection with the Credit Agreement, the
Company incurred administrative and commitment fees, included in interest
expense, of $183, $208, and $216 for the years ended December 31, 1999, 1998 and
1997.

Maturities of long-term debt as of December 31, 1999, are as follows:

<TABLE>
<CAPTION>
          Year
          ----
          <S>                                                                                  <C>
          2000                                                                                   $   6,000
          2001                                                                                       8,500
          2002                                                                                      12,960
          2003                                                                                           -
          2004                                                                                           -
          Thereafter                                                                               130,000
                                                                                                 ---------
                                                                                                 $ 157,460
                                                                                                 =========
</TABLE>

Interest rates are determinable under the Credit Agreement based upon certain
market "Base Rates" or LIBOR, plus an "Applicable Margin" of between 1.75% to
3.5%. The Applicable Margins for Tranche B and Tranche C loans are fixed while
those for Tranche A loans ($23,500, $28,500, and $51,000 as of December 31,
1999, 1998, and 1997, respectively), vary based, generally, on earnings
performance. The average interest rate under Term Loans in effect during the
years ended December 31, 1999, 1998 and 1997, was 9.87%, 9.80%, and 8.90%,
respectively. Interest expense on the Term Loans and the Senior Notes for the
years ended December 31, 1999, 1998 and 1997, was $15,499, $17,060, and $13,984,
respectively.

Revolving loan commitments equal an amount based upon an eligible borrowing
base, as defined, with a maximum available limit of $30 million. The loan
expires September 30, 2002, and interest rates are based on certain market "Base
Rate" or LIBOR plus a margin of between 1.75% and 3.5% (generally based on
earnings performance). At December 31, 1999 and 1998, the available borrowing
base (which is net of outstanding borrowings) was $12,654, and $16,244,
respectively. As of December 31, 1999 and 1998, amounts borrowed under the
revolving loan were $3,960 and $-0-, respectively. Any borrowings under the
revolving loan commitment in excess of $10 million must be repaid once per year,
in accordance with the Credit Agreement. Interest expense on the revolving loan
for the years ended December 31, 1999, 1998 and 1997, was $509, $100, and $119
respectively.

Substantially all assets of the Company are pledged as collateral for the Credit
Agreement. In addition, the Company is required to comply with various
affirmative and negative covenants in the Credit Agreement, including financial
covenants requiring certain levels of net worth to be maintained and the
achievement of certain financial ratios. The Company was in compliance with the
various affirmative and negative covenants at December 31, 1999.

As part of the Acquisition, the Company issued a Subordinated Note (the
Subordinated Note) to Rust International totaling $14.5 million due 2008. The
Subordinated Note was recorded at its fair value of $4.8 million, assuming an
effective interest rate of 18% per annum. On September 30, 1996, Holdings
assumed all obligations under the Subordinated Note by making a capital
contribution to the Company of $4.8 million, which is included in paid-in
capital of the Company. Because Holdings has no revenue generating activities,
other than its ownership of the Company, it is likely that the Company's cash
flows will service all or part of Holding's obligation under the Subordinated
Note. Subject to certain conditions, Holdings has the option of paying interest,
calculated annually, through the issuance of additional Subordinated Notes in
lieu of cash. Additionally, based on Holdings' financial performance, the
Subordinated Note's interest and principal payments may be delayed or
accelerated. The fair market value of the Subordinated Note is approximately
$6.2 million and $7.0 million as of December 31, 1999 and 1998, respectively. No
principal or interest cash payments were made during 1999 or 1998.





                                      F-15
<PAGE>   35



8.  LEASE OBLIGATIONS:

The Company leases a portion of its operating and office facilities under
operating leases. For the years ended December 31, 1999, 1998 and 1997, rent
expense was $1,735, $1,538, and $1,334, respectively.

The Company leases certain scaffolding equipment under capital leases. The net
book value of the scaffolding equipment under capital lease was $3,398 as of
December 31, 1999. The future minimum lease payments under noncancelable leases
as of December 31, 1999, are as follows:

<TABLE>
<CAPTION>

                                                                                          Capital     Operating
     Year                                                                                 Leases       Leases
     ----                                                                                ---------   ----------
     <S>                                                                                 <C>         <C>
     2000                                                                                  1,069        1,763
     2001                                                                                  1,069        1,640
     2002                                                                                  1,069        1,292
     2003                                                                                    858          760
     2004                                                                                      -          408
     Thereafter                                                                                -          453
                                                                                         -------      -------
                Total minimum lease payments                                               4,065      $ 6,316
                                                                                                      =======
     Less-  Imputed interest component                                                       598
                                                                                         -------
                Present value of net minimum lease payments                              $ 3,467
                                                                                         =======
</TABLE>


9.   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.

The Company has available Letter of Credit Commitments in an amount not to
exceed $15 million, of which $9,530, $8,000 and $6,751 was outstanding with a
bank at December 31, 1999, 1998 and 1997, respectively. For the years ended
December 31, 1999, 1998 and 1997, the Company paid fees related to such
commitments (included in interest expense) of $285, $216, and $134,
respectively.

10.  SENIOR EXCHANGEABLE PREFERRED STOCK:

The Company has authorized 1,250,000 shares and has issued and outstanding
1,042,460 of Senior Exchangeable Preferred Stock (the "Senior Preferred Stock").
The Senior Preferred Stock is mandatorily redeemable on March 31, 2008, at a
redemption price equal to aggregate liquidation value plus unpaid dividends. The
liquidation value of each share of Senior Preferred Stock is $25 at issuance.
Dividends are calculated quarterly on the liquidation value of such shares at
14.5% annually. For the five-year period ended September 30, 2001, such
dividends accrete on a compounded basis and increase the liquidation value.
Dividends are payable in cash subsequent to this date. For the years ended
December 31, 1999, 1998 and 1997, dividends of $5,497, $4,767, and $4,172 were
accreted. As a result, the loss attributable to common stockholders for the
years ended December 31, 1999, 1998 and 1997, was $7,360, $8,512, and $9,513,
respectively.

The Senior Preferred Stock carries no voting rights, but its holders have
certain defined rights upon certain events occurring. In the event of a change
in control of the Company, each holder of Senior Preferred Stock will have the
right to require the Company to repurchase its shares at 101% of the liquidation
value. The Company may redeem the Senior Preferred Stock at certain premiums to
the liquidation value at any time after September 30, 2001. Additionally, at the
option of the Company, the Senior Preferred Stock is exchangeable into 14.5%
Subordinated Exchange Debentures due 2008, under certain conditions.





                                      F-16
<PAGE>   36


11.  STOCKHOLDER'S EQUITY (DEFICIT):

The Company has authorized, issued and outstanding 100 shares of $.01 par common
stock. All of the common stock of the Company is owned by Holdings.

12.  PARENT COMPANY TRANSACTIONS:

Holdings has authorized 15,000,000 shares and issued and outstanding 13,383,123
shares of $.01 par common stock.

As part of the Acquisition, on September 30, 1996, Holdings and Carlisle agreed
upon a grant of options to Carlisle (the "Carlisle Options") to acquire 918,750
shares of Holdings' common stock. The Carlisle Options fall into three
categories, each with different vesting terms: time based, performance based,
and path dependent (for which vesting is contingent upon certain measurements of
the value of the Company). Substantially all of the value of the Carlisle
Options was considered a cost of the Acquisition and pushed down to the
Company's financial statements.

In 1999, 1998 and 1997, Holdings made a capital contribution to the Company of
$713, $48, and $873, respectively, representing cash and notes received by the
Company from the sale of Holdings' common stock to certain directors, officers
and employees of the Company. At December 31, 1999 and 1998 certain officers and
employees of the Company have outstanding promissory recourse notes in the
aggregate amount of $822 and $336, respectively, which were issued to the
Company as consideration for a portion of the above Holdings' common stock.
These notes earn interest at a rate between 5.22% and 7.03% and mature between
2002 and 2006. These notes are secured by 643,500 shares owned by such officers
and employees.

In 1997, the Board of Directors of Holdings approved a stock option plan for key
employees of the Company. During 1998 and 1997, Holdings granted certain
employees options to acquire 109,000 and 963,500 shares of Holding's common
stock, respectively. The options were granted with an exercise price of $1.00
per share which management believes approximated the fair value of Holdings'
common stock at the date of grant. The options vest over a maximum of ten years
and a minimum of five years provided certain performance criteria are met.
Unvested options are subject to forfeiture, upon employee termination, as
defined. Additionally, any shares acquired upon exercise are subject to
repurchase rights of the Company upon termination of employment, as defined.
Upon a change of control, as defined, all unvested options will vest. The
weighted average exercise price for the options outstanding in 1999, 1998 and
1997 is $1.00.

Stock option transactions under the plan for 1999, 1998 and 1997 are summarized
below:

<TABLE>
<CAPTION>

                                                       1999                 1998                 1997
                                                 ----------------     ----------------     ----------------
                                                 Number of Shares     Number of Shares     Number of Shares
                                                 ----------------     ----------------     ----------------
<S>                                              <C>                  <C>                  <C>
Options outstanding at beginning of year              1,013,500              963,500                    -

Options granted                                               -              109,000              963,500

Options canceled                                         98,000               59,000                    -

Options exercised                                       645,700                    -                    -
                                                      ---------            ---------              -------

Options outstanding at end of year                      269,800            1,013,500              963,500
                                                      ---------            ---------              -------

Exercisable at end of year                              160,020              364,300                  -0-
                                                      ---------            ---------              -------
</TABLE>

The Company adopted the disclosure-only provisions under SFAS 123 "Accounting
for Stock Based Compensation" ("SFAS 123"). The Company accounts for employee
stock options under APB Opinion 25, as permitted under generally accepted
accounting principles. Accordingly, no compensation cost has been recognized in
the accompanying financial statements related to these options. Had compensation
cost for these options been determined consistent with SFAS 123, the Company's
net loss would reflect the following for the year ended December 31:





                                      F-17
<PAGE>   37


<TABLE>
<CAPTION>

        Net Loss                             1999      1998       1997
        --------                           --------  --------   --------
        <S>                                <C>       <C>        <C>
        As reported                        $(1,863)  $(3,745)   $(5,341)
        Pro forma                           (1,916)   (3,786)    (5,384)

</TABLE>

The fair value of each option is estimated on the date of grant using the
Black-Scholes option pricing model with the following weighted-average
assumptions for 1998 and 1997; dividend yield of 0%, expected volatility of 0%,
risk-free interest rate of 6.5% and an expected life of seven years. The fair
value of the options granted in 1998 and 1997 was $.44 and $.45 per option,
respectively.

In accordance with the Shareholder's Agreement of Holdings, in the event any
shareholder desires to transfer any shares of Holdings to a third party prior to
September 30, 2001, such shareholders must first offer such shares to the other
shareholders. Also, certain shareholders engaged in a transfer of shares to a
third party have the right to compel the other shareholders to sell a
proportionate share of their holdings to the third party, as defined.

13.  RELATED-PARTY TRANSACTIONS:

Certain shareholders of Holdings receive a quarterly Management Advisory Fee in
return for management, advisory and other services rendered. Such fees totaled
$500, $500 and $500, for the years ended December 31, 1999, 1998 and 1997,
respectively.

In connection with the Acquisition, the Company entered into a Transitional
Services Agreement with WMIS and Rust International. In consideration of certain
services to be rendered by the Company and the licenses and preferred customer
status granted by the Company, WMIS paid to the Company $725 per quarter through
September 30, 1999 ($8.7 million in total). The Company recorded $7,438 as a
note receivable from WMIS in purchase accounting. The balance of $1,263 was
being accounted for as a reduction to the Company's operating expenses in the
period the aforementioned services are provided. For the years ended December
31, 1999 and 1998, the Company received $2,175 and $2,900, respectively. For the
years ended December 31, 1999, 1998 and 1997 operating expenses were reduced by
$0, $200 and $700, respectively. In addition, the company provides computer
support to WMIS and receives payment of $75 per month for such services.

14.  EMPLOYEE BENEFIT PLAN:

In 1997, the Company established the Brandshare 401(k) Savings Plan and Profit
Sharing Plan. Substantially all employees are eligible to participate in the
Plan. Participants may elect to defer 2% to 15% of their salary. The Company, at
its sole discretion, may make matching contributions to the Plan. For the years
ended December 31, 1999, 1998 and 1997, the Company expensed $359, $345, and
$318 respectively, for contributions to the Plan.

15.  FAIR VALUES OF FINANCIAL INSTRUMENTS:

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

Cash and Cash Equivalents - The carrying amounts approximate fair value.

Notes Receivable - The fair value of notes receivable are based on discounted
future cash flows at current interest rates.

Revolving Loan - The carrying amounts of the borrowings under the Credit
Agreement approximate their fair value because such borrowings carry variable
interest rates.

Term Loans - The carrying amounts of the term loans approximate their fair value
because such loans carry variable interest rates.

Senior Notes - The fair value of the senior notes is based on market rates
obtained from dealers.

14.5% Senior Exchangeable Preferred Stock - The liquidation approximate fair
value.





                                      F-18
<PAGE>   38



The carrying amounts and fair values of the Company's financial instruments at
December 31, 1999 and 1998, are as follows:

<TABLE>
<CAPTION>


                                                                     1999                       1998
                                                            ----------------------     ---------------------
                                                            Carrying       Fair        Carrying      Fair
                                                             Amount        Value        Amount       Value
                                                            ---------   ----------     --------    ---------
<S>                                                         <C>         <C>            <C>         <C>


     Cash and cash equivalents                               $    244     $    244     $  3,125    $   3,125
     Notes receivable                                             671          671          891          891
     Revolving loan                                             3,960        3,960            -            -
     Term loans                                                23,500       23,500       28,500       28,500
     Senior notes                                             130,000      118,300      130,000      123,500
     Notes payable and capital lease obligations                4,402        4,402        5,007        5,007
     14.5% Senior exchangeable preferred stock                 41,404       29,189       35,907       35,902

</TABLE>


16.  ACQUISITIONS:

In August 1999, the Company acquired the stock of Scaffold-Jax, Inc. for a
purchase price of $1.2 million, ($1.0 million in cash and $200 in a note to be
paid two years after closing). There was no excess cost of assets acquired over
the amounts assigned to net tangible assets at the date of acquisition.
Scaffold-Jax, Inc. is a Jacksonville, Florida based company and services both
the industrial and commercial market.

In April 1999, the Company acquired the operating assets of Philip Scaffold
Corporations ("Philip") for a purchase price of $875. Philip operates out of
Denver and Grand Junction, Colorado and is an industrial scaffold operation with
its major customers being power companies and refineries.

In October 1998, the Company acquired the operating assets of The Brook Company,
Ltd. ("Brook") for a purchase price net of cash acquired of $3.1 million ($1.7
million of cash and $1.4 million in notes payable). There was no excess cost of
assets acquired over the amounts assigned to net tangible assets at the date of
the acquisition. Brook is a New Orleans based specialty provider of temporary
structures and enclosures for the special events market

In September 1998, the Company acquired the operating assets of Scaffold Rental
and Erection ("SRE") for a purchase price net of cash acquired, of $4.2 million
($400 of cash and $3.8 million in notes payable and capital lease obligations).
The excess cost of assets acquired over the amounts assigned to net tangible
assets at the date of acquisition was $100. SRE is an Atlanta based company that
provides scaffolding services to industrial customers primarily in the
southeastern states.



17.  ACCOUNTING STANDARD NOT YET IMPLEMENTED:

In June 1998, the Financial Accounting Standards Board (FASB) issued SFAS No.
133, "Accounting for Derivative Instruments and Hedging Activities." SFAS No.
133 establishes accounting and reporting standards requiring that every
derivative instrument (including certain derivative instruments embedded in
other contracts) be recorded in the balance sheet as either an asset or
liability measured at its fair value and that changes in the derivative's fair
value be recognized currently in earnings unless specific hedge accounting
criteria are met. Special accounting for qualifying hedges allows a derivative's
gains and losses to offset related results on the hedged item in the income
statement, and requires that a company must formally document, designate, and
assess the effectiveness of transactions that receive hedge accounting. SFAS No.
133 is effective for fiscal years beginning after June 15, 2000. The Company has
not yet quantified the impacts of adopting SFAS No. 133 on its consolidated
financial statements nor has it determined the timing or method of its adoption
of SFAS No. 133. However, SFAS No. 133 could increase volatility in earnings and
other comprehensive income.





                                      F-19
<PAGE>   39
<TABLE>
<CAPTION>
Exhibit
Number                         Description
-------                        -----------
<C>  <C>  <S>
 3.1 --  Certificate of Incorporation of the Registrant(1)

 3.2 --  Certificate of Amendment of Certificate of Incorporation of the
         Registrant(1)

 3.3 --  Amended and Restated By-Laws of Brand Scaffold Services, Inc.(1)

 4.1 --  Amended and Restated Certificate of Designations,  Preferences and
         Rights of 14.5% Senior Exchangeable Preferred Stock due 2008 (the
         "Preferred Stock")(1)

 4.2 --  Amended and  Restated  Shareholders  Agreement  dated as of  September
         30,  1996,  among DLJ  Merchant Banking Partners,  L.P., DLJ
         International Partners,  C.V., DLJ Offshore Partners,  C.V., DLJ
         Merchant Banking  Funding,  Inc.,  Carlisle-Brand  Investors,  L.P.,
         Rust  Industrial  Services Inc., DLJ Brand Holdings, Inc. ("Holdings"),
         Brand Scaffold Services, Inc. and Certain Individuals(1)

 4.3 --  Stock Option Agreement dated as of March 4, 1997, between Holdings and
         Carlisle Group, L.P.(1)

 4.4 -   Indenture dated as of February 25, 1998,
         between the Company, and U.S. Trust Company of Texas, N.A., as Trustee,
         relating to the Company's 10-1/4% Senior Notes due 2008 (the
         "Notes")(1)

 4.5 -   Registration Rights Agreement, dated as of February
         25, 1998, between the Company and Donaldson Lufkin & Jenrette
         Securities Corporation ("DLJSC"), as initial purchaser, relating to the
         Notes(1)

 4.6 -   Registration Rights Agreement dated as of March 2, 1998,
         by and between the Company and DLJSC, relating to the Preferred
         Stock(1)

 4.7 --  Form of Indenture relating to the Company's 14.5% Junior Subordinated
         Exchange Debentures due 2008 (2) 5 - Opinion of Davis Polk & Wardwell,
         Counsel of the Registrant, regarding the validity of the securities
         being registered(2)

10.1 --  Credit Agreement dated as of September 30,  1996, among Brand Scaffold
         Services, Inc., the Banks party thereto, DLJ Capital, as Syndication
         Agent, and Bank of America, as Administrative Agent(1)

10.2 --  Purchase  Agreement  dated as of  February 25,  1998, by and between
         the Company and DLJSC, as initial purchaser, relating to the Notes(1)

10.3 --  The Amended and  Restated  Transaction  Agreement  dated as of
         September  18, 1996 among DLJ Merchant Banking Partners,  L.P., DLJ
         International Partners,  C.V., DLJ Offshore Partners,  C.V., DLJ
         Merchant Banking Funding,  Inc., Carlisle Enterprises,  L.P., Holdings,
         the Company,  Brand Scaffold Builders, Inc.,  Brand Scaffold  Rental &
         Erection,  Inc.  702569 Alberta Ltd.,  Rust  International  Inc., Rust
         Industrial  Services  Inc.,  Rust Scaffold  Services  Inc.,  Rust
         Scaffold  Builders  Inc.,  and Rust Scaffold & Erection Inc.(1)

10.4 --  Employment Agreement dated as of October 1, 1996, between the Company
         and John M. Monter(1)

10.5 --  Employment Agreement dated as of July 29, 1996, between the Company and
         James "Marty" McGee(1)

10.6 --  Employment Agreement dated as of July 29, 1996, between the Company and
         Ronald W. Moore(1)

10.8 --  Offer Letter dated as of March 30, 1998, between the Company and Ian R.
         Alexander(1)

  12 --  Statement  of  Computation  of Ratio of  Earnings  to  Combined  Fixed
         Charges  and  Preferred  Stock Dividends(3)

  21 --  Subsidiaries of the Registrant(1)

  24 --  Powers of Attorney

27.3 --  Financial Data Schedule
</TABLE>

(1)  Incorporated herein by reference to exhibit of the same number in the
     Registrant's Registration Statement on Form S-1, Registration Number
     333-56817.
(2)  Previously filed with the SEC
(3)  Filed herewith

                                      E-1
<PAGE>   40


                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS



To Brand Scaffold Services, Inc.:


We have audited in accordance with auditing standards generally accepted in the
United States, the financial statements of Brand Scaffold Services, Inc.
included in this Form 10-K, and have issued our report thereon dated March 10,
2000. Our audits were made for the purpose of forming an opinion on those
statements taken as a whole. Schedule II included in this Form 10-K is presented
for purposes of complying with the Securities and Exchange Commission's rules
and is not part of the basic financial statements. This schedule has been
subjected to the auditing procedures applied in our audits of the basic
financial statements and, in our opinion, fairly states in all material respects
the financial data required to be set forth therein in relation to the basic
financial statements taken as a whole.



ARTHUR ANDERSEN LLP



St. Louis, Missouri
March 10, 2000



<PAGE>   41






                 BRAND SCAFFOLD SERVICES, INC. AND SUBSIDIARIES


                SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

               FOR YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997,
                                 (In thousands)

<TABLE>
<CAPTION>
                                                                               Additions and
                                                                Balance at      Charges to                   Balance at
                                                                Beginning        Costs and                     End of
           Description                                          of Period        Expenses        Writeoffs     Period
           -----------                                          ----------     -------------     ---------   ----------
<S>                                                             <C>            <C>               <C>         <C>

December 31, 1999:
Allowance for doubtful accounts                                   $  812          $  540           $  (582)      $  770

December 31, 1998:
Allowance for doubtful accounts                                    1,000             423              (611)         812

December 31, 1997:
Allowance for doubtful accounts                                      925           1,140            (1,065)       1,000

</TABLE>