---

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

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FORM 10-Q

|ý                                                 | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 
|------------------------------------------------- | ----------------------------------------------------------------------------------------
|For the quarterly period ended September 30, 2002
|OR                                               
|o                                                 | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|Commission File No. 001-14163                    

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

|DELAWARE(State or other Jurisdiction of
Incorporation or Organization)                                        |  | 36-4087016(I.R.S. Employer
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)                                           

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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 ý No o

There
were 21,151,163 shares of Common Stock ($.01 par value) outstanding as of November 5, 2002.

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NATIONAL EQUIPMENT SERVICES, INC.
QUARTERLY REPORT ON FORM 10-Q
For the Quarter ended September 30, 2002

INDEX

|                  |         |                                                                                                                   |                                                                                       | Page
|----------------- | ------- | ----------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------- | ----
|PART I.           |         | FINANCIAL INFORMATION                                                                                             |                                                                                       | 3   
|                  | Item 1. |                                                                                                                   | Financial Statements                                                                  |     
|                  |         | Consolidated Balance Sheets at September 30, 2002 (Unaudited) and December 31, 2001                               |                                                                                       | 3   
|                  |         | Consolidated Statements of Operations for the three and nine months ended September 30, 2002 and 2001 (Unaudited) |                                                                                       | 4   
|                  |         | Consolidated Statements of Cash Flows for the nine months ended September 30, 2002 and 2001 (Unaudited)           |                                                                                       | 5   
|                  |         | Notes to Consolidated Financial Statements (Unaudited)                                                            |                                                                                       | 6   
|                  | Item 2. |                                                                                                                   | Management's Discussion and Analysis of Financial Condition and Results of Operations |     
|                  | Item 3. |                                                                                                                   | Quantitative and Qualitative Disclosures About Market Risk                            |     
|                  | Item 4. |                                                                                                                   | Controls and Procedures                                                               |     
|PART II.          |         | OTHER INFORMATION                                                                                                 |                                                                                       | 17  
|                  | Item 1. |                                                                                                                   | Legal Proceedings                                                                     |     
|                  | Item 2. |                                                                                                                   | Changes in Securities                                                                 |     
|                  | Item 3. |                                                                                                                   | Defaults upon Senior Securities                                                       |     
|                  | Item 4. |                                                                                                                   | Submission of Matters to a Vote of Security Holders                                   |     
|                  | Item 5. |                                                                                                                   | Other Information                                                                     |     
|                  | Item 6. |                                                                                                                   | Exhibits and Reports on Form 8-K                                                      |     
|SIGNATURE         |         | 18                                                                                                               
|Index of Exhibits |         | 21                                                                                                               

2

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PART I.    FINANCIAL INFORMATION

ITEM 1.    FINANCIAL STATEMENTS

NATIONAL EQUIPMENT SERVICES, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)

|                                                                         |                                                                                                | September 30, 2002                                   |          | December 31,
2001 |        
|------------------------------------------------------------------------ | ---------------------------------------------------------------------------------------------- | ---------------------------------------------------- | -------- | ----------------- | -------
|
|Assets                                                                   |                                                                                                |                                                      |          |                   |        
|                                                                         | Cash and cash equivalents                                                                      |                                                      | $        | 5,368             |        
|                                                                         | Accounts receivable, net of allowance for doubtful accounts of $7,658 and $5,844, respectively |                                                      |          | 131,299           |        
|                                                                         | Inventory, net                                                                                 |                                                      |          | 25,759            |        
|                                                                         | Rental equipment, net                                                                          |                                                      |          | 529,332           |        
|                                                                         | Property and equipment, net                                                                    |                                                      |          | 48,880            |        
|                                                                         | Intangible assets, net                                                                         |                                                      |          | 139,028           |        
|                                                                         | Loan origination costs, net                                                                    |                                                      |          | 6,437             |        
|                                                                         | Deferred income taxes                                                                          |                                                      |          |                  |        
|                                                                         | Prepaid expenses and other assets, net                                                         |                                                      |          | 12,742            |        
|                                                                         | Assets associated with discontinued operations                                                 |                                                      |          | 3,856             |        
|                                                                         |                                                                                                | Total assets                                         |          | $                 | 902,701
|Liabilities                                                              |                                                                                                |                                                      |          |                   |        
|                                                                         | Book overdraft                                                                                 |                                                      | $        | 2,806             |        
|                                                                         | Accounts payable                                                                               |                                                      |          | 26,231            |        
|                                                                         | Accrued interest                                                                               |                                                      |          | 13,968            |        
|                                                                         | Deferred income taxes, net                                                                     |                                                      |          |                  |        
|                                                                         | Accrued expenses and other liabilities                                                         |                                                      |          | 48,467            |        
|                                                                         | Debt                                                                                           |                                                      |          | 762,271           |        
|                                                                         | Liabilities associated with discontinued operations                                            |                                                      |          | 3,281             |        
|                                                                         |                                                                                                | Total liabilities                                    |          |                   | 857,024
|                                                                         | Senior redeemable convertible preferred stock                                                  |                                                      |          | 96,671            |        
|                                                                         | Commitments and contingencies                                                                  |                                                      |          |                  |        
|Stockholders' Equity                                                     |                                                                                                |                                                      |          |                   |        
|Common stock, $0.01 par, 100,000 shares authorized; 24,170 shares issued |                                                                                                |                                                      | 241      |                   |        
|Additional paid-in capital                                               |                                                                                                |                                                      | 123,887  |                   |        
|Retained earnings (accumulated deficit)                                  |                                                                                                |                                                      | (148,548 | )                 |        
|Stock subscriptions receivable                                           |                                                                                                |                                                      | (80      | )                 |        
|Treasury stock at cost, 3,019 shares                                     |                                                                                                |                                                      | (19,062  | )                 |        
|Accumulated other comprehensive loss                                     |                                                                                                |                                                      | (7,432   | )                 |        
|                                                                         |                                                                                                | Total stockholders' equity (deficit)                 |          |                   | (50,994
|                                                                         |                                                                                                | Total liabilities and stockholders' equity (deficit) |          | $                 | 902,701

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

3

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NATIONAL EQUIPMENT SERVICES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(in thousands, except per share data)

|                                                                           |                                                         | For the Three Months Ended September 30, |        | For the Nine Months Ended September 30, |        
|-------------------------------------------------------------------------- | ------------------------------------------------------- | ---------------------------------------- | ------ | --------------------------------------- | -------
|
|Revenues                                                                   |                                                         |                                          |        |                                         |        
|                                                                           | Rental revenues                                         |                                          | $      | 122,214                                 |        
|                                                                           | New equipment sales                                     |                                          |        | 11,062                                  |        
|                                                                           | Rental equipment sales                                  |                                          |        | 13,760                                  |        
|                                                                           | Parts, service and other                                |                                          |        | 24,416                                  |        
|                                                                           |                                                         | Total revenues                           |        | $                                       | 171,452
|Cost of revenues                                                           |                                                         |                                          |        |                                         |        
|                                                                           | Rental equipment depreciation                           |                                          |        | 29,576                                  |        
|                                                                           | Cost of new equipment sales                             |                                          |        | 9,519                                   |        
|                                                                           | Cost of rental equipment sales                          |                                          |        | 11,997                                  |        
|                                                                           | Other operating expenses                                |                                          |        | 72,235                                  |        
|                                                                           |                                                         | Total cost of revenues                   |        |                                         | 123,327
|Gross profit                                                               |                                                         |                                          | 48,125 |                                         |        
|Selling, general and administrative expenses                               |                                                         |                                          | 38,001 |                                         |        
|Non-rental depreciation and amortization                                   |                                                         |                                          | 2,286  |                                         |        
|Operating income                                                           |                                                         |                                          | 7,838  |                                         |        
|Other income, net                                                          |                                                         |                                          | 252    |                                         |        
|Interest expense, net                                                      |                                                         |                                          | 17,631 |                                         |        
|Income (loss) from continuing operations before income taxes               |                                                         |                                          | (9,541 | )                                       |        
|Income tax expense (benefit)                                               |                                                         |                                          |       |                                         |        
|Loss from continuing operations                                            |                                                         |                                          | (9,541 | )                                       |        
|Discontinued operations:                                                   |                                                         |                                          |        |                                         |        
|                                                                           | Income (loss) from discontinued operations, net of tax  |                                          |        |                                        |        
|                                                                           | Gain on disposal of discontinued operations, net of tax |                                          |        |                                        |        
|Income (loss) before cumulative effect of a change in accounting principle |                                                         |                                          | (9,541 | )                                       |        
|Cumulative effect of a change in accounting principle, net of tax          |                                                         |                                          |       |                                         |        
|Net income (loss)                                                          |                                                         | $                                        | (9,541 | )                                       | $      
|Other comprehensive income (loss)                                          |                                                         |                                          | 1,499  |                                         |        
|Comprehensive loss                                                         |                                                         | $                                        | (8,042 | )                                       | $      
|Basic income (loss) per common share:                                      |                                                         |                                          |        |                                         |        
|                                                                           | Continuing operations                                   |                                          | $      | (0.46                                   | )      
|                                                                           | Discontinued operations                                 |                                          |        |                                        |        
|Cumulative effect of a change in accounting principle                      |                                                         |                                          |       |                                         |        
|Net earnings (loss)                                                        |                                                         | $                                        | (0.46  | )                                       | $      
|Diluted income (loss) per common share:                                    |                                                         |                                          |        |                                         |        
|                                                                           | Continuing operations                                   |                                          | $      | (0.46                                   | )      
|                                                                           | Discontinued operations                                 |                                          |        |                                        |        
|Cumulative effect of a change in accounting principle                      |                                                         |                                          |       |                                         |        
|Net earnings (loss)                                                        |                                                         | $                                        | (0.46  | )                                       | $      
|Weighted average shares outstanding:                                       |                                                         |                                          |        |                                         |        
|                                                                           | Basic                                                   |                                          |        | 21,151                                  |        
|                                                                           | Diluted                                                 |                                          |        | 21,151                                  |        

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

4

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NATIONAL EQUIPMENT SERVICES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(in thousands)

|                                                                                |                                                       | For the Nine Months Ended September 30, |         
|------------------------------------------------------------------------------- | ----------------------------------------------------- | --------------------------------------- | --------
|
|Operating Activities:                                                           |                                                       |                                         |         
|                                                                                | Net loss                                              |                                         | $       
|Adjustments to reconcile net loss to net cash provided by operating activities: |                                                       |                                         |         
|                                                                                | Depreciation and amortization                         |                                         |         
|                                                                                | Gain on sale of discontinued operations               |                                         |         
|                                                                                | Cumulative effect of a change in accounting principle |                                         |         
|                                                                                | Gain on sale of equipment                             |                                         |         
|                                                                                | Deferred income taxes                                 |                                         |         
|                                                                                | Changes in operating assets and liabilities:          |                                         |         
|                                                                                |                                                       | Accounts receivable                     |         
|                                                                                |                                                       | Inventory                               |         
|                                                                                |                                                       | Prepaid expenses and other assets       |         
|                                                                                |                                                       | Accounts payable                        |         
|                                                                                |                                                       | Accrued expenses and other liabilities  |         
|Net cash provided by discontinued operations                                    |                                                       |                                         | 6,062   
|Net cash provided by operating activities                                       |                                                       |                                         | 37,489  
|Investing Activities:                                                           |                                                       |                                         |         
|Proceeds received from sale of discontinued operations                          |                                                       |                                         | 108,890 
|Purchases of rental equipment                                                   |                                                       |                                         | (58,778 
|Proceeds from sale of rental equipment                                          |                                                       |                                         | 30,804  
|Purchases of property and equipment                                             |                                                       |                                         | (6,150  
|Proceeds from sale of property and equipment                                    |                                                       |                                         | 1,361   
|Net cash used in discontinued operations                                        |                                                       |                                         |        
|Net cash provided by (used in) investing activities                             |                                                       |                                         | 76,127  
|Financing Activities:                                                           |                                                       |                                         |         
|Proceeds from long-term debt                                                    |                                                       |                                         | 37,000  
|Payments on long-term debt and capital leases                                   |                                                       |                                         | (143,942
|Book overdrafts                                                                 |                                                       |                                         | (5,234  
|Net cash provided by (used in) discontinued operations                          |                                                       |                                         | (271    
|Net cash used in financing activities                                           |                                                       |                                         | (112,447
|Net increase (decrease) in cash and cash equivalents                            |                                                       |                                         | 1,169   
|Cash and cash equivalents at beginning of period                                |                                                       |                                         | 4,199   
|Cash and cash equivalents at end of period                                      |                                                       | $                                       | 5,368   

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

5

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NATIONAL EQUIPMENT SERVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share data)

1.    Organization

National Equipment Services, Inc. (the "Company") is principally a holding company organized on June 4, 1996 (date of inception) under the laws of
Delaware. The Company conducts its operations through its wholly owned subsidiaries acquired since the date of inception. The Company owns and operates equipment rental, sales and service facilities
primarily located throughout the United States. The Company rents various types of equipment to a diverse customer base, including construction, petro-chemical and other industrial users. The Company
also sells new and used rental equipment and related parts, and provides other services. The nature of the Company's business is such that short-term obligations are typically met by cash
flow generated from long-term assets. Consequently, consistent with industry practice, the accompanying balance sheets are presented on an unclassified basis.

2.    Basis of presentation

GeneralThe accompanying unaudited financial statements as of and for the quarters ended September 30, 2002 and 2001
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. The December 31, 2001 consolidated balance sheet was derived from audited financial statements but does not include all of the information and footnotes
required by generally accepted accounting principles for complete financial statements. 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. Due to the
seasonality that impacts a significant portion of the Company's locations, the second and third quarters are typically the most active quarters for the Company.

Derivative InstrumentStatement of Financial Accounting Standards ("SFAS") No. 133, "Accounting for Derivative
Instruments and Hedging Activities", as amended, became effective as of January 1, 2001. Currently, the Company's only derivative is an interest rate swap used to hedge a portion of the
Company's debt and is designated as a cash flow hedging instrument. The Company's objective for holding the derivative is to minimize interest rate risks and stabilize cash flows. The derivative is
required to be recorded as an asset or liability on the consolidated balance sheet at fair value, with any changes in the fair value of the derivative recorded in other comprehensive income. As of
September 30, 2002, the derivative liability totaled $7,432 and was recorded as an accrued liability on the consolidated balance sheet.

Comprehensive IncomeStatement of Financial Accounting Standards ("SFAS") No. 130, "Reporting Comprehensive Income",
which requires comprehensive income and its components to be disclosed in the financial statements for all periods presented became effective in 1999. The only item of other comprehensive income
applicable to the Company is a change in the fair value of a derivative instrument, totaling $1,499 and $3,669 of income during the three- and nine-month periods ending
September 30, 2002.

Recently Issued Accounting StandardsIn May 2002, the FASB issued SFAS No. 145, "Rescission of FASB Statements
No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections." This Statement rescinds FASB Statement No. 4, "Reporting Gains and Losses from Extinguishment of
Debt," and an amendment of that Statement, FASB Statement No. 64, "Extinguishment of Debt Made to Satisfy Sinking-Fund Requirements." This Statement amends FASB Statement
No. 13, "Accounting for Leases," to eliminate an inconsistency between the required accounting for sale-leaseback transactions and the required accounting for certain lease
modifications that have economic effects that are similar to sale-leaseback transactions. This Statement also amends other existing authoritative pronouncements to make various technical
corrections, clarify meanings, or describe their applicability under changed conditions. The provisions of this Statement related to the recission of Statement No. 4 are effective beginning in
2003. All other provisions are effective after May 15, 2002. There will be no material effect resulting from the adoption of the Statement.

In
June 2001, the Financial Accounting Standards Board ("FASB") issued SFAS No. 141, "Business Combinations," that supersedes Accounting Principles Board ("APB") Opinion
No. 16, Business Combinations. SFAS No. 141 is effective for all business combinations initiated after June 30, 2001 and all business combinations

6

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accounted for by the purchase method for which the date of acquisition is after June 30, 2001. All business combinations under the scope of SFAS No. 141 are to be accounted for using
the purchase method. There will be no material effect resulting from the adoption of the Statement.

Also
in June 2001, the FASB issued SFAS No. 142, "Goodwill and Other Intangible Assets," that supersedes APB Opinion No. 17, Intangible Assets. SFAS No. 142
is effective for fiscal years beginning after December 15, 2001. Under this standard, goodwill is no longer amortized but subject to annual impairment tests on a reporting unit level. In the
second quarter of 2002, the Company completed a transitional impairment test on its reporting units. As a result of this test, the Company recorded an impairment charge of approximately $129,505, net
of tax benefit, as a cumulative effect of change in accounting principle retroactive to January 1, 2002.

The
effect of adopting the new standards on net income and diluted earnings per share for the three and nine months ended September 30, 2001 is as follows:

For the three Months Ended September 30,
2001

For the nine Months Ended September 30,
2001Reported net income (loss)

$
657

$
(8,920
)Plus: goodwill amortization


2,511


7,578Adjusted net income (loss)

$
3,168

$
(1,342
)Diluted earnings (loss) per share:Reported net income (loss)

$
0.02

$
(0.44
)Goodwill amortization

$
0.09

$
0.36Adjusted net income (loss)

$
0.11

$
(0.08
)


The Company's intangible asset balance at September 30, 2002 consists of $136,790 goodwill subject to annual impairment tests under SFAS 142 and
$2,238 of non-compete agreements recorded at a cost of $9,595 and amortized on a straight-line basis over five years. Accumulated amortization on these agreements was $7,357 at
September 30, 2002, and amortization expense for the nine months ended September 30, 2002 is $1,153. Amortization expense for the years ended December 31, 2002, 2003, 2004 and
2005 is estimated to be $1,556, $1,129, $624 and $82, respectively.

ReclassificationsCertain reclassifications of prior year financial statement amounts have been made to conform to the current
year reporting.

3.    Earnings per share

The Company's earnings per share for the three and nine months ended September 30, 2002 and 2001 are calculated as follows:

For the Three Months Ended September 30,

For the Nine Months Ended September 30,2002

2001

2002

2001Loss from continuing operations

$
(9,541
)
$
(112
)
$
(28,708
)
$
(8,816
)Less accretion on preferred stock


(125
)

(125
)

(375
)

(375
)Loss from continuing operations available to common stockholders

$
(9,666
)
$
(237
)
$
(29,083
)
$
(9,191
)Weighted average shares


21,151


21,151


21,151


21,151Less unvested stock





(162
)

(11
)

(227
)Basic weighted average shares


21,151


20,989


21,140


20,924Effect of dilutive securitiesUnvested stock











Convertible preferred stock











Diluted weighted average shares


21,151


20,989


21,140


20,924Basic loss per share from continuing operations

$
(0.46
)
$
(0.01
)
$
(1.37
)
$
(0.44
)Diluted loss per share from continuing operations

$
(0.46
)
$
(0.01
)
$
(1.37
)
$
(0.44
)


The effect of dilutive securities is omitted from the computation of earnings per share during periods of net loss because inclusion would be
anti-dilutive by reducing the loss per share. At September 30, 2002 and 2001, stock options totaling approximately 3,300 and 2,800, respectively, were excluded from the computation
of the

7

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diluted earnings per share because the exercise prices were greater than the average market price of the common shares.

4.    Acquisitions and Dispositions

In December 2001, the Company purchased the North American equipment rental business of Brambles U.S.A. and Brambles Canada ("Brambles"), an equipment rental
company based in Taylor, MI. The following unaudited financial information for the three and nine months ended September 30, 2001 represents the pro forma results of operations as if the
Brambles acquisition had been completed on January 1, 2001, after giving effect to certain adjustments including increased depreciation of property and equipment, interest expense for acquisition debt
and amortization of related intangibles. These pro forma results and loss per share have been prepared for comparative purposes only and do not purport to be indicative of the results of operations
that would have been achieved had this acquisition been completed as of January 1, 2001, nor are the results indicative of the Company's future results of operations.

Three Months Ended September 30,
2001

Nine Months Ended September 30,
2001Revenues

$
190,745

$
551,595Operating income


21,107


48,497Net income (loss)


2,657


(5,820
)Net income (loss) per share:Basic

$
0.12

$
(0.30
)Diluted

$
0.09

$
(0.30
)Weighed average shares outstandingBasic


20,989


20,924Diluted


28,843


20,924


On June 30, 2002, the Company sold its underground trench shoring business. The proceeds of $108,890 from the sale were used to repay existing indebtedness
under the Credit Facility. In accordance with SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets," the financial condition and results of operations of
this business are reflected herein as discontinued operations. For the period from January 1, 2002 to June 30, 2002, the trench shoring business incurred a loss of $3,409. On
June 30, 2002, the Company recognized a gain of $6,981 in conjunction with the sale.

5.    Inventory

Inventory, net consists of the following, at:

September 30, 2002

December 31, 2001New equipment

$
4,907

$
5,288Used equipment


3,153


4,512Contractor supplies


5,802


4,495Parts


15,584


17,16629,446


31,461Reserves for excess and obsolete inventory


(3,687
)

(4,676
)$
25,759

$
26,785


6.    Income Taxes

As a result of the adoption of SFAS No. 142, the Company's deferred tax assets exceeded the Company's deferred tax liabilities. The Company did not provide
any current or deferred US federal, state or foreign income tax provision or benefit during 2002 because it has recently experienced significant operating losses. The Company has provided a full
valuation allowance on the net deferred tax asset, consisting primarily of net operating loss, because of uncertainty regarding its realizability. At September 30, 2002, the valuation allowance
was $16,384.

8

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7.    Debt

The Company's Credit Facility, as amended, provides for a term loan of $70,000 and a revolving loan of $480,000. Based upon the available borrowing base (which is
based on the book value of the Company's inventory and accounts receivable and the appraised value of the Company's rental equipment) at September 30, 2002, the Company had $28,487 available on
the revolving Credit Facility loan, of which $6,875 is reserved for the interest payments on the Company's Series B Notes and Series D Notes. The Credit Facility is collateralized by
substantially all of the Company's assets and extends to July 2003.

The
available borrowing base is recomputed monthly. In the event that the book value of the Company's inventory or accounts receivable or the appraised value of the Company's rental
equipment declines without a corresponding increase in one of the other categories, the available borrowing base will be reduced accordingly. A significant reduction in the available borrowing base
would adversely affect the Company's liquidity, including its ability to pay interest on the Series B Notes and the Series D Notes when due. A failure to pay such interest when due would
result in a default under the indentures governing the Series B Notes and the Series D Notes, which would have a material adverse effect on the Company. The necessary appraisal of the
Company's rental equipment for purposes of calculating the Company's October 2002 borrowing base under the Credit Facility has not yet been finalized. The results of this appraisal could reduce
the Company's available borrowing base such that the Company would be prohibited by the Credit Facility from paying the interest due on the Series B Notes and the Series D Notes at the
end of November 2002, which would have a material adverse effect on the Company.

During
1997, the Company issued $100,000 of Senior Subordinated Notes due November 2004 (the "Series A Notes") at a discount netting proceeds of $99,000. During 1998, the Company
completed its exchange of $100,000 of Senior Subordinated Notes due November 2004, Series B (the "Series B Notes"), which have been registered for public trading, for the Series A
Notes. During 1998, the Company issued $125,000 of Senior Subordinated Notes due 2004, Series C (the "Series C Notes") at a discount netting proceeds of $122,000. During 1999, the
Company issued $50,000 of additional Series C Notes, at a discount netting proceeds of $49,000. Later during 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
Company is a holding company with no independent operations, and the Company's assets (excluding the intercompany receivables and 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. There are no restrictions on the ability of the Company to obtain funds from these subsidiaries by dividend or loan. 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.

The
Credit Facility contains certain covenants that, among other things, require the Company to satisfy certain financial tests, including tests relating to (i) the ratio of
senior debt to earnings before interest, taxes, depreciation, and amortization ("EBITDA"), (ii) minimum interest coverage ratio and (iii) the ratio of funded debt to EBITDA. In addition,
the Credit Facility and the indentures for the Series B and Series D Notes contain certain covenants that set certain limitations on the granting of liens, asset sales, additional
indebtedness, transactions with affiliates, restricted payments, investments, issuances of stock and payment of dividends.

As
of September 30, 2002, the Company was not in compliance with the leverage covenants under its Credit Facility. In October 2002, the Company amended its Credit Facility
to reduce the maximum available borrowings under the revolving credit facility from $550,000 to $480,000 and to revise certain covenants. As a result of this amendment, the Company is currently in
compliance with all covenants of the Credit Facility and the indentures governing the Series B Notes and the Series D Notes. However, the Company expects that it will not be able to
deliver the October 2002 borrowing base calculation to its lenders until after the November 15 due date required under the Credit Facility because the necessary appraisal of the
Company's rental equipment has not yet been finalized. In addition, there can be no assurance that the Company will be in compliance with all other covenants and satisfy all financial ratios and tests
under the Credit Facility in the future. Any such failure would have a material adverse effect on the Company.

9

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8.    Segment information

All operations are managed on a branch basis. The Company has two reporting segments, Traffic Safety and General Rental and Other. The Traffic Safety operations
have different contractual, regulatory and capital requirements than the General Rental and Other operations. Intersegment revenues are not material and the operating earnings of the segments do not
include interest expense (income) or income tax expense (benefit). The Company has no single customer that represents greater than 2% of the Company's consolidated revenues. Identifiable assets are
those used in the Company's operations in each segment.

The
following table presents the information for the reported segments for the quarters ended September 30:

|      |                               | Traffic Safety |   | Continuing General Rental and Other |  | Discontinued Operations |         | Consolidated
|----- | ----------------------------- | -------------- | - | ----------------------------------- |  | ----------------------- | ------- | ------------
|2002: |                               |                |   |                                     |  |                         |         |             
|      | Total revenues                |                | $ | 34,435                              |  | $                       | 137,017 |             
|      | Operating income              |                |   | 5,328                               |  |                         | 2,510   |             
|      | Identifiable assets           |                |   | 112,580                             |  |                         | 786,265 |             
|      | Depreciation and amortization |                |   | 2,889                               |  |                         | 28,973  |             
|      | Capital expenditures          |                |   | 1,593                               |  |                         | 26,143  |             
|      | Goodwill, net                 |                |   | 39,645                              |  |                         | 97,145  |             
|2001: |                               |                |   |                                     |  |                         |         |             
|      | Total revenues                |                | $ | 36,696                              |  | $                       | 111,349 |             
|      | Operating income              |                |   | 7,295                               |  |                         | 9,012   |             
|      | Identifiable assets           |                |   | 121,309                             |  |                         | 917,298 |             
|      | Depreciation and amortization |                |   | 3,366                               |  |                         | 24,781  |             
|      | Capital expenditures          |                |   | 1,554                               |  |                         | 2,579   |             
|      | Goodwill, net                 |                |   | 39,560                              |  |                         | 255,359 |             

The following table presents the information for the reported segments for the nine months ended September 30:

|      |                               | Traffic Safety |   | Continuing General Rental and Other |  | Discontinued Operations |         | Consolidated
|----- | ----------------------------- | -------------- | - | ----------------------------------- |  | ----------------------- | ------- | ------------
|2002: |                               |                |   |                                     |  |                         |         |             
|      | Total revenues                |                | $ | 79,918                              |  | $                       | 391,633 |             
|      | Operating income              |                |   | 6,471                               |  |                         | 15,647  |             
|      | Identifiable assets           |                |   | 112,580                             |  |                         | 786,265 |             
|      | Depreciation and amortization |                |   | 8,801                               |  |                         | 84,032  |             
|      | Capital expenditures          |                |   | 4,356                               |  |                         | 60,572  |             
|      | Goodwill, net                 |                |   | 39,645                              |  |                         | 97,145  |             
|2001: |                               |                |   |                                     |  |                         |         |             
|      | Total revenues                |                | $ | 83,767                              |  | $                       | 342,528 |             
|      | Operating income              |                |   | 9,344                               |  |                         | 29,553  |             
|      | Identifiable assets           |                |   | 121,309                             |  |                         | 917,298 |             
|      | Depreciation and amortization |                |   | 14,260                              |  |                         | 71,730  |             
|      | Capital expenditures          |                |   | 4,072                               |  |                         | 20,904  |             
|      | Goodwill, net                 |                |   | 39,560                              |  |                         | 255,359 |             

9.    Restructuring charge

During the fourth quarter of 2001, the Company recorded a non-recurring pre-tax restructuring charge of $1,700 related to the acquisition of Brambles. This charge
consists primarily of a reserve for lease termination and severance costs. More than 200 branch and administrative employees have been terminated in conjunction with this restructuring. The Company
also established a reserve of $8,000, which was recorded against goodwill, related

10

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to the closure of certain Brambles locations in conjunction with the purchase accounting for the acquisition (Note 4). Details of the restructuring reserve are as follows:

Balance at December 31,
2001

Utilized

Balance at September 30,
2002Lease termination costs and other facility closure costs

$
5,059

$
2,246

$
2,813Severance


4,641


2,927


1,714$
9,700

$
5,173

$
4,527


It is expected that the restructuring activities will be substantially complete by the end of the year.

11

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

The following table shows information derived from the Company's historical consolidated statements of operations as a percentage of total revenues.

|                                                                  |  | Three Months Ended September 30, |    | Nine Months Ended September 30, |  
|----------------------------------------------------------------- |  | -------------------------------- | -- | ------------------------------- | -
|
|
|Rental revenues                                                   |  | 71.3                             | %  | 74.2                            | %
|New equipment sales                                               |  | 6.5                              |    | 7.4                             |  
|Rental equipment sales                                            |  | 8.0                              |    | 3.7                             |  
|Parts, service and other                                          |  | 14.2                             |    | 14.7                            |  
|Total revenues                                                    |  | 100.0                            |    | 100.0                           |  
|Cost of revenues                                                  |  | 71.9                             |    | 65.0                            |  
|Gross margin                                                      |  | 28.1                             |    | 35.0                            |  
|Selling, general and administrative expenses                      |  | 22.2                             |    | 21.1                            |  
|Non-rental depreciation and amortization                          |  | 1.3                              |    | 2.9                             |  
|Operating income                                                  |  | 4.6                              |    | 11.0                            |  
|Other income, net                                                 |  | 0.1                              |    | 0.1                             |  
|Interest expense, net                                             |  | 10.3                             |    | 10.9                            |  
|Income (loss) before income taxes                                 |  | (5.6                             | )  | 0.2                             |  
|Income tax expense (benefit)                                      |  |                                 |    | 0.3                             |  
|Income (loss) from continuing operations                          |  | (5.6                             | )  | (0.1                            | )
|Income (loss) from discontinued operations, net of tax            |  |                                 |    | 0.5                             |  
|Gain on disposal of discontinued operations, net of tax           |  |                                 |    |                                |  
|Cumulative effect of a change in accounting principle, net of tax |  |                                 |    |                                |  
|Net income (loss)                                                 |  | (5.6                             | )% | 0.4                             | %

Results of Operations

Three and Nine Months Ended September 30, 2002 Compared with Three and Nine Months Ended September 30, 2001

Revenues

Total revenues increased to $171,452 for the three months ended September 30, 2002 from $148,045 for the three months ended September 30, 2001 and
to $471,551 for the nine months ended September 30, 2002 from $426,295 for the nine months ended September 30, 2001. Rental revenues increased to $122,214 for the three months ended
September 30, 2002 from $109,865 for the three months ended September 30, 2001 and to $343,994 for the nine months ended September 30, 2002 from $317,363 for the nine months ended
September 30, 2001. The increase in rental revenues was primarily the result of the operations acquired in conjunction with the Company's acquisition of the North American equipment rental
business of Brambles U.S.A. and Brambles Canada ("Brambles"), partially offset by a slower economy. Rental equipment sales were up $8,338 and $11,053 for the three- and nine-month periods
in 2002 as compared to the same periods in 2001. These increases are the result of a variety of fleet management techniques utilized during the year, including fleet auctions and vendor trade
packages, in an effort to improve the overall quality of the Company's fleet. New equipment sales for the three months ended September 30, 2002 were consistent with the same period in the prior
year, while parts, service and other revenues increased $2,675. New equipment sales for the nine months ended September 30, 2002 declined $3,205 from the same period in the prior year, and
parts, service and other revenue increased $10,777. Similar to the increase in rental revenues, the increase in parts, service and other revenue for the three and nine months ended
September 30, 2002, were primarily the result of the Brambles acquisition.

Total
revenues within the Company's General Rental and Other operations increased to $137,017 for the three months ended September 30, 2002 from $111,349 for the three months
ended September 30, 2001 and to $391,633 for the nine months ended September 30, 2002 from $342,528 for the nine months ended September 30, 2001 as a result of the Brambles
acquisition. Rental revenues increased 15% and 10% for the three- and nine-month periods in 2002 as compared to the same periods in 2001.

12

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Total
revenues within the Company's Traffic Safety operations decreased to $34,435 for the three months ended September 30, 2002 from $36,696 for the three months ended
September 30, 2001 and to $79,918 for the nine months ended September 30, 2002 from $83,767 for the nine months ended September 30, 2001 due to increased rental rate pressure.
Rental revenues declined 5% and 4% for the three- and nine-month periods in 2002 as compared to the same periods in 2001.

Gross Profit

Gross profit decreased to $48,125 for the three months ended September 30, 2002 from $51,864 for the three months ended September 30, 2001 and to
$137,541 for the nine months ended September 30, 2002 from $145,113 for the nine months ended September 30, 2001. Gross margins decreased to 28.1% from 35.0% and to 29.2% from 34.0%
during these respective periods. The decreases are a reflection of the declining margins earned on fleet sales in 2002 in connection with the fleet management techniques discussed above.

Gross
profit within the General Rental and Other operations declined slightly to $38,189 for the three months ended September 30, 2002 from $38,306 for the three months ended
September 30, 2001 and to $117,823 for the nine months ended September 30, 2002 from $118,067 for the nine months ended September 30, 2001. The decreases are primarily due to
increased pressure on rental rates more than offsetting the increase in revenues.

Gross
profit within the Traffic Safety operations decreased to $9,936 for the three months ended September 30, 2002 from $13,558 for the three months ended September 30,
2001 and to $19,718 for the nine months ended September 30, 2002 from $27,046 for the nine months ended September 30, 2001. The decreases are primarily due to increased pressure on
rental rates, which has depressed the segment's gross margins for both the three- and nine-periods ended September 30, 2002.

Selling, General and Administrative Expenses

Selling, general and administrative expenses increased to $38,001 for the three months ended September 30, 2002 from $31,221 for the three months ended
September 30, 2001 and to $108,251 for the nine months ended September 30, 2002 from $93,146 for the nine months ended September 30, 2001. As a percentage of total revenues,
selling, general and administrative expenses increased to 22.2% from 21.1% and to 23.0% from 21.8% during these respective periods. These increases are primarily the result of additional
infrastructure acquired in conjunction with the Brambles transaction.

Selling
general and administrative expenses for the General Rental and Other operations have increased to $33,564 for the three months ended September 30, 2002 from $26,274 for
the three months ended September 30, 2001 and to $95,500 for the nine months ended September 30, 2002 from $79,420 for the nine months ended September 30, 2001. Cost reduction
initiatives undertaken to date do not completely offset the additional infrastructure acquired with Brambles.

Selling,
general and administrative expenses for the Traffic Safety operations have declined to $4,437 for the three months ended September 30, 2002 from $4,947 for the three
months ended September 30, 2001 and to $12,751 for the nine months ended September 30, 2002 from $13,726 for the nine months ended September 30, 2001. These decreases are the
result of various cost-savings initiatives implemented during 2002 within the Traffic Safety operations.

Non-rental Depreciation and Amortization

Non-rental depreciation and amortization decreased to $2,286 for the three months ended September 30, 2002 from $4,336 for the three months
ended September 30, 2001 and to $7,172 for the nine months ended September 30, 2002 from $13,070 for the nine months ended September 30, 2001. This decrease is primarily the
result of the Company's adoption of SFAS No. 142, "Goodwill and Other Intangible Assets," in 2002, under which no amortization expense of goodwill is recorded.

Interest Expense, Net

Interest expense, net, increased to $17,631 for the three months ended September 30, 2002 from $16,081 for the three months ended September 30,
2001, but declined slightly to $51,858 for the nine months ended September 30, 2002 from $51,875 for the nine months ended September 30, 2001. The increase in interest expense, net, for
the three months ended September 30, 2002 as compared to the same period in the prior year is

13

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the result of higher average debt balances associated with continuing operations in the current year, partially offset by lower interest rates in the current year on the company's variable rate debt.

Loss from Discontinued Operations

On June 30, 2002, the Company sold its underground trench shoring business. The proceeds from the sale were used to repay existing indebtedness under the
Credit Facility. In accordance with SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets," the financial condition and results of operations of this
business are reflected herein as discontinued operations.

Gain on Disposal of Discontinued Operations

The gain on the disposal of discontinued operations reflects the gain recognized in conjunction with the sale of the underground trench shoring business discussed
above.

Cumulative Effect of a Change in Accounting Principle

The cumulative effect of a change in accounting principle reflects the charge recognized in conjunction with the adoption of SFAS No. 142, "Goodwill and
Other Intangible Assets", effective January 1, 2002.

Liquidity and Capital Resources

The Company's primary capital requirements are for purchasing new rental equipment. The Company's other capital expenditures include buying vehicles used for
delivery and maintenance, and for property, plant and equipment. The Company purchases rental equipment throughout the year to replace equipment that 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 $58,778 and $16,214 in the first nine months of 2002 and 2001, respectively.

For
the nine months ended September 30, 2002 and 2001, the Company's net cash provided by operations was $37,489 and $71,750, respectively. For the nine months ended
September 30, 2002 and 2001, the Company's net cash provided by (used in) investing activities was $76,127 and $(7,704), respectively. Net cash used for investing activities consists primarily
of purchases of rental equipment and property and equipment offset by proceeds received on the sale of discontinued operations. For the nine months ended September 30, 2002 and 2001, the
Company's net cash used in financing activities was $112,447 and $66,221, respectively. Net cash used in financing activities consists primarily of repayments of indebtedness under the Company's
credit facility.

The
Company's credit facility, as amended, provides for a $70,000 term loan and a revolving credit facility up to a maximum of $480,000 (subject to availability based on certain
financial tests including a borrowing base) to meet acquisition needs, as well as seasonal working capital and general corporate requirements. As of September 30, 2002, $494,751 was outstanding
under the credit facility. Based upon the available borrowing base (which is based on the book value of the Company's inventory and accounts receivable and the appraised value of the Company's rental
equipment) at September 30, 2002, the Company had additional availability of $28,487 on the revolving Credit Facility loan, of which $6,875 is reserved for the interest payments on the
Series B Notes and Series D Notes. The available borrowing base is recomputed monthly. In the event that the book value of the Company's inventory or accounts receivable or the appraised
value of the Company's rental equipment declines without a corresponding increase in one of the other categories, the available borrowing base will be reduced accordingly. A significant reduction in
the available borrowing base would adversely affect the Company's liquidity, including its ability to pay interest on the Series B Notes and the Series D Notes when due. A failure to pay
such interest when due would result in a default under the indentures governing the Series B Notes and the Series D Notes, which would have a material adverse effect on the Company. The
necessary appraisal of the Company's rental equipment for purposes of calculating the Company's October 2002 borrowing base under the Credit Facility has not yet been finalized. The results of
this appraisal could reduce the Company's available borrowing base such that the Company would be prohibited by the Credit Facility from paying the interest due on the Series B Notes and the
Series D Notes at the end of November 2002, which would have a material adverse effect on the Company.

The
credit facility contains certain covenants that require the Company to, among other things, satisfy certain financial tests, including tests relating to 1) the ratio of senior
debt to EBITDA, 2) minimum interest coverage ratio and 3) the ratio of funded debt to EBITDA. The credit facility also contains various other covenants that restrict the Company's
ability to, among other things, 1) incur additional indebtedness, 2) permit liens to attach to

14

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its assets, 3) pay dividends or make other restricted payments on its common stock and certain other securities and 4) make acquisitions unless certain financial conditions are
satisfied.

As
of September 30, 2002, the Company was not in compliance with the leverage covenants under its Credit Facility. In October 2002, the Company amended its Credit Facility
to reduce the maximum available borrowings under the revolving credit facility from $550,000 to $480,000 and to revise certain covenants. As a result of this amendment, the Company is currently in
compliance with all covenants of the Credit Facility and the indentures governing the Series B Notes and the Series D Notes. However, the Company expects that it will not be able to
deliver the October 2002 borrowing base calculation to its lenders until after the November 15 due date required under the Credit Facility because the necessary appraisal of the
Company's rental equipment has not yet been finalized. In addition, there can be no assurance that the Company will be in compliance with all other covenants and satisfy all financial ratios and tests
under the Credit Facility in the future. Any such failure would have a material adverse effect on the Company.

During
1997, the Company issued $100,000 of Senior Subordinated Notes due 2004 (the "Series A Notes") at a discount netting proceeds of $98,767. During 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.

During
1998, the Company issued $125,000 of Senior Subordinated Notes due 2004, Series C (the "Series C Notes") at a discount netting proceeds of $122,288. During 1999, the
Company issued $50,000 of additional Series C Notes, at a discount netting proceeds of $49,000. Later during 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
Company accretes the original issue discount of the Series B Notes and Series D Notes over the term of the notes using the effective interest rate method. The
indentures for the Series B and Series D notes contain a number of covenants that, among other things, set certain limitations on the granting of liens, asset sales, additional
indebtedness, transactions with affiliates, restricted payments, investments, issuances of stock and payment of dividends. The Company is currently in compliance with all such covenants under the
indentures.

The
Company believes that its credit facility, together with funds generated by operations and related activities, will provide the Company with sufficient liquidity and capital
resources in the near-term to finance its operations and pursue its business strategy. In the near term, the Company will need to refinance its credit facility, which becomes due and
payable in July 2003. The Company's Series B Notes and Series D Notes become due and payable in November 2004. There can be no assurance that the Company will be able to
raise the necessary capital to refinance its debt on favorable terms, and any such failure would have a material adverse effect on the Company's future financial condition and results of operations.

General Economic Conditions, Inflation and Seasonality

The Company's operating results may be adversely affected by 1) changes in general economic conditions, including changes in construction and industrial
activity, or increases in interest rates, or 2) adverse weather conditions that may temporarily decrease construction and industrial activity in a particular geographic area. Although the
Company cannot accurately anticipate the effect of inflation on its operations, management believes that inflation has not had a material impact on the Company's results of operations and is not
likely to in the foreseeable future. The Company's revenues and operating results fluctuate due to the seasonal nature of the industry in which the Company operates, with rental activity tending to be
lower in winter.

Recently Issued Accounting Pronouncements

In May 2002, the FASB issued SFAS No. 145, "Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and
Technical Corrections." This Statement rescinds FASB Statement No. 4, "Reporting Gains and Losses from Extinguishment of Debt," and an amendment of that Statement, FASB Statement No. 64,
"Extinguishment of Debt Made to Satisfy Sinking-Fund Requirements." This Statement amends FASB Statement No. 13, "Accounting for Leases," to eliminate an inconsistency between the
required accounting for sale-leaseback transactions and the required accounting for certain lease modifications that have economic effects that are similar to sale-leaseback
transactions. This Statement also amends other existing authoritative pronouncements to make various technical corrections, clarify meanings, or describe their applicability under changed conditions.
The provisions of this Statement related to the rescission of Statement No. 4 are effective

15

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beginning in 2003. All other provisions are effective after May 15, 2002. There will be no material effect resulting from the adoption of the Statement.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company's credit facility, as amended, provides the Company with a $70,000 term loan and permits the Company to borrow up to an additional $480,000 of
revolving loans 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 a specified
base rate or Eurodollar rate plus the applicable borrowing margin. At November 5, 2002, the Company had total borrowings under the credit facility of $488,900, $88,900 of which was subject to
interest rate risk. Each 100 basis point increase in interest rates on the variable rate debt would decrease pretax earnings by approximately $889.

The
Company may, from time to time, use 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. Effective April 18, 2001, the Company entered into an interest rate swap contract, which fixes the interest rate at 4.71%
on $400,000 of variable rate debt through April 17, 2003. The interest differential is paid or received on a monthly basis and recognized currently as a component of interest expense. The
counter-party to the swap is a major financial institution and management believes that the risk of incurring credit losses is remote.

ITEM 4. CONTROLS AND PROCEDURES

Explanation of disclosure controls and proceduresAfter evaluating the effectiveness of the Company's
disclosure controls and procedures (as defined in Exchange Act Rules 13a-14(c) and 15d-14(c) as of a date within 90 days of the filing date of this quarterly
report (the "Evaluation Date"), the Company's chief executive officer and chief financial officer have concluded that, as of the Evaluation Date, the Company's disclosure controls and procedures were
adequate and effective to ensure that material information relating to the Company and its subsidiaries would be made known to them by others within those entities, particularly during the period in
which this quarterly report was being prepared.

Changes in internal controlsThere were no significant changes in the Company's internal controls or in other factors that
could significantly affect the Company's disclosure controls and procedures subsequent to the Evaluation Date, nor were there any significant deficiencies or material weaknesses in such disclosure
controls and procedures requiring corrective actions. As a result, no corrective actions were taken.

Forward Looking Statements

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 judgment 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.

16

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PART II.    OTHER INFORMATION

ITEM 1.    LEGAL PROCEEDINGS

Not applicable.

ITEM 2.    CHANGES IN SECURITIES

Not applicable.

ITEM 3.    DEFAULTS UPON SENIOR SECURITIES

Not applicable.

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

Not applicable.

ITEM 5.    OTHER INFORMATION

On September 23, 2002, Mr. Joseph M. Gullion succeeded Mr. Kevin P. Rodgers as President and Chief Executive Officer of the Company.
Mr. Rodgers will continue to serve the Company as Vice-Chairman of the Board of Directors.

ITEM 6.    EXHIBITS AND REPORTS ON FORM 8-K

See Index of Exhibits on page 16. The Company filed a Current Report on Form 8-K dated July 2, 2002, to report the sale of its
trench shoring business.

17

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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 November 14, 2002.

| | NATIONAL EQUIPMENT SERVICES, INC.
| | ---------------------------------
| | By:                              

18

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Form 10-Q: For the quarter ended September 30, 2002.

CERTIFICATIONS

I, Joseph M. Gullion, certify that:

1.    I
have reviewed this quarterly report on Form 10-Q of National Equipment Services, Inc.;

2.    Based
on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the
statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3.    Based
on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial
condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4.    The
registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act
Rules 13a-14 and 15d-14) for the registrant and we have:



5.    The
registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's
board of directors (or persons performing the equivalent function):



6.    The
registrant's other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other
factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material
weaknesses.

|Date: November 14, 2002                                       |  | 
|------------------------------------------------------------- |  | 
|/s/JOSEPH M. GULLIONJoseph M. Gullion
Chief Executive Officer |  | 

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I, Michael D. Milligan, certify that:

1.    I
have reviewed this quarterly report on Form 10-Q of National Equipment Services, Inc.;

2.    Based
on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the
statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3.    Based
on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial
condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4.    The
registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act
Rules 13a-14 and 15d-14) for the registrant and we have:



5.    The
registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's
board of directors (or persons performing the equivalent function):



6.    The
registrant's other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other
factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material
weaknesses.

|Date: November 14, 2002                                           |  | 
|----------------------------------------------------------------- |  | 
|/s/MICHAEL D. MILLIGANMichael D. Milligan
Chief Financial Officer |  | 

20

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INDEX OF EXHIBITS

|Exhibit Number |  | Description of Document                                                                                                                                                                          
|-------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.1           |  | Employment Letter Agreement dated September 23, 2002, by and between the Company and Joseph M. Gullion.                                                                                          
|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.
|99.1           |  | Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                                                           
|99.2           |  | Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                                                           

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