<PAGE>

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                                 UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549

                               ----------------

                                   FORM 10-Q

  [X]          QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                    OF THE SECURITIES EXCHANGE ACT OF 1934

                 For the quarterly period ended June 30, 1999

                                      OR

  [_]      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                        SECURITIES EXCHANGE ACT OF 1934

                         Commission File No. 001-14163

                       National Equipment Services, Inc.
            (Exact name of registrant as specified in its charter)

               DELAWARE                              36-4087016
    (State or other Jurisdiction of               (I.R.S. Employer
    Incorporation or Organization)               Identification No.)

                       1603 Orrington Avenue, Suite 1600
                           Evanston, Illinois 60201
                   (Address of principal executive offices)
                                  (Zip code)

                                (847) 733-1000
             (Registrant's telephone number, including area code)

                               ----------------

  Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes [X] No [_]

  There were 24,123,387 shares of Common Stock ($.01 par value) outstanding as
of August 13, 1999.
-------------------------------------------------------------------------------
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<PAGE>

                       NATIONAL EQUIPMENT SERVICES, INC.

                         QUARTERLY REPORT ON FORM 10-Q

                             For the Quarter ended
                                 June 30, 1999

                                     INDEX
<TABLE>
<CAPTION>
                                                                           Page
                                                                          Number
                                                                          ------
 <C>     <S>                                                              <C>
 PART I. FINANCIAL INFORMATION
 Item 1.  Financial Statements
          Consolidated Balance Sheets at June 30, 1999 (Unaudited) and
          December 31, 1998 ..........................................       3
          Consolidated Statements of Operations for the three and six
          months ended June 30, 1999 and 1998 (Unaudited).............       4
          Consolidated Statements of Cash Flows for the six months
          ended June 30, 1999 and 1998 (Unaudited)....................       5
          Notes to Consolidated Financial Statements (Unaudited)......       6
 Item 2.  Management's Discussion and Analysis of Financial Condition
          and Results of Operations...................................      10
 Item 3.  Quantitative and Qualitative Disclosures About Market Risk..      12
 PART II. OTHER INFORMATION
 Item 1.  Legal Proceedings...........................................      13
 Item 2.  Changes in Securities.......................................      13
 Item 3.  Defaults upon Senior Securities.............................      13
 Item 4.  Submission of Matters to a Vote of Security Holders.........      14
 Item 5.  Other Information...........................................      14
 Item 6.  Exhibits and Reports on Form 8-K............................      14
 SIGNATURE.............................................................     15
</TABLE>

                                       2
<PAGE>

PART I.  FINANCIAL INFORMATION
  ITEM 1.  FINANCIAL STATEMENTS

                       NATIONAL EQUIPMENT SERVICES, INC.
                                AND SUBSIDIARIES

                          CONSOLIDATED BALANCE SHEETS
                     (in thousands, except per share data)

<TABLE>
<CAPTION>
                                                        June 30,   December 31,
                                                          1999         1998
                                                       ----------- ------------
                                                       (Unaudited)
<S>                                                    <C>         <C>
Assets:
 Cash and cash equivalents............................  $    478     $    344
 Accounts receivable, net of allowance for doubtful
  accounts of $2,722 and $2,590, respectively.........    73,864       53,323
 Inventory, net.......................................    21,056       15,606
 Rental equipment, net................................   481,787      378,254
 Property and equipment, net..........................    41,853       29,016
 Intangible assets, net...............................   252,711      218,959
 Loan origination costs, net..........................    10,203       10,197
 Prepaid and other assets, net........................    20,102       14,784
                                                        --------     --------
   Total assets.......................................  $902,054     $720,483
                                                        ========     ========
Liabilities and Stockholders' Equity:
 Cash overdraft.......................................  $    --      $  6,331
 Accounts payable.....................................    24,217       25,665
 Accrued interest.....................................     4,201        2,105
 Accrued expenses and other liabilities...............    43,960       35,680
 Debt.................................................   591,025      513,836
                                                        --------     --------
   Total liabilities..................................   663,403      583,617
                                                        --------     --------
Convertible preferred stock...........................    95,000          --
                                                        --------     --------
Stockholders' Equity:
Common stock, $0.01 par, 100,000 shares authorized;
 24,123 shares issued.................................       241          241
Additional paid-in capital............................   123,606      123,564
Retained earnings.....................................    19,906       13,163
Stock subscriptions receivable........................      (102)        (102)
                                                        --------     --------
   Total stockholders' equity.........................   143,651      136,866
                                                        --------     --------
   Total liabilities and stockholders' equity.........  $902,054     $720,483
                                                        ========     ========
</TABLE>


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

                                       3
<PAGE>

                       NATIONAL EQUIPMENT SERVICES, INC.
                                AND SUBSIDIARIES

               CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
                     (in thousands, except per share data)

<TABLE>
<CAPTION>
                                            For the Three       For the Six
                                             Months Ended       Months Ended
                                               June 30,           June 30,
                                           -----------------  -----------------
                                             1999     1998      1999     1998
                                           --------  -------  --------  -------
<S>                                        <C>       <C>      <C>       <C>
Revenues:
 Rental revenues.........................  $ 78,927  $30,596  $138,829  $46,411
 Rental equipment sales..................     6,397    2,370    13,289    4,112
 New equipment sales and other...........    24,519   11,164    45,257   15,758
                                           --------  -------  --------  -------
   Total revenues........................   109,843   44,130   197,375   66,281
                                           --------  -------  --------  -------
Cost of Revenues:
 Rental equipment depreciation...........    14,729    5,104    27,660    7,831
 Cost of rental equipment sales..........     4,264    1,317     8,988    2,354
 Cost of new equipment sales.............     8,094    6,294    15,707    8,481
 Other operating expenses................    34,892   13,964    61,918   21,513
                                           --------  -------  --------  -------
   Total cost of revenues................    61,979   26,679   114,273   40,179
                                           --------  -------  --------  -------
Gross profit.............................    47,864   17,451    83,102   26,102
Selling, general and administrative
 expenses................................    20,173    7,421    38,236   11,951
Non-rental depreciation and amortization.     4,272    1,262     7,573    2,069
                                           --------  -------  --------  -------
Operating income.........................    23,419    8,768    37,293   12,082
Other income, net........................       460       76       667      153
Interest expense, net....................   (13,612)  (4,936)  (26,334)  (8,036)
                                           --------  -------  --------  -------
Income before income taxes...............    10,267    3,908    11,626    4,199
Income tax expense.......................     4,312    1,583     4,883    1,734
                                           --------  -------  --------  -------
Net income...............................  $  5,955  $ 2,325  $  6,743  $ 2,465
                                           ========  =======  ========  =======
Basic earnings per common share..........  $   0.25  $  0.15  $   0.29  $  0.17
                                           ========  =======  ========  =======
Average number of common shares used in
 basic calculation.......................    23,376   15,131    23,344   14,977
                                           ========  =======  ========  =======
Diluted earnings per common share........  $   0.22  $  0.14  $   0.26  $  0.15
                                           ========  =======  ========  =======
Average number of common shares used in
 diluted calculation.....................    28,412   16,171    26,983   16,146
                                           ========  =======  ========  =======
</TABLE>


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

                                       4
<PAGE>

                       NATIONAL EQUIPMENT SERVICES, INC.
                                AND SUBSIDIARIES

               CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
                                 (in thousands)

<TABLE>
<CAPTION>
                                                              For the Six
                                                             Months Ended
                                                               June 30,
                                                           ------------------
                                                             1999      1998
                                                           --------  --------
<S>                                                        <C>       <C>
Operating Activities:
Net income................................................ $  6,743  $  2,465
Adjustments to reconcile net income to net cash provided
 by operating activities:
 Depreciation and amortization............................   35,233     9,900
 Gain on sale of rental equipment.........................   (4,301)   (1,758)
 Gain on sale of property and equipment...................      (52)      (33)
 Changes in operating assets and liabilities:
  Accounts receivable.....................................  (11,723)   (4,614)
  Inventory...............................................   (3,169)        9
  Prepaid and other assets................................   (5,360)   (2,324)
  Accounts payable........................................   (8,308)    3,778
  Accrued expenses and other liabilities..................    5,119       600
                                                           --------  --------
Net cash provided by operating activities.................   14,182     8,023
                                                           --------  --------
Investing Activities:
Net cash paid for acquisitions............................  (90,233) (110,086)
Purchases of rental equipment.............................  (98,021)  (44,629)
Proceeds from sale of rental equipment....................   13,289     4,112
Purchases of property and equipment.......................  (11,966)   (3,540)
Proceeds from sale of property and equipment..............      652        50
                                                           --------  --------
Net cash used in investing activities..................... (186,279) (154,093)
                                                           --------  --------
Financing Activities:
Proceeds from long-term debt..............................  341,000   111,484
Payments on long-term debt................................ (168,811)      --
Net proceeds from sale of common stock....................       42       (89)
Payments of loan origination costs........................      --        --
                                                           --------  --------
Net cash provided by financing activities.................  172,231   111,395
                                                           --------  --------
Net increase (decrease) in cash and cash equivalents......      134   (34,675)
Cash and cash equivalents at beginning of period..........      344    35,682
                                                           --------  --------
Cash and cash equivalents at end of period................ $    478  $  1,007
                                                           ========  ========
</TABLE>


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

                                       5
<PAGE>

                       NATIONAL EQUIPMENT SERVICES, INC.
                               AND SUBSIDIARIES

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

1. Organization

  National Equipment Services, Inc. (the "Company") was organized on June 4,
1996 under the laws of Delaware for the purpose of owning and operating
equipment rental facilities by means of acquiring existing businesses. The
Company is primarily involved in the rental of equipment to construction and
industrial users and operates from locations in 29 states.

2. Basis of presentation

  The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. Accordingly, these unaudited financial statements and
related notes should be read in conjunction with the consolidated financial
statements and notes thereto included in the Company annual report on Form 10-
K. In the opinion of management, all adjustments considered necessary for a
fair presentation, consisting only of normal recurring adjustments, have been
included. Results of operations for the interim periods are not necessarily
indicative of the results that may be expected for a full year.

3. Earnings per share

  The Company's earnings per share for the three and six months ended June 30,
1998 and 1999 is calculated as follows:
<TABLE>
<CAPTION>
                                     For the Three            For the Six
                                 Months Ended June 30,   Months Ended June 30,
                                ----------------------- -----------------------
                                   1999        1998        1999        1998
                                ----------- ----------- ----------- -----------
                                (unaudited) (unaudited) (unaudited) (unaudited)
   <S>                          <C>         <C>         <C>         <C>
   Net income..................   $5,955      $2,325      $6,743      $2,465
   Plus: interest on
    convertible debt, net of
    tax........................      174         --          348         --
                                  ------      ------      ------      ------
   Income available to
    stockholders...............   $6,129      $2,325      $7,091      $2,465
                                  ======      ======      ======      ======
   Weighted average shares
    outstanding................   24,123      16,171      24,123      16,146
     Less: unvested stock......      747       1,040         779       1,169
                                  ------      ------      ------      ------
   Basic weighted average
    shares outstanding.........   23,376      15,131      23,344      14,977

   Plus:
     Unvested stock............      747       1,040         779       1,169
     Convertible debt..........    1,414         --        1,414         --
     Convertible preferred
      stock....................    2,875         --        1,446         --
                                  ------      ------      ------      ------
   Diluted weighted average
    shares.....................   28,412      16,171      26,983      16,146
                                  ======      ======      ======      ======
   Basic EPS...................   $ 0.25      $ 0.15      $ 0.29      $ 0.17
                                  ======      ======      ======      ======
   Diluted EPS.................   $ 0.22      $ 0.14      $ 0.26      $ 0.15
                                  ======      ======      ======      ======
</TABLE>

4. Acquisitions

  As more fully disclosed in the Company's Form 10-K for the year ended
December 31, 1998, the Company completed 12 acquisitions, accounted for as
purchases, at various times during 1998. In the first six months of 1999, the
Company purchased the following rental equipment companies:

<TABLE>
<CAPTION>
      Acquisition
      Date           Company                        Location     Purchase Price
      -----------    ------------------------   ---------------- --------------
      <C>            <S>                        <C>              <C>
                     Barricade Light and
      March 1, 1999  Rental                     Phoenix, AZ         $ 9,000
      March 17, 1999 Mayer-Hammant              New Orleans, LA      26,000
      March 19, 1999 Wellesley Crane Service    Boston, MA           16,000
      April 1, 1999  Advanced Warnings, Inc.    Muskogee, OK          7,000
      April 1, 1999  The Mike Madrid Company,
                     Inc.,
                     Latshaw Traffic Servic-
                     es, Inc., and Madrid
                     Leasing Corp.              Lafayette, IN         5,750
      May 13, 1999   The Illinois operations
                     of
                     S&R Equipment Co.          Perrysburg, OH       16,300
      June 1, 1999   Elite Rentals              Mont Belvieu, TX     14,000
</TABLE>

                                       6
<PAGE>

                       NATIONAL EQUIPMENT SERVICES, INC.
                               AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                     (in thousands, except per share data)

  The following pro forma financial information represents the unaudited pro
forma results of operations as if the aforementioned 19 acquisitions had been
completed on January 1, 1998 and January 1, 1999, respectively, after giving
effect to certain adjustments including increased depreciation and
amortization of property and equipment and other assets, interest expense for
acquisition debt and amortization of related intangibles and goodwill. These
pro forma results have been prepared for comparative purposes only and do not
purport to be indicative of the results of operations which would have been
achieved had these acquisitions been completed as of these dates, nor are the
results indicative of the Company's future results of operations.

<TABLE>
<CAPTION>
                                              For the Three      For the Six
                                               Months Ended     Months Ended
                                                 June 30,         June 30,
                                             ---------------- -----------------
                                               1999    1998     1999     1998
                                             -------- ------- -------- --------
                                               (Unaudited)       (Unaudited)
      <S>                                    <C>      <C>     <C>      <C>
      Revenues.............................. $112,575 $89,921 $213,250 $163,752
      Operating income...................... $ 24,243 $17,019 $ 39,488 $ 26,245
      Net income (loss)..................... $  5,567 $ 1,194 $  5,805 $ (2,204)
      Basic earnings (loss) per share....... $   0.22 $  0.05 $   0.23 $  (0.09)
      Diluted earnings (loss) per share..... $   0.17 $  0.04 $   0.18 $  (0.09)
</TABLE>

5. Inventory

  Inventory consists of the following:

<TABLE>
<CAPTION>
                                                            June
                                                             30,    December 31,
                                                            1999        1998
                                                           -------  ------------
      <S>                                                  <C>      <C>
      New equipment....................................... $ 9,170    $ 7,431
      Parts...............................................  10,264      7,790
      Other...............................................   3,557      1,546
                                                           -------    -------
                                                            22,991     16,767
      Less: reserve.......................................  (1,935)    (1,161)
                                                           -------    -------
                                                           $21,056    $15,606
                                                           =======    =======
</TABLE>

6. Debt

  On November 20, 1997, the Company issued $100,000 of Senior Subordinated
Notes due 2004, Series A (the "Series A Notes"). In conjunction with its
initial public offering of Common Stock in July 1998, the Company entered into
a new credit facility which provides for a term facility of $100,000 and a
revolving credit facility of $300,000. On October 20, 1998, the Company
completed its exchange of $100,000 of Senior Subordinated Notes due 2004,
Series B (the "Series B Notes"), which have been registered for public
trading, for the Series A Notes.

  On September 17, 1998, the Company issued a $15,000 junior subordinated
convertible note in connection with its acquisition of all of the issued and
outstanding capital stock of Shaughnessy Crane Service, Inc. ("Shaughnessy").
The note, issued to the former stockholders of Shaughnessy, accrues interest
at a rate of 8% per annum, and the Company may prepay all or any portion of
the outstanding principal amount at any time. In addition, the holders of the
note may elect to convert the principal amount of the note, plus accrued
interest, into the number of shares of the Company's Common Stock equal to
such amount divided by $13.00. If, on September 17, 1999, the note has not
been prepaid or converted, then the outstanding principal amount of the note,
plus accrued interest, will automatically convert into a number of shares of
Common Stock having a fair market value equal to such amount.

  On December 11, 1998, the Company issued $125,000 of Senior Subordinated
Notes due 2004, Series C (the "Series C Notes"), and on January 8, 1999, the
Company issued $50,000 of additional Series C Notes.


                                       7
<PAGE>

                       NATIONAL EQUIPMENT SERVICES, INC.
                               AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                     (in thousands except per share data)
  On March 16, 1999, the Company completed its exchange of $175,000 of Senior
Subordinated Notes due 2004, Series D (the "Series D Notes"), which have been
registered for public trading, for the Series C Notes.

  The indentures for the Series B Notes and the Series D Notes and the credit
facility contain a number of covenants that, among other things, require the
Company to maintain certain financial ratios and set certain limitations on
the granting of liens, asset sales, additional indebtedness, transactions with
affiliates, restricted payments, investments and issuances of stock. The
Company is currently in compliance with all covenants of the indentures
governing the Series B Notes, the Series D Notes and the credit facility.

  The Company is a holding company with no independent operations, and the
Company's assets (excluding the common stock of its subsidiaries) are
insignificant. All of the Company's subsidiaries make full, unconditional,
joint and several guarantees of the Series B Notes and the Series D Notes, and
all of these subsidiaries are directly or indirectly wholly-owned by the
Company. The separate financial statements of each of these wholly-owned
subsidiaries are not presented as management believes that separate financial
statements and other disclosures concerning these subsidiaries are not
individually meaningful for presentation or material to investors.

7. Convertible Preferred Stock

  On May 14, 1999 and June 18, 1999, the Company issued 60,000 and 40,000
shares, respectively, of Senior Redeemable Convertible Preferred Stock, Series
A (the "Preferred Shares") for net proceeds of approximately $95,000. Each
Preferred Share is convertible at the option of the holder into a number of
shares of the Company's Common Stock equal to $1 divided by the conversion
price (the "Conversion Price") then in effect. The Conversion Price is $13.00,
subject to adjustment based upon (i) certain issuances of Common Stock at a
price per share below the then current Conversion Price and (ii) standard
anti-dilution adjustments. Each Preferred Share is convertible at the option
of the Company into a number of shares of Common Stock equal to $1 divided by
the then current Conversion Price if at any time after one year from the issue
date of the Preferred Shares the average closing market price of the Common
Stock over a 60 consecutive trading day period equals or exceeds $20.00. The
Preferred Shares are voted with the Company's Common Stock on an as converted
basis.

  Each holder of Preferred Shares will be entitled to receive dividends and
other distributions on a parity with each holder of Common Stock in an amount
equal to the dividends per share payable on the number of shares of Common
Stock into which such Preferred Shares would be convertible on the record
date. On April 30, 2009, the Company will redeem all of the shares of
Preferred Stock then outstanding, at a price per share equal to $1 plus an
amount per share equal to all declared and unpaid dividends thereon.

  If a change of control occurs, the Company will within 5 business days
thereafter offer to purchase from each holder of Preferred Shares all
outstanding Preferred Shares then held by such holder at a purchase price
equal to the greater of: (A) the amount, if any, that each holder of Preferred
Shares would be entitled to receive per share of Common Stock in connection
with the change of control if such holder had converted its Preferred Shares
and (B) $20.00 in cash per share of Common Stock assuming such holder had
converted its Preferred Shares. If a liquidation or winding-up of the Company
(other than a change of control) occurs, no distribution will be made to the
holders of shares of any class of junior stock (including Common Stock)
unless, prior thereto, the holders of Preferred Shares have received an amount
per Preferred Share equal to the greater of: (A) $1, plus all declared and
unpaid dividends and (B) the proceeds in liquidation that the holders of
Preferred Shares would have received in respect of all shares of Common Stock
issuable to such holders upon conversion.

                                       8
<PAGE>

8. Common Stock

  On June 4, 1996, in connection with the Company's formation, the Company
authorized 25 shares of Class A Common Stock (24 of which were reserved for
issuance to the Company's majority stockholder), par value $0.01, and 150
shares of Class B Common Stock (75 of which were reserved for issuance to the
Company's majority stockholder), par value $0.01. On October 28, 1997, the
authorized shares of Class A Common Stock were increased to 50.

  In connection with its initial public offering of 7,000 shares of Common
Stock on July 13, 1998, the Company exchanged all of its Class A and Class B
Common Stock for newly established Common Stock. The Class A and Class B
Common Stock was converted into an aggregate of 115 shares of newly
established Common Stock. Each share of newly established Common Stock was
then split into 0.139 shares of Common Stock. In conjunction with the July
1998 acquisitions of Falconite and R&R Rentals, the Company issued 278 and 296
shares of the Common Stock, respectively. On August 19, 1998, NES sold 375
additional shares of its Common Stock in connection with the underwriters'
exercise of their over-allotment option.

9. Subsequent events

  In August 1999, the Company amended its credit facility to increase the
available borrowings from $400,000 to $700,000. All other terms, covenants and
conditions of the credit facility are expected to remain substantially
unchanged.

  Also in July 1999, the Company completed its acquisition of the assets of
Gould & Associates, an Atlanta, Georgia based company engaged in the rental of
pumps and related accessories. In August 1999, the Company completed the
acquisition of the stock of the Plank Company ("Plank") and the stock of
Interstate Traffic Control, Inc. ("ITC"). Plank is a Houston, Texas based
trench shielding and shoring rental equipment company. ITC is a traffic safety
equipment rental company located in West Virginia. The aggregate purchase
price for these acquisitions approximated $100,000.

                                       9
<PAGE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
       RESULTS OF OPERATIONS (in thousands)

  The following table sets forth, for the periods indicated, information
derived from the combined and historical consolidated statements of operations
of the Company expressed as a percentage of total revenues.

<TABLE>
<CAPTION>
                                                                  Six Months
                                            Three Months Ended       Ended
                                                 June 30,          June 30,
                                            --------------------  ------------
                                              1999       1998     1999   1998
                                            ---------  ---------  -----  -----
<S>                                         <C>        <C>        <C>    <C>
Rental revenues............................      71.9%      69.3%  70.4%  70.0%
Rental equipment sales.....................       5.8        5.4    6.7    6.2
New equipment sales and other..............      22.3       25.3   22.9   23.8
                                            ---------  ---------  -----  -----
Total revenues.............................     100.0      100.0  100.0  100.0
Cost of revenues...........................      56.4       60.5   57.9   60.6
                                            ---------  ---------  -----  -----
Gross profit...............................      43.6       39.5   42.1   39.4
Selling, general and administrative
 expenses..................................      18.4       16.8   19.4   18.0
Non-rental depreciation and amortization...       3.9        2.8    3.8    3.2
                                            ---------  ---------  -----  -----
Operating income...........................      21.3       19.9   18.9   18.2
Other income, net..........................       0.4        0.2    0.3    0.2
Interest expense, net......................      12.4       11.2   13.3   12.1
                                            ---------  ---------  -----  -----
Income before income taxes.................       9.3        8.9    5.9    6.3
Income tax expense.........................       3.9        3.6    2.5    2.6
                                            ---------  ---------  -----  -----
Net income.................................       5.4%       5.3%   3.4%   3.7%
                                            =========  =========  =====  =====
</TABLE>

Historical Results of Operations

  The following discusses the Company's operations for the three and six
months ended June 30, 1998 and 1999 and should be read in conjunction with the
unaudited consolidated financial statements and related notes thereto of the
Company included herein and the consolidated financial statements and related
notes thereto included in the Company's 1998 Annual Report on Form 10-K.

  The Company completed twelve acquisitions during 1998, with seven completed
during the first six months of the year. Seven additional acquisitions were
completed during the first six months of 1999. The results of operations of
the businesses acquired in these acquisitions are included in the Company's
financial statements only from their respective dates of acquisition. Due to
the seasonality which impacts a significant portion of the Company's
locations, the second and third quarters of the year are typically the most
active quarters for the Company.

Results of Operations for the Three and Six Months Ended June 30, 1998 and
1999

  Revenues. Total revenues increased from $44,130 to $109,843 from the second
quarter of 1998 to the second quarter of 1999. This represents a 149%
increase, 124% of which approximates the impact of the acquisition of
additional businesses after the second quarter of 1998. The remaining 25% is
attributable to increased volume at rental locations owned for more than one
year due to the increased outsourcing demands of customers. Similarly, total
revenues increased from $66,281 to $197,375 from the six months ended June 30,
1998 to the comparable period in 1999.

  Gross Profit. Gross profit increased from $17,451 to $47,864 and from
$26,102 to $83,102 from the second quarter of 1998 to the second quarter of
1999 and from the first six months of 1998 to the first six months of 1999,
respectively. Gross profit as a percentage of total revenues increased from
39.5% to 43.6% and from 39.4% to 42.1% from the second quarter of 1998 to the
second quarter of 1999 and from the first six months of 1998 to the first six
months of 1999, respectively. This margin improvement was primarily the result
of increased rental revenues as a percentage of total revenues. Margins on
rental revenues typically exceed those earned on equipment sales.

                                      10
<PAGE>

  Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased from $7,421 to $20,173 from the second
quarter of 1998 to the second quarter of 1999 and from $11,951 to $38,236 from
the six months ended June 30, 1998 to the six months ended June 30, 1999. As a
percentage of total revenues, selling, general and administrative expenses
increased from 16.8% to 18.4% and from 18.0% to 19.4% during these respective
periods, due to additional expenses incurred in conjunction with the opening
of new branches during the end of 1998 and the beginning of 1999.

  Non-rental depreciation and amortization. Non-rental depreciation and
amortization increased from $1,262 to $4,272 from the second quarter of 1998
to the second quarter of 1999 and from $2,069 to $7,573 from the six months
ended June 30, 1998 to six months ended June 30, 1999 due primarily to
increased amortization of goodwill attributable to the acquisitions completed
during the second half of 1998 and the first six months of 1999.

  Operating income. As a result of the foregoing, operating income increased
from $8,768 to $23,419 and from $12,082 to $37,293 from the second quarter of
1998 to the second quarter of 1999 and from the first six months of 1998 to
the first six months of 1999, respectively. Operating income approximated
21.3% and 18.9% of total revenues for the three and six months ended June 30,
1999.

 Interest expense. Interest expense increased from $4,936 to $13,612 from the
second quarter of 1998 to the second quarter of 1999 and from $8,036 to
$26,334 from the six months ended June 30, 1998 to the six months ended June
30, 1999. This increase was due to additional debt necessary to complete the
Company's strategy of acquiring additional businesses.

  Income tax expense. Income tax expense increased from $1,583 to $4,312 from
the second quarter of 1998 to the second quarter of 1999 and from $1,734 to
$4,883 from the six months ended June 30, 1998 to the six months ended June
30, 1999 due to improved results of operations during the corresponding 1999
periods.

Liquidity and Capital Resources

  The Company's primary capital requirements are for the purchase of new
rental equipment fleet and for acquisitions. The Company's other capital
expenditures consist of the purchase of vehicles used for delivery and
maintenance and property, plant and equipment. The Company purchases rental
fleet throughout the year to replace equipment which has been sold as well as
to maintain adequate levels of equipment to meet existing and new customer
needs. Rental fleet purchases for the Company were $157,500 and $98,021 in
1998 and the first six months of 1999, respectively. The Company's purchases
for rental fleet are expected to be approximately $160,000 in 1999.

  For the six months ended June 30, 1998 and 1999, the Company's net cash
provided by operations was $8,023 and $14,182, respectively. For the six
months ended June 30, 1998 and 1999, the Company's net cash used in investing
activities was $154,093 and $186,279, respectively. For the six months ended
June 30, 1998 and 1999, the Company's net cash provided by financing
activities was $111,395 and $172,231, respectively. Net cash provided by
financing activities consists primarily of borrowings under the Company's
credit facility, indebtedness under the indentures relating to the Series B
and Series D Notes and proceeds from the sale of the Company's Senior
Redeemable Convertible Preferred Stock, Series A.

  In August 1999, the Company amended its credit facility, which currently
provides for a term facility to the Company of $100,000 and a revolving credit
facility to the Company for up to $600,000, subject to availability based on
certain financial tests including a borrowing base, to meet acquisition and
expansion needs as well as seasonal working capital and general corporate
requirements. As of June 30, 1999, $300,411 was outstanding under the credit
facility.

                                      11
<PAGE>

  The Company believes that its credit facility, together with funds generated
by operations, will provide the Company with sufficient liquidity and capital
resources in the near-term to finance its operations and pursue its business
strategy, including acquisitions. Over the long-term, the Company will need
additional financing to continue its acquisition strategy.

Year 2000 Software Issue

  As a part of the Company's strategic information system plan, management
selected one information system to serve as the common system platform for all
operating units. This common system platform is Year 2000 compliant. In
accordance with its plan, the Company has substantially completed the
migration of several of the Company's operating units successfully to this new
system. The Company has invested approximately $1,495 to date relating to this
migration, and management estimates only minimal future investments to
complete the conversion to this common platform. Substantially all costs
associated with this migration have been and will be capitalized. As a result
of this conversion, all operating units, transactions processing and operating
systems are expected to be Year 2000 compliant.

  The Company is also in the process of assessing the Year 2000 readiness of
its suppliers and customers. Based on available information, the Company does
not believe it faces any material exposure to significant business
interruption as a result of third party Year 2000 readiness issues. However,
to the extent that these third parties cannot provide the Company with
products, services or systems that meet Year 2000 requirements on a timely
basis, or in the event that Year 2000 issues disrupt such third parties'
demand for the Company's products or services, the Company's business, results
of operations or financial position could be materially adversely affected.

Note: This document contains forward-looking statements as encouraged by the
Private Securities Litigation Reform Act of 1995. All statements contained in
this document, other than historical information, are forward-looking
statements. These statements represent management's current judgement on what
the future holds. A variety of factors could cause business conditions and the
Company's actual results to differ materially from those expected by the
Company or expressed in the Company's forward-looking statements. These
factors include, without limitation, the Company's ability to successfully
integrate acquired businesses; changes in market price or market demand; loss
of business from customers; unanticipated expenses; changes in financial
markets; and other factors discussed in the Company's filings with the
Securities and Exchange Commission.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

  The Company's credit facility, as amended, provides the Company with
available borrowings up to $700,000 provided that certain conditions and
financial tests are met, subject to a borrowing base. Borrowings under the
credit facility bear interest, at the Company's option, at either a specified
base rate plus the applicable borrowing margin or at LIBOR plus the applicable
borrowing margin. At August 13, 1999, the Company had total borrowings under
the credit facility and the term loan of $413,000. $263,000 of which were
subject to interest rate risk. Each 1.0% increase in interest rates on the
unhedged variable rate debt would impact pretax earnings by approximately
$2,630.

  The Company uses interest rate swap contracts to hedge the impact of
interest rate fluctuations on certain variable rate debt. The Company does not
hold or issue derivative financial instruments for trading or speculative
purposes. The interest rate swap fixes the interest rate at 4.51% on $150,000
of variable rate debt through October 23, 2000. The interest differential is
paid or received on a monthly basis and recognized currently as a component of
interest expense. The counterparty to the swap is a major financial
institution and management believes that the risk of incurring credit losses
is remote.

                                      12
<PAGE>

                           PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

  Not applicable.

ITEM 2. CHANGES IN SECURITIES

  Senior Redeemable Convertible Preferred Stock, Series A. Pursuant to a
Purchase Agreement, dated April 27, 1999, between the Company and each of The
1818 Fund III, L.P., Co-Investment Partners, L.P., Erie Indemnity Company, Erie
Insurance Exchange and Aquila Limited Partnership (collectively, the
"Purchasers"), the Company issued, and the Purchasers acquired, an aggregate of
100,000 shares of the Company's new Senior Redeemable Convertible Preferred
Stock, Series A (the "Preferred Shares") in exchange for an aggregate of $100.0
million in cash, less a 5% facility fee (the "Transaction"). The Transaction
occurred in two separate phases. In the first closing on May 14, 1999, the
Company issued 60,000 Preferred Shares to the Purchasers in exchange for $60.0
million in cash, less a 5% facility fee. In the second closing on June 18,
1999, the Company issued 40,000 Preferred Shares to the Purchasers in exchange
for $40.0 million in cash, less a 5% facility fee.

  Each Preferred Share is convertible at the option of the holder into the
Company's Common Stock in accordance with a formula equal to $1,000 per share
divided by a conversion price of $13.00 per share, subject to adjustment. If,
at any time after one year from the issue date of the Preferred Shares, the
arithmetic average of the closing market price of the Company's Common Stock as
reported on the New York Stock Exchange over a 60 consecutive trading day
period equals or exceeds $20.00, subject to adjustment, the Company will have
the right, during the 60 day period after the end of such 60 day period, to
require all holders of Preferred Shares to convert all of their shares into
Common Stock according to the above formula. The Preferred Shares are voted
with the Company's Common Stock on an as converted basis. The holders of
Preferred Shares have the right to designate one member of the Board of
Directors. In connection with the first closing on May 14, 1999, the Board of
Directors appointed Lawrence C. Tucker, the designee of the holders of
Preferred Shares, to the Board.

  Each holder of Preferred Shares will be entitled to receive dividends and
other distributions on a parity with each holder of Common Stock in an amount
equal to the dividends per share payable on the number of shares of Common
Stock into which such Preferred Shares would be convertible on the record date.
On April 30, 2009, the Company will redeem all of the shares of Preferred Stock
then outstanding, at a price per share equal to $1,000 plus an amount per share
equal to all declared and unpaid dividends thereon.

  If a change of control occurs, the Company will within 5 business days
thereafter offer to purchase from each holder of Preferred Shares all
outstanding Preferred Shares then held by such holder at a purchase price equal
to the greater of: (A) the amount, if any, that each holder of Preferred Shares
would be entitled to receive per share of Common Stock in connection with the
change of control if such holder had converted its Preferred Shares and (B)
$20.00 in cash per share of Common Stock assuming such holder had converted its
Preferred Shares. If a liquidation or winding-up of the Company (other than a
change of control) occurs, no distribution will be made to the holders of
shares of any class of junior stock (including Common Stock) unless, prior
thereto, the holders of Preferred Shares have received an amount per Preferred
Share equal to the greater of: (A) $1,000, plus all declared and unpaid
dividends and (B) the proceeds in liquidation that the holders of Preferred
Shares would have received in respect of all shares of Common Stock issuable to
such holders upon conversion.

  The Preferred Shares are unregistered, and each phase of the Transaction was
exempt from registration under the Securities Act of 1933, as amended (the
"Securities Act"), pursuant to Section 4(2) of the Securities Act as a
transaction not involving any public offering. In addition to any resale
limitations imposed by the Securities Act, the Preferred Shares are subject to
certain restrictions on transfers. The Purchasers have certain rights to
require the Company to register their Preferred Shares under the Securities Act
in the future.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

  Not applicable.

                                       13
<PAGE>

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

  The Company held its annual shareholder meeting on June 17, 1999. See
Exhibit 22.1 for a report of the voting on the matters considered at the
meeting.

ITEM 5. OTHER INFORMATION

  Not applicable.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

  See Index of Exhibits. The Company did not file any Current Reports on Form
8-K for the quarterly period ended June 30, 1999.

                                      14
<PAGE>

                                   SIGNATURE

  Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized on August 16, 1999.


                                          National Equipment Services, Inc.

                                                  /s/ Dennis O'Connor
                                          By: _________________________________
                                                      Dennis O'Connor
                                                  Chief Financial Officer


Form 10-Q: For the quarter ended June 30, 1999.

                                       15
<PAGE>

                               INDEX OF EXHIBITS

<TABLE>
<CAPTION>
 Exhibit
 Number                       Description of Document
 -------                      -----------------------
 <C>     <S>                                                                <C>
 4.1     Supplemental Indenture [to November 1997 Indenture] dated as of
         April 9, 1999 by and between Barricade Light & Rental, Inc.,
         Mayer-Hammant Equipment, L.L.C., Wellesley Crane Sevice Co.,
         Inc. and Harris Trust and Savings Bank, as Trustee.
 4.2     Supplemental Indenture [to December 1998 Indenture] dated as of
         April 9, 1999 by and between Barricade Light & Rental, Inc.,
         Mayer-Hammant Equipment, L.L.C., Wellesley Crane Sevice Co.,
         Inc. and Harris Trust and Savings Bank, as Trustee.
 10.1    Amended and Restated Registration Agreement made as of June 4,
         1996, and amended and restated as of May 14, 1999, by and among
         National Equipment Services, Inc., Golder, Thoma, Cressey,
         Rauner Fund V, L.P., The 1818 Fund III, L.P., Co-Investment
         Partners, L.P., Erie Indemnity Company, Erie Insurance Exchange,
         Aquila Limited Partnership, GTCR Associates V, Rodgers
         Investment Partners, L.P., R&R Rentals, Falconite Investment
         L.P., St. Louis Travel Corp., and certain Executives and other
         persons named therein.
 11.1    Statement re Computation of Per Share Earnings. Not required
         because the relevant computations can be clearly determined from
         the material contained in the financial statements included
         herein.
 21.1    Subsidiaries of the Company.(1)
 22.1    Certificate and Report of Inspector of Election.
 27.1    Financial Data Schedule.
</TABLE>
--------
(1) Incorporated by reference to the Company's Annual Report on Form 10-K for
    the fiscal year ended December 31, 1998 (File No. 001-14163).

                                      16