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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                    FORM 10-K

       |X| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934
                   For the fiscal year ended December 31, 2000
                                       OR
     | | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

              For the transition period from _________ to_________

                        Commission file number 333-56857
                                               333-56857-01
                                               333-56857-02

                          ALLIANCE LAUNDRY SYSTEMS LLC
                          ALLIANCE LAUNDRY CORPORATION
                          ALLIANCE LAUNDRY HOLDINGS LLC
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

           DELAWARE                                     39-1927923
           DELAWARE                                     39-1928505
           DELAWARE                                     52-2055893
(STATE OR OTHER JURISDICTION OF           (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)

                                  P.O. BOX 990
                           RIPON, WISCONSIN 54971-0990
                    (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)

                                 (920) 748-3121
              (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 |_|

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. |X|
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                          Alliance Laundry Systems LLC
                       Index to Annual Report on Form 10-K
                          Year Ended December 31, 2000

                                                                            Page
                                                                            ----
           CAUTIONARY STATEMENTS FOR FORWARD-LOOKING
              INFORMATION..............................................       3

                                     PART I.
ITEM 1.    BUSINESS....................................................       3
ITEM 2.    PROPERTIES                                                        14
ITEM 3.    LEGAL PROCEEDINGS...........................................      14
ITEM 4.    SUBMISSION OF MATTERS TO A VOTE
               OF SECURITY HOLDERS.....................................      16

                                     PART II.

ITEM 5.    MARKET FOR THE REGISTRANT'S COMMON STOCK AND
               RELATED STOCKHOLDER MATTERS.............................      16
ITEM 6.    SELECTED FINANCIAL DATA.........................................  17
ITEM 7.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
              CONDITION AND RESULTS OF OPERATIONS..........................  19
ITEM 7A.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
              MARKET RISK..................................................  26
ITEM 8.    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.....................  28
ITEM 9.    DISAGREEMENTS ON ACCOUNTING AND FINANCIAL
              DISCLOSURE...................................................  63

                                    PART III.

ITEM 10.   DIRECTORS AND EXECUTIVE OFFICERS................................  63
ITEM 11.   EXECUTIVE COMPENSATION..........................................  65
ITEM 12.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
              AND MANAGEMENT...............................................  67
ITEM 13.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS..................  70

                                     PART IV.

ITEM 14.   EXHIBITS, FINANCIAL STATEMENT SCHEDULE AND
              REPORTS ON FORM 8-K..........................................  73
           INDEX TO EXHIBITS...............................................  73


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CAUTIONARY STATEMENTS FOR FORWARD-LOOKING INFORMATION

      This Annual Report includes "forward-looking statements" which appear in a
number of places in this Annual Report and include statements regarding the
intent, belief or current expectations with respect to, among other things, the
ability to borrow funds under the Senior Credit Facility, the ability to
successfully implement operating strategies, including trends affecting the
business, financial condition and results of operations. All statements other
than statements of historical facts included in this Annual Report, including,
without limitation, the statements under "Management's Discussion and Analysis
of Financial Condition and Results of Operations" and "Business," and located
elsewhere herein regarding industry prospects and the Company's financial
position are forward-looking statements. Readers are cautioned not to place
undue reliance on these forward-looking statements, which speak only as of the
date hereof. Although the Company believes that the expectations reflected in
such forward-looking statements are reasonable, they can give no assurance that
such expectations will prove to have been correct.

                                     PART I.

ITEM 1. BUSINESS

Introduction

      As used in this Annual Report, unless the context requires otherwise,
references to "Alliance" or the "Company" (i) with respect to periods prior to
the Merger (as defined below) refer to Alliance Laundry Holdings LLC (the
"Parent," formerly known as Raytheon Commercial Laundry LLC prior to the Merger)
and its predecessors and subsidiaries, (ii) with respect to periods subsequent
to the Merger, refer collectively to Alliance Laundry Systems LLC and its
subsidiaries and (iii) when used with regard to financial data refer to the
consolidated financial results of Alliance Laundry Holdings LLC and Alliance
Laundry Systems LLC. As used herein, the term "stand alone commercial laundry
equipment" refers to commercial laundry equipment excluding drycleaning
equipment and custom engineered, continuous process laundry systems and the term
"stand alone commercial laundry industry" includes laundromats, multi-housing
laundries and on-premise laundries and excludes drycleaners and continuous
process laundries.

      On May 5, 1998, pursuant to an Agreement and Plan of Merger ("Merger
Agreement") among Bain/RCL, L.L.C., a Delaware limited liability company ("Bain
LLC"), RCL Acquisitions LLC ("MergeCo"), the Parent and Raytheon Company
("Raytheon"), MergeCo was merged with and into the Parent (the "Merger") with
the Parent being the surviving entity. Prior to the Merger, Raytheon owned 100%
of the equity securities of the Parent, and Bain LLC, the BRS Investors (as
defined below), and certain members of senior management (the "Management
Investors") of the Parent owned 100% of the equity securities of MergeCo. As a
result of the Merger, Bain LLC, the BRS Investors and the Management Investors
acquired 93% of the common equity of the Parent. Simultaneous with the
consummation of the Merger, the Parent contributed substantially all of its
assets and liabilities to the Company. Immediately after the consummation of the
Merger, the Company became the only direct subsidiary of the Parent and
succeeded to substantially all of the assets and liabilities of the Parent.

      Alliance is the leading designer, manufacturer and marketer of stand alone
commercial laundry equipment in North America and a leader worldwide. Under the
well-known brand names of Speed Queen, UniMac and Huebsch, the Company produces
a full line of commercial washing machines and dryers with load capacities from
16 to 250 pounds. The Company believes it has had the leading market


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share in the North American stand alone commercial laundry equipment industry
for the last five years and has increased its market share from approximately
35% in 1995 to 37% in 2000. The Company attributes its industry leading position
to: (i) the quality, reliability and functionality of its products; (ii) the
breadth of its product offerings; (iii) its extensive distributor network and
strategic alliances with key customers; and (iv) its investment in new product
development and manufacturing capabilities. As a result of its market
leadership, the Company has an installed base of equipment that it believes is
the largest in the industry and that generates significant recurring sales of
replacement equipment and service parts. In addition to stand alone commercial
laundry equipment, the Company also offers presses and finishing equipment used
in the drycleaning segment under the Ajax name (acquired March, 2000).
Internationally, the Company has developed targeted opportunities, generating
revenue of $35.5 million, $36.8 million and $37.7 million in 2000, 1999 and
1998, respectively. In addition, pursuant to an agreement which concluded
September 17, 1999, the Company supplied consumer washing machines to Amana
Company, L.P. ("Appliance Co.") for sale at retail. For 2000, 1999 and 1998 the
Company generated net revenues of $265.4 million, $314.4 million and $331.7
million and EBITDA (as defined in Item 6 - Selected Financial Data) of $46.0
million, $51.0 million and $44.2 million, respectively.

      The Company believes it has developed the most extensive distribution
networks to each of the three distinct customer groups within the North American
stand alone commercial laundry equipment industry: (i) laundromats; (ii)
multi-housing laundries, consisting primarily of common laundry facilities in
apartment buildings, universities and military installations; and (iii)
on-premise laundries, consisting primarily of in-house laundry facilities in
hotels, hospitals, nursing homes and prisons. The Company estimates that in over
80% of the North American market its laundromat and on-premise laundry
distributors are either the number one or number two distributor for their
respective selling regions. In addition, the Company's in-house sales force has
developed superior relationships with leading route operators that own, install
and maintain commercial laundry equipment in multi-housing laundries, a critical
factor in enabling the Company to grow its market share. Internationally, the
Company sells its laundry equipment through distributors and to retailers.

      With an investment of over $68.0 million since 1996, the Company has
substantially completed the development of many new products, the redesign of
existing products and the modernization of its manufacturing facilities in
Wisconsin and Florida. The Company believes its considerable investment in its
product line and manufacturing capabilities has strengthened and will continue
to enhance its market leadership position.

      Alliance Laundry Corporation ("ALC") is a wholly owned subsidiary of
Alliance that was incorporated for the sole purpose of serving as a co-issuer of
the Series B 9 5/8% Senior Subordinated Notes (the "Notes") in order to
facilitate the Note offering. ALC does not have any substantial operations or
assets of any kind and will not have any revenue.

Company Strengths

      Market Leader with Significant Installed Base. The Company believes it led
the North American industry in sales to all customer groups, with a 37% market
share overall in 2000. As a result of its leading market position, the Company
has achieved superior brand recognition and extensive distribution capabilities.
The Company's market position has also allowed it to establish what it believes
to be the largest installed base in its industry, which generates a significant
level of recurring sales of replacement equipment and service parts and provides
a platform for revenue growth.

      Industry-leading Product Offering. The Company believes its product line
leads the industry in reliability, breadth of offerings, functionality and
advanced features. Its development team of more than


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80 engineers and technical personnel, together with its marketing and sales
personnel, work with the Company's major customers to redesign and enhance the
Company's products to better meet customer needs. For example, the Company's new
products emphasize efficiency and new technology, facilitating ease of use as
well as improving performance and reliability. In addition, the Company believes
it is the only manufacturer in North America to produce a full product line
(including topload washers, dryers, frontload washers, washer-extractors and
tumbler dryers for all customer groups), thereby providing customers with a
single source for all their stand alone commercial laundry equipment needs.

      Extensive and Loyal Distribution Networks. The Company believes it has
developed the industry's most extensive North American distribution networks.
The Company estimates its distributors are either the number one or number two
distributor for their respective selling regions in over 80% of the North
American market. Most of the Company's distributors have been customers for over
ten years. In addition, through its in-house sales force the Company has
developed excellent relationships with industry-leading route operators, who are
direct customers of the Company. The Company believes its strong relationships
with its customers are based, in part, on the quality, breadth and performance
of its products and on its comprehensive value-added services.

      Leading National Brands. The Company markets and sells its products under
the widely recognized brand names Speed Queen, UniMac, Huebsch and Ajax. A
survey commissioned by the Company in 1993 of more than 1,000 commercial laundry
distributors and end-users ranked Speed Queen as the leader in terms of brand
awareness and as an industry leader for quality and reliability. In the same
study, UniMac was ranked a leading brand in the stand alone on-premise laundry
industry; Huebsch and Speed Queen ranked first and second, respectively, in
customer satisfaction. In addition, in a survey of the drycleaning industry
commissioned in 1996 of more than 1,000 drycleaners, Ajax ranked as the leader
in terms of brand awareness.

      Strong and Incentivized Management Team. Led by Chief Executive Officer
Thomas L'Esperance, the Company believes it has assembled the strongest
management team in the commercial laundry equipment industry. The Company's
seven executive officers have over 97 years of combined experience in the
commercial laundry equipment and appliance industries. This management team has
executed numerous strategic initiatives, including: (i) ongoing refinements to
its product offerings; (ii) the development of strategic alliances with key
customers; (iii) the implementation of manufacturing cost reduction and quality
improvement programs; and (iv) the acquisitions and successful integration of
the commercial washer-extractor business of the UniMac Company ("UniMac") and
the press and finishing equipment business of American Laundry Machinery Inc.
("Ajax"). In addition, management owns approximately 17% of the Company's common
units on a diluted basis.

Business Strategy

      The Company's strategy is to achieve profitable growth by offering a full
line of the most reliable and functional stand alone commercial laundry
equipment and pressing and finishing equipment, along with comprehensive
value-added services. The key elements of the Company's strategy are as follows:

      Offer Full Line of Superior Products and Services. The Company seeks to
satisfy all of a customer's stand alone commercial laundry equipment and
pressing and finishing equipment needs with its full line of products and
services. The Company seeks to compete with other manufacturers in the
commercial laundry equipment industry by introducing new products, features and
value-added services tailored to meet evolving customer requirements. In 1999,
for example, the Company introduced a new line of small-chassis frontload
washers, offering multi-housing laundries increased water and energy efficiency.
In addition, in late 2000, the Company introduced its NetMaster(TM) system of
technologically


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advanced laundry products offering multi-housing and laundromat operators more
flexibility and accountability. Now operators can program vend prices, cycle
times, rinse options and cycle selections from a remote site while auditing
machine operation.

      Develop and Strengthen Alliances with Key Customers. The Company has
developed and will continue to pursue long-term alliances and multi-year supply
agreements with key customers. For example, the Company is the predominant
supplier of new laundry equipment to Coinmach Corporation ("Coinmach"), the
largest and fastest growing operator of multi-housing laundries in North
America.

      Continuously Improve Manufacturing Operations. The Company seeks to
continuously enhance its product quality and reduce costs through refinements to
manufacturing processes. The Company achieves such improvements through
collaboration among key customers, suppliers and its engineering and marketing
personnel. Since 1995, the Company has progressively reduced manufacturing costs
through improvements in raw material usage and labor efficiency, among other
factors.

Industry Overview

      The Company estimates that North American stand alone commercial laundry
equipment sales were approximately $485.0 million in 2000, of which the
Company's equipment revenue represented approximately $181.0 million. The
Company believes that North American sales of stand alone commercial laundry
equipment have grown at a compound annual rate of approximately 2.2% since 1993.
North American commercial laundry equipment sales historically have been
relatively insulated from business and economic cycles, given that economic
conditions do not tend to affect the frequency of use, or replacement, of
laundry equipment. Management believes industry growth will be sustained by
continued population expansion and by customers increasingly "trading up" to
equipment with enhanced functionality, raising average selling prices.

      Manufacturers of stand alone commercial laundry equipment compete on their
ability to satisfy several customer criteria, including: (i) equipment
reliability and durability; (ii) performance criteria such as water and energy
efficiency, load capacity and ease of use; (iii) availability of innovative
technologies such as cashless payment systems and advanced electronic controls,
which improve ease of use and management audit capabilities; and (iv) supply of
value-added services such as rapid spare parts delivery, equipment financing and
computer aided assistance in the design of commercial laundries.

      Outside of the stand alone commercial laundry equipment market, the
Company does not participate in manufacturing or selling commercial custom
engineered, continuous process laundry systems. Until its March 6, 2000
acquisition of the Ajax press and finishing equipment line (see Note 4 -
Acquisition of Ajax Product Line), the Company offered only shirt laundering,
wetcleaning and drying equipment to the commercial drycleaning equipment market.
The dry cleaning and continuous process laundry system segments are distinct
from the stand alone commercial laundry equipment segment, employing different
technologies and serving different customer groups.

      Customer Categories. Each of the stand alone commercial laundry equipment
industry's three primary customer groups, laundromat operators, multi-housing
laundry operators and on-premise laundry operators, is served through a
different distribution channel and has different requirements with respect to
equipment load capacity, performance and sophistication. For example, equipment
purchased by multi-housing route operators is most similar to consumer machines
sold at retail, while equipment purchased by laundromats and on-premise
laundries has greater durability, delivers increased capacity and provides
superior cleaning and drying capabilities.


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      Laundromats. Management estimates that laundromats accounted for
approximately 53% of North American stand alone commercial laundry equipment
sales in 2000. These approximately 35,000 facilities typically provide walk-in,
self-service washing and drying. Laundromats primarily purchase commercial
topload washers, washer-extractors and tumblers. Washer-extractors and tumblers
are larger-capacity, higher-performance washing machines and dryers,
respectively. Laundromats have historically been owned and operated by sole
proprietors. Laundromat owners typically rely on distributors to provide
equipment, technical and repair support and broader business services. For
example, distributors may host seminars for potential laundry proprietors on
laundromat investment opportunities. Independent proprietors also look to
distributors and manufacturers for equipment financing. Given the laundromat
owner's reliance on the services of its local distributor, the Company believes
that a strong distributor network in local markets can differentiate
manufacturers in serving this customer group.

      In addition to distributor relationships, the Company believes laundromat
owners choose among different manufacturers' products based on, among other
things: (i) availability of equipment financing; (ii) reputation, reliability
and ease and cost of repair; (iii) the water and energy efficiency of the
products (approximately 22% to 25% of annual gross wash and dry revenue of
laundromats is consumed by utility costs, according to the Coin Laundry
Association ("CLA")); and (iv) the efficient use of physical space in the store
(since 15% to 20% of annual gross revenue of laundromats is expended for rent
according to the CLA).

      Multi-housing Laundries. Management believes that multi-housing laundries
accounted for approximately 25% of North American stand alone commercial laundry
equipment sales in 2000. These laundries include common laundry facilities in
multi-family apartment and condominium complexes, universities and military
installations.

      Most products sold to multi-housing laundries are small-chassis topload
and frontload washers and small-chassis dryers similar in appearance to those
sold at retail to the consumer market but offering a variety of enhanced
durability and performance features. For example, topload washers sold to
multi-housing laundries typically last up to 12,000 cycles, approximately twice
as long as the expected life of a consumer machine.

      Multi-housing laundries are managed primarily by route operators who
purchase, install and service the equipment under contract with building
management. Route operators pay rent (which may include a portion of the
laundry's revenue) to building management. Route operators are typically direct
customers of commercial laundry equipment manufacturers such as the Company and
tend to maintain their own service and technical staffs. Route operators compete
for long-term contracts on the basis of, among other things: (i) the reputation
and durability of their equipment; (ii) the level of maintenance and quality of
repair service; (iii) the ability of building management to audit laundry
equipment revenue; and (iv) the water and energy efficiency of products.

      The Company believes reliability and durability are key criteria for route
operators in selecting equipment, as they seek to minimize the cost of repairs.
The Company also believes route operators prefer water and energy efficient
equipment that offers enhanced electronic monitoring and tracking features
demanded by building management companies. Given their investments in spare
parts inventories and in technician training, route operators are reluctant to
change equipment suppliers. Therefore, the Company believes an installed base
gives a commercial laundry equipment manufacturer a competitive advantage.


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      On-premise Laundries. Management believes that on-premise laundries
accounted for approximately 22% of North American stand alone commercial laundry
equipment sales in 2000. On-premise commercial laundries are located at a wide
variety of businesses that wash or process textiles or laundry in large
quantities, such as hotels and motels, hospitals, nursing homes, sports
facilities, car washes and prisons.

      Most products sold to on-premise laundries are washer-extractors and
tumbler dryers, primarily in larger capacities up to 250 pounds. These machines
process significantly larger loads of textiles and garments in shorter times
than equipment typically sold to laundromats or multi-housing customer groups.
Effective and rapid washing (i.e., reduced cycle time) of hotel sheets, for
example, reduces both a hotel's linen requirements and labor costs of washing
and drying linens. The Company believes that in a typical hotel on-premise
laundry, up to 50% of the cost of operations is labor.

      On-premise laundries typically purchase equipment through a distributor
who provides a range of selling and repair services on behalf of manufacturers.
As with laundromats, the Company believes a strong distributor network is a
critical element of sales success. On-premise laundries select their equipment
based on the availability of specified product features, including, among other
things: (i) reputation and reliability of products; (ii) load capacity and cycle
time; (iii) water and energy efficiency; and (iv) ease of use. In addition, the
availability of technical support and service is important in an on-premise
laundry operator's selection of an equipment supplier.

      Drycleaning. Management estimates that North American drycleaning
equipment sales were approximately $205.0 million in 2000. The approximately
34,000 drycleaners in North America provide full-service drycleaning and
wetcleaning for households. This service includes stain removal, pressing,
finishing and packaging. In addition, many commercial drycleaners provide
laundry services for water-washable garments, rug cleaning services, and minor
alteration and repair services.

      Drycleaners primarily purchase drycleaning machines, presses and finishing
equipment, washer-extractors and small-chassis topload washers and dryers.
Drycleaners primarily include independently operated neighborhood cleaners,
franchises and specialty cleaners. Drycleaners typically rely on distributors
and chemical supply companies to provide equipment, detergents, stain removers,
technical support and broader business services. For example, distributors and
chemical suppliers provide training seminars on the proper use of equipment and
chemicals for cleaning, stain removal and garment finishing.

      As with laundromats and on-premise laundries, drycleaners typically
purchase equipment through a distributor who can provide service parts, repair
service and technical support. Drycleaners select their equipment based on the
availability of specified product features, including, among other things: (i)
reputation and reliability; (ii) load capacity and cycle time; (iii) ease of use
and (iv) solvent and energy efficiency.

Trends and Characteristics

      Growth Drivers. The Company believes that continued population expansion
in North America has and will drive steady demand for garment and textile
laundering by all customer groups purchasing commercial laundry equipment. The
Company believes population growth has historically supported replacement and
some modest growth in the installed base of commercial laundry equipment.
According to the U.S. Census Bureau, the United States population has grown at a
compound annual rate of 1.0% since 1989 and is projected to grow at
approximately 0.9% per year on average over the next ten years.


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      In addition, customers are increasingly "trading up" to equipment with
enhanced functionality, raising average selling prices. For example, the larger
national and regional customers in the laundromat and multi-housing customer
groups are more likely to take advantage of recently available electronic
features, which the Company believes provide such customers with a competitive
advantage. Moreover, customers are moving towards equipment with increased water
and energy efficiency as the result of government and consumer pressure and a
focus on operating cost containment.

      Limited Cyclicality. North American commercial laundry equipment sales
historically have been relatively insulated from business and economic cycles
because economic conditions do not tend to affect the frequency of use, or
replacement, of laundry equipment. Management believes industry growth will be
sustained by continued population expansion and by customers increasingly
"trading up" to equipment with enhanced functionality, raising average selling
prices. Under all economic conditions, owners of commercial laundries typically
delay equipment replacement until such equipment can no longer be economically
repaired or until competition forces the owner to upgrade such equipment to
provide improved appearance or functionality. The economic life of such
equipment and thus timing of replacement of such equipment are also generally
unaffected by economic conditions; the economic life of stand alone commercial
laundry equipment is generally 7-14 years.

      International Growth. The Company anticipates growth in demand for
commercial laundry equipment in international markets, especially in developing
countries where laundry needs are far less sophisticated than in North America.

      Reducing Customer Operating Costs. The time required to wash and dry a
given load of laundry (i.e., cycle time) has a significant impact on the
economics of a commercial laundry operation. Accordingly, commercial laundry
equipment manufacturers produce equipment that provides progressively shorter
cycle times through improved technology and product innovation. This shorter
cycle time decreases labor costs and increases the volume of laundry that can be
processed in a given time period. Examples of methods of reducing cycle time
are: (i) shortening fill, drain and wash times; and (ii) decreasing water
extraction time by increasing spin rate.

Products

      Overview. The Company offers a full line of stand alone commercial laundry
washers and dryers, with service parts and value-added services supporting its
products, under the Speed Queen, Huebsch and UniMac brands throughout North
America and in over sixty foreign countries. Additionally, the Company offers
presses and finishing equipment under the Ajax brand. The Company's products
range from small washers and dryers primarily for use in laundromats and
multi-housing laundry rooms to large laundry equipment with load capacities of
up to 250 pounds used in on-premise laundries. The Company also benefits from
domestic and international sales of service parts for its large installed base
of commercial laundry equipment. Internationally, the Company also sells laundry
equipment under private label brands.

      Washers. Washers represented approximately 50% of 2000 net revenues and
include washer-extractors, topload washers and frontload washers.

      Washer-Extractors. The Company manufactures washer-extractors, its largest
washer products, to process from 18 to 250 pounds of laundry per load.
Washer-extractors extract water from laundry with spin speeds that produce over
300g's of centrifugal force, thereby reducing the time and energy costs for the
drying cycle. Sold primarily under the Speed Queen, UniMac and Huebsch brands,
these


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products represented approximately 28% of 2000 net revenues. Washer-extractors
that process up to 80 pounds of laundry per load are sold to laundromats, and
washer-extractors that process up to 250 pounds of laundry per load are sold to
on-premises laundries. Washer-extractors are built to be extremely durable to
handle the enormous g-force generated by spinning several hundred pounds of
water-soaked laundry. Also, the equipment is in constant use and must be durable
to avoid a high cost of failure to the user.

      In late 1998 the Company introduced its new Water Saving System line of
washer-extractors for on-premise laundries. This new line of washer-extractors
is designed to obtain up to 32% reduction in water consumption for some
applications. The system will also provide substantial reduction in sewer costs,
detergent and energy usage for some operators.

      Topload Washers. Topload washers are small-chassis washers with the
capability to process up to 18 pounds of laundry per load with spin speeds that
produce up to 150g's. Sold primarily to multi-housing laundries and laundromats
under the Speed Queen and Huebsch brands, these products represented
approximately 19% of 2000 net revenues.

      In 1997, the Company introduced its Automatic Balance System ("ABS"),
which it believes provides the industry-leading out-of-balance handling. New
topload washers with ABS deliver higher g-force, reducing moisture left in the
laundry, thereby reducing drying time and energy usage.

      In late 2000, the Company introduced its NetMaster(TM) system of
technologically advanced laundry products offering multi-housing and laundromat
operators more business flexibility and accountability. Now operators can
program vend prices, cycle times, rinse options and cycle selections from a
remote site while auditing machine operation.

      Frontload Washers. In 1999, the Company introduced a new small-chassis
frontload washer with the capability to process up to 18 pounds of laundry per
load. Frontload washers are sold under the Speed Queen and Huebsch brands to
laundromat and multi-housing customers. The frontload washer's advanced design
uses 28% less water compared to commercial topload washers. Furthermore,
decreased usage of hot water and superior water extraction in the high g-force
spin cycle reduce energy consumption. This new frontload washer is available
with front controls (front accessibility complies with Americans with
Disabilities Act regulations) and can be purchased with a matching small-chassis
dryer (single or stacked).

      Dryers. Dryers represented approximately 31% of 2000 net revenues and
include tumbler dryers, standard dryers and stacked dryers. The Company also
sells a new line of stacked combination frontload washers and dryers.

      Tumbler Dryers. Tumblers are very large dryers with the capability of
drying up to 170 pounds of laundry per load. Tumblers represented approximately
20% of 2000 net revenues. Tumblers are sold primarily to laundromats and
on-premise laundries under all four of the Company's brands. The Company's new
tumbler dryer design, introduced in October 1997, features commonality of
internal components between models, reducing parts inventory and improving
serviceability. These units have 33% to 50% fewer moving parts as compared to
their previous design. In addition, these tumblers require 20% less drying time
as compared to the previous design and provides the fastest drying time in the
industry.


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      Standard Dryers. Standard dryers are small capacity dryers with the
capability to process up to 18 pounds of laundry per load. Sold under the Speed
Queen and Huebsch brands, standard dryers (including stacked dryers) represented
approximately 11% of 2000 net revenues. In 1997, the Company introduced its
newly designed standard dryer, which serves the multi-housing and international
consumer markets. The Company believes the dryer's increased capacity, measuring
7.1 cubic feet, is among the largest in the industry. The size of the loading
door opening has also been increased to improve loading accessibility. The
Company believes that the increased drying capacity and enhanced operational
convenience that these improvements provide are critical factors to a customer's
product satisfaction.

      Stacked Dryers and Stacked Frontload Washers and Dryers. To enable its
multi-housing customers to conserve valuable floor space, the Company offers a
stacked unit consisting of two 18 pound standard dryers and offers a stacked
combination unit consisting of an 18 pound frontload washer paired with an 18
pound standard dryer.

      Presses and Finishing Equipment. Such sales accounted for approximately 4%
of 2000 net revenues. Presses and finishing equipment are sold primarily to
commercial drycleaners and industrial cleaning plants under the Ajax brand. The
Company offers a broad array of presses and finishing equipment such as cabinet
presses for shirt finishing; pants and linen presses; collar and cuff presses;
shirt sleevers; steam-air garment finishers; and utility presses and
accessories.

      Service Parts. The Company benefits from the recurring sales of service
parts to its large installed base. Such sales accounted for approximately 13% of
2000 net revenues. The Company offers immediate response service whereby many of
its parts are available on a 24-hour turnaround for emergency repair parts
orders.

      Other Value-Added Services. The Company believes its customers attach
significant importance to the value-added services it provides. The Company
offers services that it believes are significant drivers of high customer
satisfaction, such as equipment financing (which accounted for approximately 2%
of 2000 net revenues), laundromat site selection assistance, investment seminar
training materials, computer-aided commercial laundry room design, sales and
service training for distributors, technical support and service training
material. In addition, the Company believes it offers an unmatched range of
complementary customer services and support, including toll-free technical
support and on-call installation and repair service through its highly trained
distributors, and web sites which provide information on all Alliance products
and services including downloadable product literature, installation guides and
site lay-out tools. The Company believes its extensive service capabilities, in
addition to the dependability and functionality of its products, will continue
to differentiate its products from the competition.


                                       11
<PAGE>

Customers

      The Company's customers include more than: (i) 85 distributors to
laundromats; (ii) 75 distributors to on-premise laundries; (iii) 49 distributors
to drycleaners; (iv) 75 route operators serving multi-housing laundries; and (v)
75 international distributors serving more than 60 countries.

      The Company's top ten equipment customers accounted for approximately 32%
of 2000 net revenues. Coinmach, the largest multi-housing route operator in the
United States, PWS Investments, Inc. and Metropolitan Laundry Machinery Co.,
Inc. were the Company's largest customers, the largest of which, Coinmach,
accounted for 13.6% of 2000 net revenues.

Sales and Marketing

      Sales Force. The Company's sales force of 33 is structured to serve the
needs of each customer group. In addition, the Company, through a marketing
staff of approximately 40 professionals, provides customers and distributors
with a wide range of value-added services such as advertising materials,
training materials, computer-aided commercial laundry room design, product
development and technical service support.

      Marketing Programs. The Company supports its sales force and distributors
through a balanced marketing program of advertising and industry trade shows.
Advertising expenses totaled $3.2 million in 2000 and included a variety of
forms, from print and electronic media to direct mail. In addition, Company
representatives attended over 45 trade shows in 2000 to introduce new products,
maintain contact with customers, develop new customer relationships and generate
sales leads for the Company's products.

      Equipment Financing. The Company, through its special purpose financing
subsidiaries, offers an extensive off-balance sheet equipment financing program
to end-users, primarily laundromat owners, to assist in their purchases of new
equipment. Typical terms include 2-9 year loans with an average principal amount
of approximately $87,000. Management believes that the Company's off-balance
sheet equipment financing program is among the industry's most comprehensive and
that the program is an important component of its marketing activities. In
addition, this service provides the Company with stable, recurring income.

      The financing program is structured to minimize risk of loss. The Company
adheres to strict underwriting procedures, including comprehensive applicant
credit analysis (generally including credit bureau, bank, trade and landlord
references, site analysis including demographics of the location and multiple
year pro-forma cash flow projections), the receipt of collateral and distributor
assistance in remarketing collateral in the event of default. As a result of
these risk management tools, losses from the program have been minimal. Net
write-offs inclusive of loans sold to third parties since the inception of the
program in 1992 have been less than 1% as of December 31, 2000.

Research and Development

      The Company's engineering organization is staffed with over 80 engineers
and technical support staff. The Company's recent research and development
efforts have focused primarily on continuous improvement in the reliability,
performance, capacity, energy and water conservation, sound levels and
regulatory compliance of its commercial laundry equipment. The Company's
engineers and technical personnel, together with its marketing and sales
personnel, collaborate with the Company's major


                                       12
<PAGE>

customers to redesign and enhance its products to better meet customer needs.
The cumulative research and development spending exceeded $28.5 million for the
period 1997 through 2000. The Company has developed numerous proprietary
innovations that the Company uses in select products. Over the past three years,
the Company has rolled out its MicroMaster line of electronically controlled
tumblers and washer-extractors under the Speed Queen brand as well as its
CardMate(TM) Plus and NetMaster(TM) debit card cashless systems designed to
replace coin operated equipment. The Company believes this array of new products
allows it to continue to be an innovative leader in electronic controls
equipment. The Company believes improvements made to existing products and the
introduction of new products have supported the Company's market leadership
position.

Competition

      Within the North American stand alone commercial laundry equipment
industry, the Company competes with several large competitors. The Company
believes, however, it is the only participant in the North American stand alone
commercial laundry equipment industry to serve significantly all three customer
groups (laundromats, multi-housing laundries and on-premise laundries) with a
full line of topload washers, washer-extractors, frontload washers, tumbler
dryers and standard dryers. With respect to laundromats, the Company's principal
competitors include Wascomat (the exclusive North American distributor of
Electrolux AB products), Maytag Corporation and The Dexter Company. In
multi-housing, the principal competitors include Maytag Corporation and
Whirlpool Corporation. In on-premise laundry, the Company competes primarily
with Pellerin Milnor Corporation, American Dryer Corporation and Wascomat. The
Company does not believe that a significant new competitor has entered the North
American stand alone commercial laundry equipment industry during the last ten
years, however there can be no assurance that significant new competitors or
existing competitors will not compete for the business of different customer
groups in the future.

      Within the drycleaning industry, the Company competes primarily with other
pressing and finishing equipment and shirt laundering equipment manufacturers.
With respect to pressing and finishing equipment, the Company's principal
competitors include Unipress Corporation, Forenta, L.P. and Cissell
Manufacturing Company (a subsidiary of Laundry Systems Group N.V.). With respect
to shirt laundering equipment (primarily washer-extractors) the Company's
principal competitors include Wascomat and Pellerin Milnor Corporation.

      Certain of the Company's principal competitors have greater financial
resources and/or are less leveraged than the Company and may be better able to
withstand market conditions within the commercial laundry industry. There can be
no assurance that the Company will not encounter increased competition in the
future, which could have a material adverse effect on the Company's business,
financial condition and results of operations.

Manufacturing

      The Company owns and operates two manufacturing facilities located in
Wisconsin and Florida with an aggregate of more than 800,000 square feet. The
facilities are organized to focus on specific product segments, although each
facility serves multiple customer groups. The Ripon plant presently produces the
Company's small-chassis topload washers, frontload washers and small chassis
dryers, and began producing the Company's tumbler dryers, beginning in the
spring of 2000. The Marianna plant produces the Company's large-chassis
washer-extractors, and began producing the Company's presses and finishing
equipment, beginning in the fall of 2000. The Company's manufacturing plants
primarily engage in fabricating, machining, painting, assembly and finishing
operations. The Company also


                                       13
<PAGE>

operates two product distribution centers, both of which are owned. The Company
believes that existing manufacturing facilities provide adequate production
capacity to meet expected product demand.

      The Company purchases substantially all raw materials and components from
a variety of independent suppliers. Key material inputs for manufacturing
processes include motors, stainless steel, aluminum, electronic controls,
corrugated boxes and plastics. The Company believes there are readily available
alternative sources of raw materials from other suppliers. The Company has
developed long-term relationships with many of its suppliers and has sourced
materials from nine of its ten largest suppliers for at least five years.

      The Company is committed to achieving continuous improvement in all
aspects of its business in order to maintain its industry leading position. All
of the Company's manufacturing facilities are ISO 9001 certified.

ITEM 2. PROPERTIES

      The following table sets forth certain information regarding significant
facilities operated by the Company as of December 31, 2000:

<TABLE>
<CAPTION>
                                                              Approximate
     Location                Function/Products                Square Feet   Owned/Leased
<S>                     <C>                                    <C>           <C>
Production Facilities
Ripon, WI.............  Manufacture small washers and
                         dryers, and tumbler dryers              572,900     Owned
Marianna, FL.........   Manufacture washer-extractors,
                         presses and finishing equipment         259,200     Owned (1)
                                                               ---------
                        Subtotal                                 832,100

Regional Distribution Centers
Ripon, WI.............  Washers, dryers, tumbler dryers          147,500     Owned (2)
Ripon, WI.............  Service parts                             60,800     Owned
                                                               ---------
                        Subtotal                                 208,300
Other
Ripon, WI.............  Sales and administration                  65,700     Owned
                        Engineering and procurement               43,100     Owned
                                                               ---------
                        Subtotal                                 133,800
                                                               ---------
                        Total                                  1,283,000
                                                               =========
</TABLE>

(1)   The Marianna building is owned, however, the land is leased from the city
      of Marianna.
(2)   This distribution facility was constructed in late 2000 on property owned
      by the Company.

The Company believes existing manufacturing facilities provide adequate
production capacity to meet product demand.

ITEM 3. LEGAL PROCEEDINGS

      Various claims and legal proceedings generally incidental to the normal
course of business are pending or threatened against the Company. While the
Company cannot predict the outcome of these


                                       14
<PAGE>

matters, in the opinion of management, any liability arising thereunder will not
have a material adverse effect on the Company's business, financial condition
and results of operations after giving effect to provisions already recorded.

      On February 8, 1999, Raytheon commenced an arbitration under the
Commercial Arbitration Rules of the American Arbitration Association in Boston,
Massachusetts against the Company, seeking damages of $12.2 million plus
interest thereon and attorney's fees for breach of the Merger Agreement based on
Raytheon's claim for indemnification for a payment made to a third party
allegedly on behalf of the Company and Alliance Laundry following the Closing.
An arbitration was conducted pursuant to the terms of the Merger Agreement
("Arbitration"). The Company asserted in the Arbitration that Raytheon owed the
$12.2 million to the third party and that neither the Company nor Alliance
Laundry was liable for such amount. In addition, the Company and Bain LLC filed
counterclaims and claims seeking damages in excess of $30 million from Raytheon.
On March 31, 2000, the Arbitrators issued their decision. Pursuant to that
decision Raytheon prevailed on its claim and the Company and Bain LLC prevailed
on its counterclaims. Ultimately, the Company was required to pay Raytheon $6.8
million, including $1.5 million in interest, in full satisfaction of the
arbitration award and after offsetting the amount for price adjustments in favor
of the Company which had been agreed to during 1999. The award payment was made
on April 13, 2000. Of this amount, $9.9 million plus related costs of $0.6
million was recorded in the first quarter financial statements as an adjustment
of members' deficit, consistent with the original recording of the Merger, which
was accounted for as a recapitalization. The price adjustments concluded during
1999 had been previously recorded in the financial statements as of and for the
period ended December 31, 1999. The related net interest of $1.5 million,
including amounts related to prior years, has been included in current year
interest expense.

Environmental, Health and Safety Matters

      The Company and its operations are subject to comprehensive and frequently
changing federal, state and local environmental and occupational health and
safety laws and regulations, including laws and regulations governing emissions
of air pollutants, discharges of waste and storm water and the disposal of
hazardous wastes. The Company is also subject to liability for the investigation
and remediation of environmental contamination (including contamination caused
by other parties) at the properties it owns or operates and at other properties
where the Company or predecessors have arranged for the disposal of hazardous
substances. As a result, the Company is involved, from time to time, in
administrative and judicial proceedings and inquires relating to environmental
matters. There can be no assurance that the Company will not be involved in such
proceedings in the future and that the aggregate amount of future clean-up costs
and other environmental liabilities will not have a material adverse effect on
the Company's business, financial condition and results of operations. The
Company believes that its facilities and operations are in material compliance
with all environmental, health and safety laws.

      Federal, state and local governments could enact laws or regulations
concerning environmental matters that affect the Company's operations or
facilities or increase the cost of producing, or otherwise adversely affect the
demand for, the Company's products. The Company cannot predict the environmental
liabilities that may result from legislation or regulations adopted in the
future, the effect of which could be retroactive. Nor can the Company predict
how existing or future laws and regulations will be administered or interpreted
or what environmental conditions may be found to exist at the Company's
facilities or at other properties where the Company or its predecessors have
arranged for the disposal of hazardous substances.


                                       15
<PAGE>

      Certain environmental investigatory and remedial work is underway or
planned at, or relating to, the Company's Marianna, Florida and Ripon, Wisconsin
manufacturing facilities. With respect to the Marianna facility, such work is
being conducted by a former owner of the property and is being funded through an
escrow account, the available balance of which the Company believes to be
substantially greater than remaining remediation costs. With respect to the
Ripon facility, such work will be conducted by the Company. The Company
currently expects to incur costs of less than $100,000 through 2001 at the Ripon
facility to complete remedial work, subject to the Raytheon indemnification
described below. There can be no assurance, however, that additional remedial
costs will not be incurred by the Company in the future with respect to the
Ripon facility.

      Pursuant to the Merger Agreement, and subject to a three year notice
period following the Closing, Raytheon has agreed to indemnify the Company for
certain environmental liabilities in excess of $1,500,000 in the aggregate
arising from the operations of the Company and its predecessors prior to the
Merger, including with respect to environmental liabilities at the Ripon and
Marianna facilities. In addition to the Raytheon indemnification, with respect
to the Marianna, Florida facility, a former owner of the property has agreed to
indemnify the Company for certain environmental liabilities. In the event that
Raytheon or the former owner fail to honor their respective obligations under
these indemnifications, such liabilities could be borne directly by the Company
and could be material.

      The Company also received an order in 1995 from the U.S. Environmental
Protection Agency ("EPA") requiring participation in clean-up activities at the
Marina Cliffs site in South Milwaukee, Wisconsin, the location of a former drum
reconditioner. EPA asserted that the Ripon facility was a generator of wastes
that were disposed of at the Marina Cliffs site. The asserted disposal predated
the Company's and Raytheon's ownership of the Ripon facility. The Company
believes that EPA also has contacted the prior owner of the facility to assert
that the former owner may be liable. There is an established group of
potentially responsible parties that are conducting a cleanup of the site. The
group has estimated that the cleanup will cost approximately $5 million. The
group proposed to settle their alleged claims against the Company, and to
protect the Company from further liability at the site, for approximately
$100,000. The Company declined the proposal because it believes that any
liability related to the site is borne by the Ripon facility's prior owner, and
not the Company. The Company has met with EPA to explain its defenses to
enforcement of the administrative order. The Company received a General Notice
of Potential Liablility on March 21, 2001 regarding an additional 5 acre parcel
at the site. The position of the Company remains that any liability related to
the site is properly borne by the Ripon facility's owner prior to Raytheon. The
Company also believes that, pursuant to the Merger Agreement, Raytheon has an
obligation of indemnity to the Company in respect to this matter. However, in
the event that the former owner or Raytheon fail to honor their respective
obligations, such liabilities could be borne directly by the Company.

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

None.

                                    PART II.


                                       16
<PAGE>

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

There is no established public trading market for any class of common equity of
the Company. There was one holder of record of the Company's common equity as of
March 28, 2001.

ITEM 6. SELECTED FINANCIAL DATA

      The following table sets forth selected historical combined financial data
for the two years ended December 31, 1997 and selected historical consolidated
financial data for the years ended December 31, 1998, December 31, 1999 and
December 31, 2000. For periods prior to the Merger, the historical combined
financial information represents the results of the Company. As a result of the
Merger, the Company is now a wholly-owned subsidiary of the Parent. Because the
Parent is a holding company with no operating activities and provides certain
guarantees, the financial information presented herein for periods subsequent to
the Merger represents consolidated financial information of the Parent, rather
than consolidated financial information of the Company. The selected historical
combined financial data for the two years ended December 31, 1997 were derived
from the audited combined financial statements of the Company. The summary
historical consolidated financial data for the years ended December 31, 1998,
December 31, 1999 and December 31, 2000 were derived from audited consolidated
financial statements of the Company, which are included elsewhere herein,
together with the report of PricewaterhouseCoopers LLP, independent accountants.
The following table should be read in conjunction with "Management's Discussion
and Analysis of Financial Condition and Results of Operations" and the
historical financial statements and the notes related thereto of the Company
included elsewhere in this Annual Report.

      Certain amounts for the years ended December 31, 1996 through 1999 have
been restated, reflecting certain income statement reclassifications adopted by
the Company in the current year.

<TABLE>
<CAPTION>
                                                                                             Years Ended December 31,
                                                                        ------------------------------------------------------------
                                                                          2000         1999         1998        1997         1996
                                                                        ---------    ---------    ---------   ---------    ---------
<S>                                                                     <C>          <C>          <C>         <C>          <C>
Statements of Income:
Net Revenues ........................................................   $ 265,441    $ 314,374    $ 331,714   $ 349,651    $ 319,987
Operating income ....................................................      31,012       38,296       28,846      42,950       34,078
Other income (expense), net .........................................         354       (1,706)         306        (243)         685
Interest expense ....................................................      35,947       31,509       21,426          --           --
Income (loss) before taxes ..........................................      (4,581)       5,081        7,726      42,707       34,763
Net income (loss) (1) ...............................................      (4,601)       5,052        5,335      26,276       21,355

Other Operating Data:
EBITDA (2) ..........................................................      46,003       50,997       44,241      57,152       45,908
EBITDA before nonrecurring and plant relocation costs (3) ...........      51,456       55,775       51,025      57,152       49,612
Depreciation and amortization .......................................      17,155       16,969       16,671      14,445       11,145
Non-cash interest expense included in amortization above ............       2,518        2,562        1,582          --           --
Nonrecurring costs (4) ..............................................         402        3,707        6,784          --        3,704
Plant relocation costs included in administrative expense (5) .......       5,051        1,071           --          --           --
Capital expenditures ................................................       7,445       10,947        7,861      19,990       22,030
Total assets ........................................................     212,757      219,866      214,204     205,086      209,795
Total debt ..........................................................     336,605      322,048      320,124          --        1,000
</TABLE>


                                       17
<PAGE>

(1)   Subsequent to the consummation of the Merger, the Company is not a tax
      paying entity. Historical amounts represent the Company's tax attributes
      as a division of Raytheon as calculated on a separate return basis.

(2)   "EBITDA," as presented, represents income before income taxes plus
      depreciation, amortization (including non-cash interest expense related to
      amortization of debt issuance costs), cash interest expense and non-cash
      interest expense on the seller subordinated note. Interest accrued on the
      seller subordinated note is capitalized annually and will be repaid when
      the note becomes due. EBITDA is included because management believes that
      such information provides an additional basis for evaluating the Company's
      ability to pay interest, repay debt and make capital expenditures. EBITDA
      should not be considered an alternative to measures of operating
      performance as determined in accordance with generally accepted accounting
      principles, including net income as a measure of the Company's operating
      results and cash flows as a measure of the Company's liquidity. Because
      EBITDA is not calculated identically by all companies, the presentation
      herein may not be comparable to other similarly titled measures of other
      companies.

(3)   "EBITDA before nonrecurring and plant relocation costs," as presented,
      represents income before income taxes plus depreciation, amortization
      (including non-cash interest expense related to amortization of debt
      issuance costs), plant restructuring costs, other nonrecurring costs,
      plant relocation costs included in administrative expenses, cash interest
      expense and non-cash interest expense on the seller subordinated note.
      EBITDA before nonrecurring and plant relocation costs is included because
      management believes that such information provides an additional basis for
      evaluating the Company's ability to pay interest, repay debt and make
      capital expenditures. EBITDA before nonrecurring and plant relocation
      costs should not be considered an alternative to measures of operating
      performance as determined in accordance with generally accepted accounting
      principles, including net income as a measure of the Company's operating
      results and cash flows as a measure of the Company's liquidity. Because
      EBITDA nonrecurring and plant relocation costs is not calculated
      identically by all companies, the presentation herein may not be
      comparable to other similarly titled measures of other companies.

(4)   Nonrecurring costs in 2000 relate to additional medical benefits provided
      as a part of a plant closure. In 1999 such costs relate to a $2.3 million
      restructuring charge and $1.5 million associated with payments under
      retention agreements with certain key employees. In 1998 such costs relate
      to a $4.5 million restructuring charge and $2.3 million associated with
      payments under retention agreements with certain key employees. 1996 is
      associated primarily with reductions in work force.

(5)   Plant relocation costs in 2000 relate primarily to one-time expenses
      related to the relocation of Madisonville, Kentucky and Cincinnati, Ohio
      production lines to Ripon, Wisconsin and Marianna, Florida, respectively.
      Plant relocations costs in 1999 relate primarily to the relocation of
      Madisonville, Kentucky production lines to Ripon, Wisconsin and
      duplication of the Searcy, Arkansas standard dryer and small capacity
      front load washer production lines in Ripon, Wisconsin.


                                       18
<PAGE>

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

OVERVIEW

      The following discussion should be read in conjunction with the Financial
Statements and Notes thereto included in this report. The following discussion
and analysis of the financial condition and results of operations covers periods
before the consummation of the Merger. In connection with the Merger, the
Company has entered into financing arrangements and significantly altered its
capital structure. As a result of the Merger, the Company is operating as a
stand-alone entity for the first time, and the historical financial statements
reflect management's estimates of certain costs associated with operating as a
stand-alone entity and reflect taxes that are not applicable to the Company
following the consummation of the Merger. Accordingly, the results of operations
for the periods subsequent to the consummation of the Merger will not
necessarily be comparable to prior periods.

      The Company believes it is the leading designer, manufacturer and marketer
of stand-alone commercial laundry equipment in North America and a leader
worldwide. Under the well-known brand names of Speed Queen, UniMac, Huebsch and
Ajax, the Company produces a full line of commercial washing machines and dryers
with load capacities from 16 to 250 pounds as well as presses and finishing
equipment. The Company's commercial products are sold to four distinct customer
groups: (i) laundromats; (ii) multi-housing laundries, consisting primarily of
common laundry facilities in apartment buildings, universities and military
installations; (iii) on-premise laundries, consisting primarily of in-house
laundry facilities of hotels, hospitals, nursing homes and prisons and (iv)
drycleaners. In addition, pursuant to a supply agreement with Appliance Co., the
Company supplied consumer washing machines to the consumer appliance business of
Appliance Co. for sale at retail. This supply agreement was completed and
concluded on September 17, 1999.

RESULTS OF OPERATIONS

The following table sets forth the Company's historical net revenues for the
periods indicated:

                                                  Year Ended December 31,
                                          --------------------------------------
                                           2000            1999           1998
                                          ------         --------       --------
                                                  (Dollars in millions)
Net revenues
 Commercial laundry ................      $230.4         $  227.0       $  220.8
 Appliance Co. consumer laundry ....          --             54.7           77.2
 Service parts .....................        35.0             32.7           33.7
                                          ------         --------       --------
                                          $265.4         $  314.4       $  331.7
                                          ======         ========       ========

The following table sets forth certain condensed historical financial data for
the Company expressed as a percentage of net revenues for each of the periods
indicated:


                                       19
<PAGE>

<TABLE>
<CAPTION>
                                                          Year Ended December 31,
                                                    ---------------------------------
                                                     2000          1999          1998
                                                    -----         -----         -----
<S>                                                 <C>           <C>           <C>
Net revenues ..............................         100.0%        100.0%        100.0%
Cost of sales .............................          74.4%         76.2%         79.1%
Gross profit ..............................          25.6%         23.8%         20.9%
Selling, general and administrative expense          13.7%         10.5%         10.2%
Plant restructuring costs .................           0.2%          0.7%           --
Other nonrecurring costs ..................            --           0.5%          2.0%
Operating income ..........................          11.7%         12.2%          8.7%
 Net income ................................          1.7%          1.6%          1.6%
</TABLE>

      Certain percentages for the years ended December 31, 1998 and 1999 have
been restated, reflecting income statement reclassifications adopted by the
Company in the current year.

Year Ended December 31, 2000 Compared to Year Ended December 31, 1999

      Net Revenues. Net revenues for the year ended December 31, 2000 decreased
$49.0 million, or 15.6%, to $265.4 million from $314.4 million for the year
ended December 31, 1999. This decrease, attributable to lower consumer laundry
equipment sales of $54.7 million, was partly offset by increases in commercial
laundry revenue, $3.4 million, and service part revenue, $2.3 million. The
decrease in consumer laundry revenue was due to the completion and conclusion of
the Appliance Co. supply agreement as of September 17, 1999. The increase in
commercial laundry revenue was due primarily to higher North American equipment
revenue of $8.1 million, which was partly offset by lower international revenue
of $1.4 million and lower earnings from the Company's off-balance sheet
equipment financing program of $3.2 million. The increase in North American
equipment revenue was primarily due to higher revenue for regional laundromats
and multi-housing laundries in the first half of 2000, and due to the additional
revenue resulting from the March 6, 2000 acquisition of the Ajax press and
finishing equipment division. Finance program revenue was lower as a result of a
$3.1 million loss recognized in connection with a securitization transaction
completed during the fourth quarter of 2000 (see Note 6 to the Financial
Statements). Revenue from international customers was lower as the Company's
products (priced in U.S. dollars) have become less competitive due to
unfavorable exchange rate movements.

      Gross Profit. Gross profit for the year ended December 31, 2000 decreased
$7.0 million, or 9.4%, to $67.9 million from $74.9 million for the year ended
December 31, 1999. This decrease was due to the completion and conclusion of the
Appliance Co. supply agreement as of September 17, 1999 and lower earnings from
the Company's off-balance sheet equipment financing program. Gross profit as a
percentage of net revenues increased to 25.6% for the year ended December 31,
2000 from 23.8% for the year ended December 31, 1999. The increase in gross
profit as a percentage of net revenues is primarily attributable to the decrease
in revenue from consumer laundry equipment, which was at margins substantially
below that of the remaining business, offset in part by higher unabsorbed
overhead costs caused by lower production volumes and transfers of production
between facilities.

      Selling, General and Administrative Expense. Selling, general and
administrative expenses for the year ended December 31, 2000 increased $3.6
million, or 10.9%, to $36.5 million from $32.9 million for the year ended
December 31, 1999. The increase in selling, general and administrative expenses
was primarily due to an increase of $4.0 million in one-time expenses related to
the relocation of


                                       20
<PAGE>

Madisonville, Kentucky and Cincinnati, Ohio production lines to Ripon, Wisconsin
and Marianna, Florida, respectively, as well as incremental selling, general and
administrative expenses associated with the Ajax product line, and partly offset
by lower sales promotion, legal and pension expenses in 2000. Selling, general
and administrative expenses as a percentage of net revenues increased to 13.7%
for the year ended December 31, 2000 from 10.5% for the year ended December 31,
1999, with the increase driven primarily by the lower revenue from Appliance
Co., which incurred very little in selling, general and administrative expenses
and also driven by the higher one-time expenses related to the product line
relocations.

      Plant Restructuring Costs. Plant restructuring costs for the year ended
December 31, 2000 decreased $1.9 million, or 82.2%, to $0.4 million from $2.3
million for the year ended December 31, 1999. These costs are all related to the
closure of the Company's Madisonville, Kentucky manufacturing facility. See Note
5 - Nonrecurring Items in notes to Financial Statements.

      Other Nonrecurring Costs. Other nonrecurring costs for the year ended
December 31, 1999 were $1.5 million, with no other nonrecurring costs incurred
for the year ended December 31, 2000. The 1999 other nonrecurring costs were
comprised entirely of employee retention costs. See Note 5 - Nonrecurring Items
in notes to Financial Statements.

      Operating Income. As a result of the aforementioned, operating income for
the year ended December 31, 2000 decreased $7.3 million, or 19.0%, to $31.0
million from $38.3 million for the year ended December 31, 1999. Operating
income as a percentage of net revenues decreased to 11.7% for the year ended
December 31, 2000 from 12.2% for the year ended December 31, 1999.

      Interest Expense. Interest expense for the year ended December 31, 2000
increased $4.4 million, or 14.1%, to $35.9 million from $31.5 million for the
year ended December 31, 1999. The increase is primarily attributable to higher
interest rates, the $1.5 million of net interest expense associated with the
Raytheon arbitration award, and borrowings from the revolving line of credit
used in connection with the Raytheon arbitration award (see Note 14 -
Commitments and Contingencies in the Financial Statements) and the acquisition
of the Ajax product line (see Note 4 - Acquisition of Ajax Product Line in the
Financial Statements).

      Other Income (Expense), Net. Other income for the year ended December 31,
2000 was $0.4 million as compared to other expense of $1.7 million for the year
ended December 31, 1999. The 2000 other income is comprised entirely of gains on
the sale of fixed assets. The 1999 other expense is comprised of a $1.5 million
legal settlement resulting from the Appliance Co. settlement agreement (see Note
14 - Commitments and Contingencies in the Financial Statements) and $0.2 million
related to losses on the sale of fixed assets.

      Net Income (Loss). As a result of the aforementioned, net income for the
year ended December 31, 2000 decreased $9.7 million to a net loss of $4.6
million as compared to net income of $5.1 million for the year ended December
31, 1999. Net income as a percentage of net revenues decreased to (1.7%) for the
year ended December 31, 2000 from 1.6% for the year ended December 31, 1999.


                                       21
<PAGE>

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

      Net Revenues. Net revenues for the year ended December 31, 1999 decreased
$17.3 million, or 5.2%, to $314.4 million from $331.7 million for the year ended
December 31, 1998. This decrease was attributable to lower consumer laundry
equipment revenue of $22.5 million and service part revenue of $1.0 million
partly offset by increases in commercial laundry revenue of $6.2 million. The
decrease in consumer laundry revenue is due to the completion and conclusion of
the two year supply agreement with Appliance Co. as of September 17, 1999. The
increase in commercial laundry revenue was primarily due to higher revenue from
multi-housing laundries, $5.2 million, and laundromats, $5.4 million, which were
partly offset by a decrease in revenue from on-premise laundries, $3.3 million,
and lower revenue from international customers, $0.9 million. The multi-housing
revenue increase was driven by the growth of several key customers. The
laundromat revenue increase was driven by the expansion of several regional coin
laundry customers. Revenue from on-premise laundries declined primarily as a
result of lower government funding for long-term health care facilities. Revenue
from international customers was lower due to the Company's closure of its Latin
American coin laundromat operations.

      Gross Profit. Gross profit for the year ended December 31, 1999 increased
$5.5 million, or 7.9%, to $74.9 million from $69.4 million for the year ended
December 31, 1998. This increase was attributable to manufacturing efficiencies
which were partially offset by higher field service expenses of $1.7 million
related to a recent new product introduction. Gross profit as a percentage of
net revenues increased to 23.8% for the year ended December 31, 1999 from 20.9%
for the year ended December 31, 1998. The increase in gross profit as a
percentage of net revenues is primarily attributable to the manufacturing
efficiencies noted above and the decrease in revenue from consumer laundry
equipment, which was at margins substantially below that of the remaining
business.

      Selling, General and Administrative Expense. Selling, general and
administrative expenses for the year ended December 31, 1999 decreased $0.9
million, or 2.6%, to $32.9 million from $33.8 million for the year ended
December 31, 1998. The decrease in selling, general and administrative expenses
was primarily due to lower loss recognition related to reduced sales of trade
receivables through the Company's off-balance sheet special purpose entity of
$1.5 million, and lower selling, general and administrative expenses resulting
from the closure of the Company's Latin American coin laundromat operations of
$1.3 million, which were partially offset by costs of being a stand-alone
business entity (resulting from the May 5, 1998 Merger). Selling, general and
administrative expenses as a percentage of net revenues increased to 10.5% for
the year ended December 31, 1999 from 10.2% for the year ended December 31,
1998.

      Plant Restructuring Costs. Plant restructuring costs for the year ended
December 31, 1999 were $2.3 million, with no plant restructuring costs incurred
for the year ended December 31, 1998. These costs relate to a $2.3 million
charge ($1.9 million was non-cash) associated with recognition of closure costs
for the Company's Madisonville, Kentucky manufacturing facility. See Note 5 -
Nonrecurring Items in notes to Financial Statements.

      Other Nonrecurring Costs. Other nonrecurring costs for the year ended
December 31, 1999 decreased $5.3 million to $1.5 million from $6.8 million for
the year ended December 31, 1998. The 1998 other nonrecurring costs were
comprised of employee retention costs of $2.3 million and a restructuring charge
of $4.5 million ($3.6 million was non-cash) associated with the closing of the
Company's Argentina coin laundromat operations. The 1999 other nonrecurring
costs were comprised entirely of employee retention costs. See Note 5 -
Nonrecurring Items in notes to Financial Statements.


                                       22
<PAGE>

      Operating Income. As a result of the aforementioned, operating income for
the year ended December 31, 1999 increased $9.5 million, or 32.8%, to $38.3
million from $28.8 million for the year ended December 31, 1998. Operating
income as a percentage of net revenues increased to 12.2% for the year ended
December 31, 1999 from 8.7% for the year ended December 31, 1998.

      Interest Expense. Interest expense for the year ended December 31, 1999
increased $10.1 million, or 47.1%, to $31.5 million from $21.4 million for the
year ended December 31, 1998. The increase is attributable to incurring a full
year of interest expense in 1999 on debt issued in connection with the Merger,
whereas 1998 includes only interest expense from the Merger date (May 5, 1998)
through December 31, 1998.

      Other Income (Expense), Net. Other expense for the year ended December 31,
1999 was $1.7 million as compared to other income of $0.3 million for the year
ended December 31, 1998. The 1999 other expense is comprised of a $1.5 million
legal settlement resulting from the Appliance Co. settlement agreement (see Note
14 - Commitments and Contingencies in notes to Financial Statements) and $0.2
million related to losses on the sale of fixed assets. The 1998 other income is
comprised entirely of gains on the sale of fixed assets.

      Net Income (Loss). As a result of the aforementioned, net income for the
year ended December 31, 1999 decreased $0.3 million, or 5.3%, to $5.1 million
from $5.3 million for the year ended December 31, 1998. Net income as a
percentage of net revenues remained unchanged at 1.6% for the years ended
December 31, 1999 and December 31, 1998.

LIQUIDITY AND CAPITAL RESOURCES

Post-Merger

      Following the Merger, the Company's principal sources of liquidity are
cash flows generated from operations and borrowings under the Company's $75.0
million revolving credit facility (the "Revolving Credit Facility"). The
Company's principal uses of liquidity are to meet debt service requirements,
finance the Company's capital expenditures and provide working capital. The
Company expects that capital expenditures in 2001 will not exceed $10.0 million
including all remaining capital expenditures associated with moving the Ajax
press and finishing equipment production from Cincinnati to the Marianna,
Florida production facility. The Company expects the ongoing requirements for
debt service, capital expenditures and working capital will be funded by
internally generated cash flow and borrowings under the Revolving Credit
Facility. The Company has incurred substantial indebtedness in connection with
the Merger. As of December 31, 2000, the Company has $336.6 million of
indebtedness outstanding.

      At December 31, 2000 the Company had outstanding debt of $199.5 million
under the Company's term loan facility (the "Term Loan Facility"), $110.0
million of senior subordinated notes, $14.3 million of junior subordinated
notes, $0.8 million of borrowings pursuant to a Wisconsin Community Development
Block Grant Agreement and $12.0 million of borrowings under the Company's
Revolving Credit Facility. At December 31, 2000 the Company had $54.2 million of
its $75.0 million Revolving Credit Facility available subject to certain
limitations under the Company's $275 million credit agreement, dated May 5, 1998
(the "Senior Credit Facility"). After considering such limitations, the Company
could have borrowed $21.7 million at December 31, 2000 in additional
indebtedness under the Revolving Credit Facility.


                                       23
<PAGE>

      The $199.5 million Term Loan Facility amortizes yearly and is repayable in
the following aggregate annual amounts:
                                               Amount Due
                                               ----------
                   Year                       (Dollars in
                   ----                        millions)
                   2001...................   $    1.0
                   2002...................   $    1.0
                   2003...................   $   20.5
                   2004...................   $   98.5
                   2005...................   $   78.5

      The Term Loan Facility is also subject to mandatory prepayment with the
proceeds of certain debt incurrences, asset sales and a portion of Excess Cash
Flow (as defined in the Senior Credit Facility). The Revolving Credit Facility
will terminate in 2003.

      Concurrent with the Closing of the Merger, the Company entered into an
asset backed facility, which provides $250.0 million of off-balance sheet
financing for trade receivables and equipment loans (the "Asset Backed
Facility"). The finance programs have been and will continue to be structured in
a manner that qualifies for off-balance sheet treatment in accordance with
generally accepted accounting principles. It is expected that under the Asset
Backed Facility, the Company will continue to act as originator and servicer of
the equipment financing promissory notes and the trade receivables.

      The Company's ability to make scheduled payments of principal or to pay
the interest or liquidated damages, if any, or to refinance its indebtedness, or
to fund planned capital expenditures, will depend upon its future performance,
which in turn is subject to general economic, financial, competitive and other
factors that are beyond its control. Based upon the current level of operations
and anticipated growth, management believes that future cash flow from
operations, together with available borrowings under the Revolving Credit
Facility, will be adequate to meet the Company's anticipated requirements for
capital expenditures, working capital, interest payments and scheduled principal
payments. There can be no assurance, however, that the Company's business will
continue to generate sufficient cash flow from operations in the future to
service its debt and make necessary capital expenditures after satisfying
certain liabilities arising in the ordinary course of business. If unable to do
so, the Company may be required to refinance all or a portion of its existing
debt, to sell assets or to obtain additional financing. There can be no
assurance that any such refinancing would be available or that any such sales of
assets or additional financing could be obtained.

Historical

      Cash generated from operations for the twelve months ended December 31,
2000 of $15.3 million was principally derived from the Company's earnings before
depreciation and amortization. The working capital investment in accounts
receivable at December 31, 2000 of $10.6 million decreased $23.0 million as
compared to the balance of $33.6 million at December 31, 1999, which was
primarily attributable to selling a higher percentage of accounts receivable
through Alliance Laundry Receivable Warehouse ("ALRW"). The working capital
investment in accounts payable at December 31, 2000 of $8.8 million decreased
$3.6 million as compared to the balance of $12.4 million at December 31, 1999.
The accounts payable balance at December 31, 1999 resulted from lower purchases
and production in December 2000 as compared to December 1999.

      Cash generated from operations for the twelve months ended December 31,
1999 of $11.7 million was principally derived from the Company's earnings before
depreciation and amortization


                                       24
<PAGE>

partially offset by changes in working capital. The working capital investment
in accounts receivable at December 31, 1999 of $33.6 million increased $12.2
million as compared to the balance of $21.4 million at December 31, 1998, which
was primarily attributable to selling fewer accounts receivable through ALRW.
The working capital investment in accounts payable at December 31, 1999 of $12.4
million increased $3.8 million as compared to the balance of $8.6 million at
December 31, 1998. The accounts payable balance at December 31, 1998 resulted
from lower purchases and production in December 1998 as compared to December
1999.

      Prior to the Merger, cash had been transferred between the Company and
Raytheon based on the Company's cash position. For the period from January 1,
1998 through May 4, 1998, the Company transferred cash to Raytheon of $17.5
million, which was generated substantially through the sale of trade receivables
prior to the Merger and from the Company's earnings before depreciation and
amortization.

Capital Expenditures

      The Company's capital expenditures for the twelve months ended December
31, 2000 and December 31, 1999 were $7.4 million and $10.9 million,
respectively. Capital spending in 2000 was principally related to transitioning
tumbler production from the Madisonville manufacturing facility to the Ripon
manufacturing facility and construction of the Ripon, Wisconsin distribution
center, while spending in 1999 was principally related to transitioning dryer
production from Appliance Co. to the Ripon manufacturing facility and reducing
manufacturing costs.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

      In June 1998, SFAS No. 133, "Accounting for Derivative Instruments and
Hedging Activities" was issued and was effective for all fiscal years beginning
after June 15, 1999. SFAS No. 133 was subsequently amended by SFAS No. 137,
"Accounting for Derivative Instruments and Hedging Activities-Deferral of the
Effective Date of SFAS No. 133," and will now be effective for fiscal years
beginning after June 15, 2000, with early adoption permitted. SFAS No. 133, as
amended, requires the Company to recognize all derivatives as either assets or
liabilities and measure those instruments at fair value. Upon adoption, the
Company will be required to report derivative and hedging instruments at fair
value in the balance sheet and recognize changes in the fair value of
derivatives in net income or other comprehensive income, as appropriate. This
statement will be effective for the Company's first quarter of 2001. Given the
Company's current derivative and hedging activities, the effect of the adoption
will not have a material effect on the Company's results of operations or
financial position.

      In October 2000, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards (SFAS) No. 140, "Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities, as replacement
of SFAS No. 125." The Statement revises certain aspects of the current standards
for accounting for securitizations and other transfers of financial assets and
collateral, and requires certain new and expanded disclosures. The Statement is
effective for transfers and servicing of financial assets occurring after March
31, 2001. The Company is in the process of assessing the effects of SFAS No. 140
on its financial statements.

      In October 2000, the Emerging Issues Task Force (EITF) reached a consensus
on Issue No. 99-20, "Recognition of Interest Income and Impairment on Purchased
and Retained Beneficial Interests in Securitized Financial Assets." The
consensus concludes on how a transferor that retains an interest in a
securitization transaction, or an enterprise that purchases a beneficial
interest in securitized financial


                                       25
<PAGE>

assets, should account for interest income and impairment. Issue No. 99-20 is
required to be adopted by the Company no later than the first quarter of 2001.
The Company is currently evaluating the effects of Issue No. 99-20 on its
financial statements.

FORWARD-LOOKING STATEMENTS

      With the exception of the reported actual results, the information
presented herein contains predictions, estimates or other forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Act of 1934, as amended, including
items specifically discussed in the "Note 14 - Commitments and Contingencies"
section of this document. Such forward-looking statements involve known and
unknown risks, uncertainties and other factors that may cause actual results,
performance or achievements of the Company to differ materially from those
expressed or implied by such forward-looking statements. Although the Company
believes that its plans, intentions and expectations reflected in such
forward-looking statements are based on reasonable assumptions, it can give no
assurance that such plans, intentions, expectations, objectives or goals will be
achieved. Important factors that could cause actual results to differ materially
from those included in forward-looking statements include: impact of
competition; continued sales to key customers; possible fluctuations in the cost
of raw materials and components; possible fluctuations in currency exchange
rates, which affect the competitiveness of the Company's products abroad; market
acceptance of new and enhanced versions of the Company's products; the impact of
substantial leverage and debt service on the Company and other risks listed from
time to time in the Company's reports, including but not limited to the
Company's Registration Statement on Form S-4 (file no. 333-56857).

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

      The Company is potentially exposed to market risk associated with changes
in interest and foreign exchange rates. The Company does not and currently does
not intend to hedge exchange rate fluctuations between United States dollars and
foreign currencies. However, from time to time, the Company may enter into
derivative financial instruments to hedge its interest rate exposures. An
instrument will be treated as a hedge if it is effective in offsetting the
impact of volatility in the Company's underlying interest rate exposures. The
Company does not enter into derivatives for speculative purposes.

      Revenue from international customers represented approximately 13% of 2000
net revenues. At December 31, 2000, there were no material non-United States
dollar denominated financial instruments outstanding which exposed the Company
to foreign exchange risk.

      As noted above, the Company is exposed to market risk associated with
adverse movements in interest rates. Specifically, the Company is primarily
exposed to changes in the fair value of its $110 million senior subordinated
notes, and to changes in earnings and related cash flows on its variable
interest rate debt obligations outstanding under the Senior Credit Facility and
its retained interests related to trade accounts receivable and equipment loans
sold to the Company's special purpose finance subsidiaries. Borrowings
outstanding under the Senior Credit Facility totaled $199.5 million at December
31, 2000.

      The fair value of the Company's senior subordinated notes was
approximately $82.5 million based upon prevailing prices in recent market
transactions as of December 31, 2000. The Company


                                       26
<PAGE>

estimates that this fair value would increase/decrease by approximately $5.7
million based upon an assumed 10% decrease/increase in interest rates compared
with the effective yield on the senior subordinated notes as of December 31,
2000.

      An assumed 10% increase/decrease in the variable interest rate of 9.2% in
effect at December 31, 2000 related to the term loan borrowings outstanding
under the Senior Credit Facility would decrease/increase annualized earnings and
cash flows by approximately $1.9 million.

      Effective March 10, 1999, the Company entered into a $67 million interest
rate swap agreement with a financial institution to hedge a portion of its
interest rate risk related to its term loan borrowings under the Senior Credit
Facility. Under the swap, which has a term of three years, the Company pays a
fixed rate of 4.962% and receives quarterly interest payments based upon LIBOR.
The differential between the fixed and floating interest rates under the swap is
accrued and is recorded as an adjustment of interest expense. The effect of this
agreement on the Company's interest expense during 2000 was a reduction of $1.0
million. The fair value of this interest rate swap agreement which represents
the amount that the Company would receive to settle the instrument is $0.7
million at December 31, 2000.

      An assumed 10% increase/decrease in interest rates under the Asset Backed
Facility at December 31, 2000 would not have a material effect on the fair value
of the retained interest in sold trade accounts receivable due to the short-term
nature of the underlying receivables. Finally, based upon the mix of variable
and fixed rate equipment loans sold by the Company, a 10% increase/decrease in
interest rates would decrease/increase the fair value of the Company's retained
interests at December 31, 2000 of $21.4 million by less than $1.0 million.


                                       27
<PAGE>

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Index to 2000 Financial Statements:
<TABLE>
<CAPTION>
                                                                                          Page
                                                                                          ----
<S>                                                                               <C>
Report of Independent Accountants ......................................................   29
Consolidated Balance Sheets at December 31, 2000 and 1999 ..............................   30
Consolidated Statements of Income (Loss) for the three years ended December 31, 2000 ...   31
Consolidated Statements of Members' Deficit and Comprehensive
    Income (Loss) for three years ended December 31, 2000 ..............................   32
Consolidated Statements of Cash Flows for the three years ended December 31, 2000 ......   33
Notes to Financial Statements ..........................................................   34

Financial Statement Schedules:
    For the three years ended December 31, 2000

    II - Valuation and Qualifying Accounts .............................................   62
</TABLE>
All other schedules are omitted because they are not applicable or the required
information is shown in the financial statements or notes thereto.


                                       28
<PAGE>

                        REPORT OF INDEPENDENT ACCOUNTANTS
                        ---------------------------------

To the Board of Managers and Members
  of Alliance Laundry Holdings LLC

      In our opinion, the financial statements listed in the accompanying index
present fairly, in all material respects, the financial position of Alliance
Laundry Holdings LLC at December 31, 2000 and 1999, and the results of its
operations and its cash flows for each of the three years in the period ended
December 31, 2000, in conformity with accounting principles generally accepted
in the United States of America. In addition, in our opinion, the financial
statement schedules listed in the accompanying index present fairly, in all
material respects, the information set forth therein when read in conjunction
with the related financial statements. These financial statements and financial
statement schedules are the responsibility of the Company's management; our
responsibility is to express an opinion on these financial statements and
financial statement schedules based on our audits. We conducted our audits of
these statements in accordance with auditing standards generally accepted in the
United States of America, which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide reasonable basis for the opinion expressed above.


PRICEWATERHOUSECOOPERS LLP
Milwaukee, Wisconsin
March 13, 2001


                                       29
<PAGE>

                         ALLIANCE LAUNDRY HOLDINGS LLC
                          CONSOLIDATED BALANCE SHEETS
                                (in thousands)

<TABLE>
<CAPTION>
                                                                          December 31,
                                                                    ----------------------
                                                                      2000          1999
                                                                    ---------    ---------
<S>                                                                 <C>          <C>
                                        Assets
Current assets:
 Cash ...........................................................   $   5,091    $   3,028
 Cash-restricted ................................................         494          956
 Accounts receivable (net of allowance for doubtful accounts of
  $719 and $463 at December 31, 2000 and 1999, respectively) ....      10,575       33,578
 Inventories, net ...............................................      37,462       31,282
 Prepaid expenses and other .....................................       8,825        6,160
                                                                    ---------    ---------
  Total current assets ..........................................      62,447       75,004

Notes receivable ................................................      24,265       18,314
Property, plant and equipment, net ..............................      53,857       57,615
Goodwill (net of accumulated amortization of $9,720 and $7,746 at
 December 31, 2000 and 1999, respectively) ......................      57,327       48,319
Debt issuance costs, net ........................................      10,583       13,064
Other assets ....................................................       4,278        7,550
                                                                    ---------    ---------
  Total assets ..................................................   $ 212,757    $ 219,866
                                                                    =========    =========

                         Liabilities and Members' Deficit
Current liabilities:
 Current portion of long-term debt ..............................   $   1,036    $     500
 Accounts payable ...............................................       8,755       12,362
 Finance program obligation .....................................       3,121        3,551
 Revolving credit facility ......................................      12,000           --
 Other current liabilities ......................................      18,466       21,805
                                                                    ---------    ---------
  Total current liabilities .....................................      43,378       38,218

Long-term debt:
 Senior credit facility .........................................     198,500      199,500
 Senior subordinated notes ......................................     110,000      110,000
 Junior subordinated note .......................................      14,343       12,048
 Other long-term debt ...........................................         726           --

Other long-term liabilities .....................................       1,671        1,866
                                                                    ---------    ---------
  Total liabilities .............................................     368,618      361,632

Mandatorily redeemable preferred equity .........................       6,000        6,000
Members' deficit ................................................    (161,861)    (147,766)
                                                                    ---------    ---------
  Total liabilities and members' deficit ........................   $ 212,757    $ 219,866
                                                                    =========    =========
</TABLE>

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


                                       30
<PAGE>

                         ALLIANCE LAUNDRY HOLDINGS LLC
                   CONSOLIDATED STATEMENTS OF INCOME (LOSS)
                                (in thousands)

<TABLE>
<CAPTION>
                                                    Years Ended December 31,
                                             -----------------------------------
                                               2000         1999         1998
                                             ---------    ---------    ---------
<S>                                          <C>          <C>          <C>
Net Revenues:
 Commercial laundry .......................  $ 230,448    $ 226,976    $ 220,831
 Appliance Co. consumer laundry ...........         --       54,682       77,184
 Service parts ............................     34,993       32,716       33,699
                                             ---------    ---------    ---------
                                               265,441      314,374      331,714
Cost of sales .............................    197,558      239,482      262,319
                                             ---------    ---------    ---------
Gross profit ..............................     67,883       74,892       69,395
                                             ---------    ---------    ---------

Selling, general and administrative expense     36,469       32,889       33,765
Plant restructuring costs .................        402        2,255           --
Other nonrecurring costs ..................         --        1,452        6,784
                                             ---------    ---------    ---------
Total operating expenses ..................     36,871       36,596       40,549
                                             ---------    ---------    ---------
 Operating income .........................     31,012       38,296       28,846
Interest expense ..........................     35,947       31,509       21,426
Other income (expense), net ...............        354       (1,706)         306
                                             ---------    ---------    ---------
 Income (loss) before taxes ...............     (4,581)       5,081        7,726
Provision for income taxes ................         20           29        2,391
                                             ---------    ---------    ---------
 Net income (loss) ........................  $  (4,601)   $   5,052    $   5,335
                                             =========    =========    =========
</TABLE>

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


                                       31
<PAGE>

                         ALLIANCE LAUNDRY HOLDINGS LLC
                  CONSOLIDATED STATEMENTS OF MEMBERS' DEFICIT
                        AND COMPREHENSIVE INCOME (LOSS)
                                (in thousands)

<TABLE>
<CAPTION>
                                                                                                Years Ended December 31,
                                                                                        -------------------------------------------
                                                                                          2000             1999              1998
                                                                                        ---------        ---------        ---------

<S>                                                                                     <C>              <C>              <C>
Members' deficit, beginning of year .............................................       $(147,766)       $(151,312)       $ 148,573
Net income (loss) ...............................................................          (4,601)           5,052            5,335

Accumulated other comprehensive income (loss):
 Net unrealized holding gain on residual interest, beginning of year ............            (127)           2,800               --
 Unrealized gain (loss) .........................................................             699           (2,927)           2,800
                                                                                        ---------        ---------        ---------
 Net unrealized holding gain (loss) on residual interest, end of year ...........             572             (127)           2,800

Net cash and noncash transfers to Raytheon ......................................              --               --          (17,450)
Issuance of common units ........................................................              --               --           48,882
Distribution from/(to) Raytheon and related transaction costs ...................         (10,507)           1,421         (339,452)
Repayment of loans to management ................................................             314               --               --
                                                                                        ---------        ---------        ---------
Members' deficit, end of year ...................................................       $(161,861)       $(147,766)       $(151,312)
                                                                                        =========        =========        =========

Comprehensive income (loss):
 Net income (loss) ..............................................................       $  (4,601)       $   5,052        $   5,335
 Other comprehensive income (loss):
  Net unrealized holding gain (loss) on residual interest .......................             699           (2,927)           2,800
                                                                                        ---------        ---------        ---------
 Comprehensive income (loss) ....................................................       $  (3,902)       $   2,125        $   8,135
                                                                                        =========        =========        =========
</TABLE>

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


                                       32
<PAGE>

                         ALLIANCE LAUNDRY HOLDINGS LLC
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                (in thousands)

<TABLE>
<CAPTION>
                                                                                                Years Ended December 31,
                                                                                    -----------------------------------------------
                                                                                      2000               1999                1998
                                                                                    ---------          ---------          ---------
<S>                                                                                 <C>                <C>                <C>
Cash flows from operating activities:
 Net income (loss) ........................................................         $  (4,601)         $   5,052          $   5,335
 Adjustments to reconcile net income to net cash
  provided by operating activities:
   Depreciation and amortization ..........................................            17,155             16,969             16,671
   Restructuring charges ..................................................               402              2,255              4,466
   Non-cash junior subordinated note interest .............................             2,295              1,924              1,124
   (Gain) loss on sale of property, plant and equipment ...................              (354)               215               (306)
   Deferred income taxes ..................................................                --                 --                180
   Changes in assets and liabilities, excluding effects of
    acquisition opening balance sheet:
    Accounts and notes receivable .........................................            12,734            (16,435)             2,615
    Inventories ...........................................................            (2,992)              (839)             3,271
    Other assets ..........................................................               263              1,107            (10,049)
    Accounts payable ......................................................            (4,418)             3,745             (7,298)
    Finance program obligation ............................................              (192)              (475)           (10,254)
    Other liabilities .....................................................            (5,002)            (1,856)             1,032
                                                                                    ---------          ---------          ---------
   Net cash provided by operating activities ..............................            15,290             11,662              6,787
                                                                                    ---------          ---------          ---------

Cash flows from investing activities:
 Additions to property, plant and equipment ...............................            (7,445)           (10,947)            (7,861)
 Acquisition of business ..................................................           (13,399)                --                 --
 Proceeds on disposal of property, plant and equipment ....................             1,287                739              2,350
                                                                                    ---------          ---------          ---------
   Net cash used in investing activities ..................................           (19,557)           (10,208)            (5,511)
                                                                                    ---------          ---------          ---------

Cash flows from financing activities:
 Transfers to Raytheon ....................................................                --                 --            (15,553)
 Proceeds from senior term loan ...........................................                --                 --            200,000
 Proceeds from senior subordinated notes ..................................                --                 --            110,000
 Proceeds from junior subordinated note ...................................                --                 --              9,000
 Issuance of mandatorily redeemable preferred equity ......................                --                 --              6,000
 Issuance of common units .................................................                --                 --             48,882
 Proceeds from long-term debt .............................................               750                 --
 Payments of long-term debt ...............................................              (500)                --                 --
 Net increase from revolving line of credit borrowings ....................            12,000                 --                 --
 Debt financing costs .....................................................                --               (686)           (16,522)
 Distribution to Raytheon and related transaction costs ...................            (5,920)            (2,579)          (339,452)
                                                                                    ---------          ---------          ---------
   Net cash provided by (used in) financing activities ....................             6,330             (3,265)             2,355
                                                                                    ---------          ---------          ---------

Increase (decrease) in cash ...............................................             2,063             (1,811)             3,631
Cash at beginning of year .................................................             3,028              4,839              1,208
                                                                                    ---------          ---------          ---------
Cash at end of year .......................................................         $   5,091          $   3,028          $   4,839
                                                                                    =========          =========          =========
Supplemental disclosure of cash flow information:
 Cash paid for interest ...................................................         $  31,283          $  27,670          $  15,579
 Non-cash transaction:
  Recapitalization price adjustment receivable ............................                --              4,000                 --
</TABLE>

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


                                       33
<PAGE>

                          ALLIANCE LAUNDRY HOLDINGS LLC

                          NOTES TO FINANCIAL STATEMENTS

                        December 31, 2000, 1999 and 1998
            (Dollar amounts in thousands unless otherwise indicated)

Note 1 - Description of Business and Basis of Presentation:

Description of Business

      Alliance Laundry Holdings LLC (the "Company") designs, manufactures and
services a full line of commercial laundry equipment for sale in the U.S. and
for export to numerous international markets. The Company also manufactures
consumer washing machines for sale to international customers. The Company
produces all of its products in the U.S. at two manufacturing plants located in
Ripon, Wisconsin and Marianna, Florida.

      The Company originated from the acquisition of Speed Queen Company ("Speed
Queen") by Raytheon Company ("Raytheon") in October of 1979. Speed Queen
operated as a separate subsidiary of Raytheon until March 31, 1996 when it was
merged into Amana Refrigeration, Inc. ("Amana"), a wholly-owned subsidiary of
Raytheon, which manufactured and serviced home appliances. In connection with
this consolidation, the Speed Queen legal entity was dissolved and Amana was
renamed Raytheon Appliances, Inc. On September 10, 1997, in connection with the
sale by Raytheon of its consumer laundry business (see "Sale to Appliance Co."),
Raytheon Appliances, Inc. was dissolved. Concurrently, Raytheon Commercial
Laundry LLC was established as a limited liability company to carry on the
commercial laundry portion of Raytheon's appliance business.

Sale to Appliance Co.

      Historically, the Company reported as one of five operating units
comprising Raytheon's appliances division. On September 10, 1997, Raytheon sold
three of the five operating units of its appliances division to Amana Company,
L.P. ("Appliance Co." or the "Appliance Co. Transaction"). As a result of this
sale, Raytheon divested its consumer appliance (including consumer laundry),
heating and air conditioning, and commercial cooking operating units, while
retaining its commercial laundry and control systems operating units. In
connection with the sale, Raytheon also sold to Appliance Co. a laundry
manufacturing plant in Searcy, Arkansas ("Searcy"). This plant had been acquired
by Raytheon as part of the Speed Queen acquisition. Searcy's operations were
predominantly related to the production of consumer laundry equipment
(approximately 80% consumer and 20% commercial).

      Effective September 10, 1997, in connection with the Appliance Co.
Transaction, the Company and Appliance Co. entered into two supply agreements.
Under the first supply agreement, the Company agreed to purchase small chassis
front loading washing machines from Appliance Co. for one year and small chassis
dryers, stack dryers, and stack front loading washer/dryer combinations for two
years commencing on September 10, 1997. The Company agreed to purchase a minimum
of 144,000 machines over the two year period at an approximate cost of $40
million. As of September 10, 1999 the Company discontinued the purchase of all
products under this supply agreement. The Company has developed the production
capability to produce and is currently producing those products at its Ripon,
Wisconsin facility.

      Under a second agreement (the "Appliance Co. Purchase Agreement"),
Appliance Co. agreed to purchase a specified quantity of top loading washing
machines from the Company annually over the


                                       34
<PAGE>

term of the agreement. This agreement was not renewed and production of washing
machines under this agreement was discontinued after September 17, 1999.

Basis of Presentation

      The financial statements as of and for the years ended December 31, 2000
and 1999 present the financial position and results of operations of the Company
following the May 1998 recapitalization (the "Recapitalization") and merger
discussed in Note 3. The merger has been accounted for as a recapitalization and
accordingly, the historical accounting basis of the assets and liabilities is
unchanged. The financial statements as of and for the years ended December 31,
2000 and 1999 represent the consolidated financial position and results of
operations of the Company, including its wholly-owned direct and indirect
subsidiaries, Alliance Laundry Systems LLC and Alliance Laundry Corporation
which were formed in connection with the Recapitalization.

      For the period prior to the Recapitalization, the financial statements
present the Company's results of operations and financial position as it
operated as a unit of Raytheon, including certain adjustments necessary for a
fair presentation of the business. The financial statements presented for the
pre-Recapitalization period may not be indicative of the results that would have
been achieved had the Company operated as an unaffiliated entity. All material
intercompany transactions have been eliminated in the preparation of these
financial statements.

Note 2 - Significant Accounting Policies:

Use of Estimates

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

Cash, Cash Equivalents and Cash Management

      The Company considers all highly liquid debt instruments with an initial
maturity of three months or less at the date of purchase to be cash equivalents.
Restricted cash at December 31, 2000 and 1999 represent unremitted collections
on notes receivable sold prior to May 5, 1998.

Revenue Recognition

      Revenue is recognized by the Company when all of the following criteria
are met: persuasive evidence of an arrangement exists; delivery has occurred and
ownership has transferred to the customer; the price to the customer is fixed or
determinable; and collectability is reasonably assured. With the exception of
certain sales to international customers, which are recognized upon receipt by
the customer, these criteria are satisfied, and accordingly, revenue is
recognized upon shipment by the Company. In December 1999, the Securities and
Exchange Commission ("SEC") released Staff Accounting Bulletin No. 101 ("SAB
101"), "Revenue Recognition in Financial Statements." SAB 101 was effective for
the Company in the fourth quarter of 2000 and did not have a material effect on
the Company's financial statements.


                                       35
<PAGE>

      The Company sold consumer laundry products manufactured at its Ripon,
Wisconsin plant to Appliance Co. and its predecessor Amana until the termination
of the supply agreement on September 17, 1999. Sales of consumer laundry
products were made to Appliance Co. at amounts approximating 1997 standard costs
in accordance with the Appliance Co. Purchase Agreement.

Shipping and Handling Fees and Costs

      During the fourth quarter of 2000, the Company adopted the provisions of
the Emerging Issues Task Force ("EITF") Issue No. 00-10 "Accounting for Shipping
and Handling Fees and Costs." In accordance with the provisions of EITF 00-10,
certain shipping and handling fees and costs which the Company had previously
recorded on a net basis as a component of selling, general and administrative
expenses are reflected in net revenues and cost of goods sold as appropriate.
Prior year amounts have been reclassified in the accompanying statements of
income (loss) to conform with the requirements of EITF 00-10.

Sales Incentive Costs

      During the fourth quarter of 2000, the Company adopted the provisions of
the Emerging Issues Task Force ("EITF") Issue No. 00-14 "Accounting for Certain
Sales Incentives." In accordance with the provisions of EITF 00-14, certain
sales incentive costs which the Company had previously recorded as a component
of selling, general and administrative expenses are reflected in net revenues.
Prior year amounts have been reclassified in the accompanying statements of
income (loss) to conform with the requirements of EITF 00-14.

Financing Program Revenue

      As discussed below, the Company sells notes receivable and accounts
receivable through its special-purpose bankruptcy remote entities. The Company,
as servicing agent, retains collection and administrative responsibilities for
the notes and accounts receivable. The Company earns a servicing fee, based on
the average outstanding balance. In addition, the Company records gains or
losses on the sales of notes receivable and accounts receivable in the period in
which such sales occur in accordance with Statement of Financial Accounting
Standards ("SFAS") No. 125, "Accounting for Transfers and Servicing of Financial
Assets and Extinguishment of Liabilities". The Company also recognizes interest
income on notes receivable and other beneficial interests retained in the period
the interest is earned. Servicing revenue, interest income on beneficial
interests retained, and gains on the sale of notes receivable are included in
commercial laundry revenue. Losses on the sale of accounts receivable are
recognized in the period in which such sales occur and are included in selling,
general and administrative expense.

Sales of Accounts Receivable and Notes Receivable (See Notes 6 and 7)

      According to SFAS No. 125, a transfer of financial assets in which the
transferor surrenders control over those assets is accounted for as a sale to
the extent that consideration other than beneficial interests in the transferred
assets is received in exchange. The Company sells a significant portion of
accounts receivable and notes receivable to third parties through
special-purpose bankruptcy remote entities designed to meet the SFAS No. 125
requirements for sale treatment. Accordingly, the Company removed these
receivables from its balance sheet at the time of transfer. Prior to the
Recapitalization, the special-purpose bankruptcy remote entities included
Raytheon Commercial Appliances Receivables Corporation ("RAYCAR") through which
the Company sold eligible trade accounts receivable and Raytheon Commercial
Appliances Financing Corporation ("RAYCAF") through which the Company


                                       36
<PAGE>

sold eligible notes receivable. In connection with the Recapitalization, the
Company established Alliance Laundry Receivables Warehouse LLC ("ALRW"), a
special-purpose bankruptcy remote entity, to which all eligible trade accounts
receivable and eligible notes receivable are sold after May 4, 1998.

      In a subordinated capacity, the Company retains rights to the residual
portion of interest earned on the notes receivable sold. This retained
beneficial interest is recorded at its estimated fair value at the balance sheet
date. Unrealized gains and losses resulting from changes in the estimated fair
value of the Company's retained interests are recorded as other comprehensive
income (loss) in accordance with SFAS No. 125. In determining the gain on sales
of notes receivable, the investment in the sold receivable pool is allocated
between the portion sold and the portion retained, based on their relative fair
values. The Company generally estimates the fair values of its retained
interests based on the present value of expected future cash flows to be
received, using management's best estimate of key assumptions, including credit
losses, prepayment rates, interest rates and discount rates commensurate with
the risks involved.

Inventories

      Inventories are stated at cost using the first-in, first-out method but
not in excess of net realizable value.

Property, Plant and Equipment

      Property, plant and equipment is stated at cost. Betterments and major
renewals are capitalized and included in property, plant and equipment while
expenditures for maintenance and minor renewals are charged to expense. When
assets are retired or otherwise disposed of, the assets and related allowances
for depreciation and amortization are eliminated and any resulting gain or loss
is reflected in other income (expense). When events or changes in circumstances
indicate that assets may be impaired, an evaluation is performed comparing the
estimated future undiscounted cash flows associated with the asset to the
asset's carrying amount, including any related goodwill, to determine if a
write-down is required.

      The straight-line method of depreciation was adopted for all property
placed into service on or after January 1, 1999. For property placed into
service prior to January 1, 1999, depreciation is computed using a combination
of accelerated and straight-line methods. The Company believes the new method
will more appropriately reflect its financial results by better allocating costs
of new property over the useful lives of these assets. The effect of the change
increased net income by approximately $0.2 million in 1999.

      Depreciation provisions are based on the following estimated useful lives:
buildings 40 years; machinery and equipment (including production tooling) 5 to
10 years. Leasehold improvements are amortized over the lesser of the remaining
life of the lease or the estimated useful life of the improvement.


                                       37
<PAGE>

Intangibles

      Goodwill represents the excess of the acquisition cost over the fair value
of the net assets acquired in purchase transactions. Goodwill related to a 1994
acquisition is amortized using the straight line method over approximately 40
years. Goodwill related to the Ajax acquisition (See Note 4) is amortized using
the straight-line method over 20 years. Accumulated amortization was $9.7
million and $7.8 million at December 31, 2000 and 1999, respectively. At each
balance sheet date, the Company evaluates the realizability of goodwill and
other intangibles based on expectations of non-discounted cash flows and
operating income. Based on its most recent analysis, the Company believes that
no impairment of recorded intangibles exists at the balance sheet date.

Debt Issuance Costs

      In conjunction with the Recapitalization, the Company recorded $17.2
million of debt issuance costs. These costs are being amortized on a
straight-line basis over periods ranging from 5 to 10 years. Accumulated
amortization was $6.7 million and $4.1 million at December 31, 2000 and 1999,
respectively.

Warranty Liabilities

      The cost of warranty obligations are estimated and provided for at the
time of sale. Standard product warranties cover most parts for three years and
certain parts for five years. Warranty costs were $3.4 million, $5.3 million and
$3.6 million in 2000, 1999 and 1998, respectively.

Research and Development Expenses

      Research and development expenditures are expensed as incurred. Research
and development costs were $5.8 million, $6.8 million and $8.4 million in 2000,
1999 and 1998, respectively.

Advertising Expenses

      The Company expenses advertising costs as incurred. The Company incurred
advertising expenses of $3.2 million, $3.2 million and $3.1 million in 2000,
1999 and 1998, respectively.

Income Taxes

      Historically, the Company's operations had been included in the
consolidated income tax returns filed by Raytheon. For periods prior to the
Recapitalization, income tax expense in the Company's statement of income was
calculated on a separate tax return basis as if the Company had operated as a
stand-alone entity. The provision for income taxes was calculated in accordance
with SFAS No. 109, "Accounting for Income Taxes", which requires the recognition
of deferred income taxes using the liability method. As a result of the
Recapitalization, the Company is now a stand-alone limited liability company and
is not subject to federal and most state income taxes effective May 5, 1998.

Class B and C Units

      As discussed in Note 3, the Company issued Class B and C Unit interests to
certain members of management in connection with the May 5, 1998
recapitalization transaction. These units were issued for nominal consideration
based upon the subordinated nature of such interests. The Class B and C


                                       38
<PAGE>

Units are considered to represent performance-based compensatory awards for
accounting purposes. Compensation expense will be measured each period based
upon the estimated fair value of all common units and recognized over the
vesting period when it becomes probable that certain target multiples, as
defined, will be achieved. No compensation expense related to these units was
recognized in 2000, 1999 or 1998.

Parent Company Investment

      Prior to the Recapitalization, the Company received short-term funding
from its parent, Raytheon to meet its periodic cash flow needs. No dividends
were paid in 1998. Interest expense associated with Raytheon's general corporate
debt has not been allocated to the Company. Prior to the Recapitalization, the
Company participated in numerous benefit plans of Raytheon (see Note 15).
Certain services were provided to the Company by Raytheon, primarily related to
treasury, taxes, legal and risk management. The estimated costs of such services
have been included in these financial statements. Management believes these
allocations are reasonable. Raytheon provided certain supplemental services to
the Company related primarily to general tax and legal, audit and human
resources which are not material and have been excluded from these financial
statements.

      All transfers to and from Raytheon have been reported in the parent
company investment account.

Fair Value of Financial Instruments

      The carrying amounts reported in the statement of assets, liabilities and
members' deficit for cash and cash equivalents, accounts receivable, and
accounts payable approximate fair value due to the short-term maturity of these
financial instruments. The amounts reported for borrowings under the senior
credit facility approximate fair value since the underlying instruments bear
interest at variable rates that reprice frequently. The fair value of the
Company's senior subordinated notes at December 31, 2000 is estimated based upon
prices prevailing in recent market transactions.

Interest Rate Swaps

      To limit the effect of increases in interest rates, the Company has
entered into an interest rate swap arrangement. The differential between the
contract floating and fixed rates is accrued each period and recorded as an
adjustment of interest expense.

Credit Risk

      Financial instruments that potentially subject the Company to
concentrations of credit risk include trade accounts receivable and notes
receivable. Concentrations of credit risk with respect to trade receivables and
notes receivable are limited, to a degree, by the large number of geographically
diverse customers that make up the Company's customer base, thus spreading the
credit risk. The Company controls credit risk through credit approvals, credit
limits and monitoring procedures.

Certain Concentrations

      As discussed in Note 1, the Company had mutual supply agreements with
Appliance Co. that terminated in 1999. Consumer topload washers sold to
Appliance Co. comprised a substantial percentage of the unit volume of the Ripon
facility and represented approximately 17%, and 23% of net revenues in 1999 and
1998, respectively. Upon the termination of the Appliance Co. Purchase


                                       39
<PAGE>

Agreement at September 17, 1999, the Company experienced a significant decline
in unit volume. This volume decline resulted in an increase in the Company's
average cost per unit, due to, among other factors, unabsorbed manufacturing
overhead and reduced procurement and manufacturing efficiencies.

Future Accounting Changes

      In June 1998, SFAS No. 133, "Accounting for Derivative Instruments and
Hedging Activities" was issued and was effective for all fiscal years beginning
after June 15, 1999. SFAS No. 133 was subsequently amended by SFAS No. 137,
"Accounting for Derivative Instruments and Hedging Activities-Deferral of the
Effective Date of SFAS No. 133," and will now be effective for fiscal years
beginning after June 15, 2000, with early adoption permitted. SFAS No. 133, as
amended, requires the Company to recognize all derivatives as either assets or
liabilities and measure those instruments at fair value. Upon adoption, the
Company will be required to report derivative and hedging instruments at fair
value in the balance sheet and recognize changes in the fair value of
derivatives in net income or other comprehensive income, as appropriate. This
statement will be effective for the Company's first quarter of 2001. Given the
Company's current derivative and hedging activities, the effect of adoption will
not have a material effect on the Company's results of operations or financial
position.

      In October 2000, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards (SFAS) No. 140, "Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities, as replacement
of SFAS No. 125." The Statement revises certain aspects of the current standards
for accounting for securitizations and other transfers of financial assets and
collateral, and requires certain new and expanded disclosures. The Statement is
effective for transfers and servicing of financial assets occurring after March
31, 2001. The Company is in the process of assessing the effects of SFAS No. 140
on its financial statements.

      In October 2000, the Emerging Issues Task Force (EITF) reached a consensus
on Issue No. 99-20, "Recognition of Interest Income and Impairment on Purchased
and Retained Beneficial Interests in Securitized Financial Assets." The
consensus concludes on how a transferor that retains an interest in a
securitization transaction, or an enterprise that purchases a beneficial
interest in securitized financial assets, should account for interest income and
impairment. Issue No. 99-20 is required to be adopted by the Company no later
than the first quarter of 2001. The Company is currently evaluating the effects
of Issue No. 99-20 on its financial statements.

Reclassifications

      Certain amounts in prior year financial statements, as discussed above,
have been reclassified to conform to the current year presentation.

Note 3 - Recapitalization Transaction:

      On May 5, 1998, pursuant to an Agreement and Plan of Merger (the "Merger
Agreement") among Bain/RCL, L.L.C., a Delaware limited liability company ("Bain
LLC"), RCL Acquisitions LLC ("MergeCo"), Raytheon Commercial Laundry LLC and
Raytheon Company ("Raytheon"), MergeCo was merged with and into Raytheon
Commercial Laundry LLC (the "Merger") with Raytheon Commercial Laundry LLC being
the surviving entity. Immediately following the merger Raytheon Commercial
Laundry LLC was renamed to "Alliance Laundry Holdings LLC". Prior to the Merger,
Raytheon owned 100% of the equity securities of Raytheon Commercial Laundry LLC,
and Bain LLC, the BRS Investors (as defined), and certain members of management
owned 100% of the equity


                                       40
<PAGE>

securities of MergeCo. As a result of the Merger (i) Raytheon's limited
liability company interest in Raytheon Commercial Laundry LLC was converted into
the right to receive (a) an aggregate amount of cash equal to $339.5 million,
subject to pre-closing and post-closing adjustments (b) a junior subordinated
promissory note from the Company in the original principal amount of $9.0
million which matures in 2009 (c) preferred membership interests of the Company
with a liquidation value of approximately $6.0 million which are mandatorily
redeemable in 2009 and (d) common membership units of the Company representing
7% of the total common membership interests of the Company and (ii) Bain LLC's,
the BRS Investors' and certain management members' limited liability company
interests in MergeCo were converted into the right to receive up to 93% of the
total common membership interests of the Company.

      Simultaneous with the consummation of the Merger and each of the other
related transactions (the "Closing"), the Company contributed substantially all
of its assets and liabilities to Alliance Laundry Systems LLC, a newly formed
limited liability company ("Alliance Laundry"). Immediately after the
consummation of the transactions, Alliance Laundry became the only direct
subsidiary of the Company and succeeded to substantially all of the assets and
liabilities of the Company. Subsequent to May 4, 1998, Alliance Laundry
comprises all of the operating activities of the Company.

      The transactions contemplated by the Merger Agreement (the "Transactions")
were funded by: (i) $200.0 million of term loan borrowings by Alliance Laundry;
(ii) $110.0 million of senior subordinated notes of Alliance Laundry and
Alliance Laundry Corporation due in 2008 (substantially all of the amounts in
clauses (i) and (ii) were distributed by Alliance Laundry to the Company to fund
the Merger and to fund related fees and expenses); (iii) the issuance by the
Company of a junior subordinated promissory note in the original principal
amount of $9.0 million; (iv) the issuance by the Company of the mandatorily
redeemable preferred membership interests with a liquidation value of $6.0
million; (v) the investors' equity contributions by Bain LLC, the BRS Investors
and certain members of management of $47.1 million and (vi) retained equity of
Raytheon of $3.5 million. Each of the transactions was conditioned upon
consummation of each of the others, and consummation of each of the transactions
occurred simultaneously.

Note 4 - Acquisition of Ajax Product Line

      On March 6, 2000, the Company completed the acquisition of selected assets
of American Laundry Machinery Inc.'s press and finishing equipment division
(d/b/a "Ajax"). Ajax, located in Cincinnati, Ohio, manufactures, designs and
markets a line of presses and finishers serving the drycleaning and industrial
laundry markets. The cash consideration was approximately $13.1 million. The
Company also assumed selective liabilities of approximately $1.2 million related
to the product line and recorded acquisition costs of $0.3 million. Assets
acquired and liabilities assumed have been recorded at their estimated fair
value. The excess of the purchase price over the fair value of the net assets
acquired (goodwill) was approximately $11.0 million and is being amortized on a
straight-line basis over 20 years. The purchase was financed through the
proceeds of trade receivable sales and use of the Revolving Credit Facility. As
part of the Ajax acquisition, the Cincinnati facility was closed, and production
was transferred to the Company's Marianna, Florida manufacturing facility. As
such, a $1.4 million reserve was established in the acquisition opening
balance sheet primarily for employee termination and severance benefit charges.

      The Ajax acquisition has been accounted for by the purchase method of
accounting for business combinations. Accordingly, the accompanying consolidated
statements of income include only revenue and expenses of Ajax for the period
from March 6, 2000. On a pro-forma basis, this acquisition was not


                                       41
<PAGE>

material to the results of operations for the periods presented and,
accordingly, such information is not presented.

Note 5 - Nonrecurring Items:

      During the fourth quarter of 1999, the Company recorded a $2.3 million
restructuring charge, of which $2.1 million was non-cash, associated with the
closing of the Company's Madisonville, Kentucky manufacturing facility. A
decision was made to close the Madisonville facility and transfer production to
the Ripon, Wisconsin manufacturing facility because of the available capacity at
the Ripon facility and the operating synergies that will be recognized. The
charge included $1.7 million in employee termination and severance benefit
charges, $0.5 million for the estimated loss on fixed assets which were held for
disposal, and $0.1 million in miscellaneous costs. Subsequently, in the third
quarter of 2000, this reserve was increased by $0.4 million due to additional
medical benefits provided as part of the employee terminations.

      The non-cash portion of employee termination and severance benefits
relates to plan curtailment losses recognized in connection with 1999 workforce
reductions and the portion of supplemental termination benefits to be funded out
of the Company's overfunded pension plans (see Note 15).

<TABLE>
<CAPTION>
                                                                                                                       Balance at
                                                               1999                                 Utilized          December 31,
                                                              Charge              Cash              Non-cash              1999
                                                             -------            -------             --------          ------------
<S>                                                          <C>                <C>                 <C>                 <C>
Write-down of fixed assets ...........................       $   485            $    --             $  (485)            $    --
Employee termination and severance benefits ..........         1,739                (20)             (1,640)                 79
Other ................................................            31                 --                  --                  31
                                                             -------            -------             -------             -------
  Total ..............................................       $ 2,255            $   (20)            $(2,125)            $   110
                                                             =======            =======             =======             =======

<CAPTION>
                                                            Balance at                               Reallocation  Balance at
                                                            December 31,                 Utilized    and Reserve   December 31,
                                                                1999         Cash        Non-cash      Addition       2000
                                                            ------------    -------      --------    ------------  ------------
<S>                                                            <C>          <C>           <C>          <C>            <C>
Write-down of fixed assets ............................        $  --        $  --         $ 265        $(265)         $ --
Employee termination and severance benefits ...........           79         (777)           --          698            --
Other .................................................           31           --            --          (31)           --
                                                               -----        -----         -----        -----          ----
   Total .................................................     $ 110        $(777)        $ 265        $ 402          $ --
                                                               =====        =====         =====        =====          ====
</TABLE>

      During the fourth quarter of 1998, the Company recorded a $4.5 million
restructuring charge associated with the closing of the Company's Latin American
coin laundromat operations. A decision was made to close these operations
because of continued unprofitable performance. The charge included $1.5 million
for the estimated loss on the sale of company-owned drycleaning and laundry
stores representing the excess of the carrying value of assets relating to these
stores over estimated proceeds from sale, $1.4 million for the write-off of the
unamortized balance of the LaveRap tradename and franchise rights which were
purchased in 1996 for use in developing coin laundromats in Latin America, $0.9
million for severance and related benefits arising from the termination of 41
employees and $0.7 million for certain other expenses associated with
discontinuing the Latin American operations. The Company's planned actions were
substantially completed by December 31, 1999. The carrying value of remaining
assets held for disposal at December 31, 2000 is not material. At December 31,
2000, the


                                       42
<PAGE>

Company had one store remaining and remaining reserves of approximately $0.1
million are expected to be adequate to provide for related costs.

      The Company's Latin American operations generated no net revenue or
operating profit for the twelve months ended December 31, 2000. The Latin
American operations generated net revenue of $0.2 million and $2.4 million, and
an operating loss of $0.2 million and $1.6 million for the twelve months ended
December 31, 1999 and 1998, respectively.

      The Company entered into retention agreements with certain key executives,
managers and commissioned sales people prior to the Recapitalization. During
1999 and 1998, the Company incurred approximately $1.5 million and $2.3 million,
respectively, in expense associated with payments under these agreements.
Payments under this program were completed in November of 1999.

Note 6 - Customer Financing and Sales of Notes Receivable:

General

      Since 1992, the Company offered a variety of equipment financing programs
(capital leases) to assist customers in financing equipment purchases. These
capital leases were transferred immediately to third parties who administer the
contracts and earn all associated interest revenue ("External Financing"). These
External Financings have terms ranging from 2 to 9 years and carry market
interest rates as set by the third-party lender. These third parties have
recourse against the Company ranging from 15% to 100%. At December 31, 2000 and
1999, the uncollected balance of leases with recourse under these programs was
$4.4 million and $11.4 million, respectively. In connection with the
Recapitalization, Raytheon agreed to indemnify the Company for any recourse
obligations arising from these programs.

      In 1996, the Company established an internal financing organization to
originate and administer promissory notes for financing of equipment purchases
and laundromat operations. These notes typically have terms ranging from Prime
plus 1% to Prime plus 3% for variable rate notes and 9.0% to 15.8% for fixed
rate notes. The average interest rate for all notes at December 31, 2000
approximates 11.2% with terms ranging from 2 to 7 years. All notes allow the
holder to prepay outstanding principal amounts without penalty, and are
therefore subject to prepayment risk.

Funding Facilities

      In connection with the Transactions, the Company entered into a five year
$250.0 million revolving loan agreement (the "Asset Backed Facility") through
ALRW, its special-purpose single member limited liability company, to finance
trade receivables and notes receivable related to equipment loans with Lehman
Commercial Paper, Inc. (the "Facility Lender"), an affiliate of Lehman Brothers,
Inc. The Asset Backed Facility is a $250.0 million facility, with sublimits of
$100.0 million for loans on eligible trade receivables and $200.0 million for
loans on eligible equipment loans. With respect to loans secured by equipment
loans, the Facility Lender will make loans up to but not exceeding the lesser of
90% of the outstanding principal balance of eligible equipment loans or 90% of
the market value with respect to eligible equipment loans, as determined by the
Facility Lender in its reasonable discretion. The eligibility of both trade
receivables and equipment loans is subject to certain concentration and other
limits. In addition, after 24 months in the Asset Backed Facility, an otherwise
eligible equipment loan will no longer be considered an eligible equipment loan,
subject to two automatic six-month extensions upon payment of a fee if such
equipment loans have not been securitized or otherwise disposed of by


                                       43
<PAGE>

ALRW. The interest rate of loans under the Asset Backed Facility is generally
equal to one-month LIBOR plus 1.0% per annum. The Company as servicing agent
retains collection and administrative responsibilities for the notes sold. The
Company sold $95.1 million and $85.9 million of notes under this agreement
during 2000 and 1999, respectively. The amount of uncollected balances on
equipment loans sold to ALRW was $40.4 million and $110.2 million at December
31, 2000 and 1999, respectively.

      ALRW provides additional credit enhancement to the Facility Lender
(consisting of an irrevocable letter of credit, an unconditional lending
commitment of the Lenders under the Senior Credit Facility or a cash collateral
account) in an amount not to exceed 10% of the aggregate principal amount of
loans outstanding under the Asset Backed Facility up to $125.0 million and 5% of
the aggregate principal amount of loans outstanding above $125.0 million. The
Company is obligated under the reimbursement provisions of the Senior Credit
Facility to reimburse the Lenders for any drawings on the credit enhancement by
the Facility Lender. If the credit enhancement is not replenished by the Company
after a drawing, the Facility Lender will not be obligated to make further loans
under the Asset Backed Facility and the Asset Backed Facility will begin to
amortize. In addition, at any time when (i) the aggregate principal amount of
loans outstanding under the Asset Backed Facility exceeds $125.0 million and
(ii) the delinquency or default ratios with respect to trade receivables or
equipment loans exceed certain specified levels (an "Excess Spread Sweep
Event"), and for four months after a cure of such excess delinquency or default
ratios, the collections on the equipment loans (after payment of accrued
interest on the loans under the Asset Backed Facility) will be directed into an
excess spread sweep account in the name of the Facility Lender until the amount
on deposit in such account is equal to five percent of the aggregate principal
amount of loans outstanding under the Asset Backed Facility.

      Early repayment of the loans under the Asset Backed Facility will be
required upon the occurrence of certain "events of default," which include: (i)
default in the payment of any principal of or interest on any loan under the
Asset Backed Facility when due, (ii) the bankruptcy of ALRW, Alliance Laundry or
the issuer of the letter of credit or provider of the line of credit, (iii) any
materially adverse change in the properties, business, condition or prospects
of, or any other condition which constitutes a material impairment of ALRW's
ability to perform its obligations under the Asset Backed Facility and related
documents, (iv) specified defaults by ALRW or Alliance Laundry on certain of
their respective obligations, (v) delinquency, dilution or default ratios on
pledged receivables exceeding certain specified ratios in any given month, (vi)
the ratio of (a) the indebtedness of Alliance Laundry and its subsidiaries minus
indebtedness subordinated to the loans under the Asset Backed Facility to (b)
the sum of the tangible net worth of Alliance Laundry and its subsidiaries and
the amount of debt subordinated to the loans under the Asset Backed Facility
exceeding a specified amount and (vii) a number of other specified events.

      Under these arrangements the Company acts as servicer or sub-servicer of
the accounts receivable and notes receivable sold. As such, the Company
continues to administer and collect amounts outstanding on such receivables. At
December 31, 2000 and December 31, 1999, the Company had collected approximately
$0.5 million and $0.8 million, respectively, of notes receivable which were
subsequently transferred to the buyers through a monthly settlement process. At
the balance sheet dates, these amounts were recorded as finance program
obligations.

      Prior to the Transactions, the Company through its special-purpose
bankruptcy remote entity, RAYCAF, had entered into an agreement with Falcon
Asset Securitization Corporation (the "Bank"), a wholly-owned subsidiary of
First Chicago/NBD, under which it sold defined pools of notes receivable. Under
the terms of the agreement with the Bank, the Bank is paid interest based on the
30-day commercial paper rate plus 0.3% and has recourse against the Company
ranging from 15% to 100%.


                                       44
<PAGE>

The Company, as servicing agent, retains collection and administrative
responsibilities for the notes. In 1998 under this financing program, the
Company sold $28.7 million. Notes were no longer sold under this program after
May 4, 1998. The total amount uncollected at December 31, 2000 and 1999, was
$36.1 million and $57.2 million, respectively.

Sales of Notes Receivable

      Gains on sales of notes receivable and other finance program income in
2000, 1999, and 1998 of approximately $7.3 million, $7.4 million, and $7.7
million, respectively, is included in commercial laundry revenue. At December
31, 2000 and 1999, the Company has included in notes receivable $4.0 million and
$11.0 million, respectively, related to its retained interest in notes sold to
ALRW. In addition, at December 31, 2000 and 1999, included in other assets is
$3.3 million and $6.6 million, respectively, related to the Company's beneficial
interest in the residual portion of interest earned on notes sold to ALRW.

      Pursuant to the terms of the Asset Backed Facility, effective November 28,
2000, the Company, through a new-formed wholly-owned subsidiary, Alliance
Laundry Equipment Receivables LLC ("ALER") and Alliance Laundry Equipment
Receivable Trust 2000-A ("ALERT"), a trust formed by ALER, completed the
securitization of $137.8 million of loans held by ALRW. The transaction was
financed by the issuance of $128.2 million of equipment loan backed notes issued
by ALERT and certain interests retained by the Company. Proceeds from the
issuance of the notes by ALERT were used by ALRW to repay amounts outstanding
under the Asset Backed Facility, with the balance received by the Company in
settlement of its related retained interests in ALRW. The Company recognized a
loss on these related transactions in the fourth quarter of 2000 of $3.1
million, reflecting primarily transaction costs incurred of approximately $1.6
million and the difference between the recorded fair values of assets relating
to the cash reserve account established in connection with the transaction and
the original amount funded by the Company of $2.4 million. The amount related to
the cash reserve account reflects the estimated present value of amounts to be
released to the Company from the account based upon the distribution priorities
established in connection with the transaction as compared to the amount funded.
The Company holds all of the residual equity interests of the trust, which it
does not consolidate based upon its special-purpose bankruptcy remote status,
and is paid a servicing fee equal to 1.0% of the aggregate balance of loans held
by the trust.

      Key economic assumptions used in measuring retained interests at the date
of transfer resulting from sales of notes receivable completed during the year
ended December 31, 2000 were as follows:

Average Prepayment speed (per annum)         25.25%

Weighted-average life (in months)             34.4

Expected credit losses (per annum)             0.6%

Residual cash flows discounted at     12.0% - 14.0%

      At December 31, 2000 key economic assumptions and the sensitivity of the
current fair value estimates of residual cash flows to immediate 10 percent and
20 percent adverse changes in those assumptions are as follows:


                                       45
<PAGE>

Carrying amount / fair value of retained interests                    $  21,388

Prepayment speed assumption:
   Impact on fair value of 10% adverse change                               213
   Impact on fair value of 20% adverse change                               427

Expected credit losses:
   Impact on fair value of 10% adverse change                               174
   Impact on fair value of 20% adverse change                               348

Residual cash flow discount rate:
   Impact on fair value of 10% adverse change                               409
   Impact on fair value of 20% adverse change                               803

      These sensitivities are hypothetical and the effect of a variation in a
particular assumption on the estimated fair value of retained interests is
calculated without changing any other assumptions; in reality, changes in one
factor may result in changes in another, which may magnify or counteract the
sensitivities.

      The table below summarizes certain information regarding the Company's
equipment loan portfolio, delinquencies, and cash flows received from and paid
to the Company's special-purpose securitization entities:

                                              December 31, 2000
                                 --------------------------------------------
                                                     Principal Amount of Loans
                                 Principal Amount    60 Days or More Past Due
                                 ----------------    ------------------------
Total portfolio ..........          $209,848               $  5,038
Less loans sold ..........           203,683                  1,348
                                    --------               --------
Loans held ...............          $  6,165               $  3,690
                                    ========               ========

                                                              For the year ended
                                                              December 31, 2000
                                                              ------------------
Proceeds from sales of loans to ALRW.........................           $85,572
Purchase of delinquent or foreclosed assets .................            (2,989)
Servicing fees and other net cash flows received on
 retained interests .........................................            16,227

      The Company's net credit losses as a percentage of average loans
outstanding during 2000 and 1999 were 0.37% and 0.42%, respectively.

Note 7 - Sales of Accounts Receivable:

      As described in Note 6 above, in connection with the Transactions, the
Company entered into the Asset Backed Facility through ALRW to finance trade
receivables and notes receivable related to equipment loans. With respect to
loans secured by trade receivables, the Facility Lender will make loans up to
but not exceeding 85% of the outstanding amount of eligible trade receivables.
The interest rate of loans under the Asset Backed Facility is generally equal to
one-month LIBOR plus 1.0% per annum.


                                       46
<PAGE>

The Company as servicing agent retains collection and administrative
responsibilities for the accounts receivable sold. Under this agreement, the
Company sold $299.4 million and $325.0 million of accounts receivable during
2000 and 1999, respectively. The total amount of uncollected balances on trade
accounts receivable sold at December 31, 2000 and 1999 totaled $44.3 million and
$33.2 million, respectively.

      Prior to the Transactions, the Company had entered into an agreement
through its special-purpose bankruptcy remote entity, RAYCAR, with the Preferred
Receivables Funding Corporation, a wholly-owned subsidiary of First Chicago/NBD
to sell certain defined pools of trade accounts receivable. Under the terms of
the agreement, interest was charged based on the 30-day commercial paper rate
plus 0.3%. The interest rates were adjusted based on Raytheon's debt rating. The
Company, as servicing agent, retained collection and administrative
responsibility for the accounts receivable. Under this agreement, the Company
sold $92.2 million of accounts receivable in 1998. Accounts receivable were no
longer sold under this agreement after May 4, 1998. No receivables under this
agreement were uncollected as of December 31, 1999 or December 31, 2000.

      Losses on sales of trade accounts receivable and related expenses of $3.8
million, $2.6 million and $4.1 million in 2000, 1999 and 1998, respectively, are
included in selling, general and administrative expense. The Company's retained
interest in trade accounts receivable sold to ALRW, which is included in other
current assets, at December 31, 2000 and 1999 is $6.9 million and $5.1 million,
respectively.

Note 8 - Inventories:

    Inventories consisted of the following at:

                                                           December 31,
                                                   ----------------------------
                                                     2000                1999
                                                   --------            --------
Materials and purchased parts ..........           $ 13,250            $ 14,506
Work in process ........................              4,907               3,688
Finished goods .........................             21,895              16,736
Less: inventory reserves ...............             (2,590)             (3,648)
                                                   --------            --------
                                                   $ 37,462            $ 31,282
                                                   ========            ========

Note 9 - Property, Plant and Equipment:

    Property, plant and equipment consisted of the following at:


                                       47
<PAGE>

                                                            December 31,
                                                   ----------------------------
                                                     2000               1999
                                                   ---------          ---------

Land .....................................         $     767          $     767
Buildings and leasehold improvements .....            25,132             27,529
Machinery and equipment ..................           144,692            144,978
                                                   ---------          ---------
                                                     170,591            173,274
Less: accumulated depreciation ...........          (123,168)          (117,788)
                                                   ---------          ---------
                                                      47,423             55,486
Construction in process ..................             6,434              2,129
                                                   ---------          ---------
                                                   $  53,857          $  57,615
                                                   =========          =========

    Depreciation expense was $12.2 million, $12.5 million and $13.3 million for
the years ended December 31, 2000, 1999 and 1998, respectively.

Note 10 - Other Current Liabilities:

      The major components of other current liabilities consisted of the
following at:

                                                                December 31,
                                                          ----------------------
                                                           2000            1999
                                                          -------        -------
Warranty reserve ..................................       $ 4,790        $ 5,504
Accrued sales promotion and cooperative advertising         3,224          3,871
Salaries, wages and other employee benefits .......         3,189          4,909
Accrued interest ..................................         2,893          2,817
Other current liabilities .........................         4,370          4,704
                                                          -------        -------
                                                          $18,466        $21,805
                                                          =======        =======

Note 11 - Debt:

    Debt consisted of the following at:

                                                           December 31,
                                                -------------------------------
                                                  2000                   1999
                                                ---------             ---------
Term loan facility .................            $ 199,500             $ 200,000
Senior subordinated notes ..........              110,000               110,000
Junior subordinated note ...........               14,343                12,048
Revolving credit facility ..........               12,000                    --
Other long-term debt ...............                  762                    --
Gross long-term debt ...............              336,605               322,048
Less: current portion ..............              (13,036)                 (500)
                                                ---------             ---------
                                                $ 323,569             $ 321,548
                                                =========             =========


                                       48
<PAGE>

Senior Credit Facility

      In connection with the Transactions, the Company entered into a credit
agreement (the "Senior Credit Facility") with a syndicate of financial
institutions (the "Lenders") for which Lehman Brothers, Inc. acted as arranger
and Lehman Commercial Paper, Inc. acted as syndication agent. The Senior Credit
Facility is comprised of a term loan facility aggregating $200.0 million (the
"Term Loan Facility") and a five year $75.0 million revolving credit facility
(the "Revolving Credit Facility"), which was made available in conjunction with
the issuance of the Company's senior subordinated notes. The Term Loan Facility
requires no principal payments during the first two years followed by payments
of $250,000 per quarter for years three through five, beginning September 2000,
$40.0 million for year six and $157.0 million for year seven. The Company is
required to make prepayments with the proceeds from the disposition of certain
assets and from excess cash flow, as defined. No excess cash flow payment was
required for 2000.

      The Term Loan Facility bears interest, at the Company's election, at
either the Lenders' Base Rate plus a margin ranging from 1.125% to 1.625% or the
Eurodollar Rate plus a margin ranging from 2.125% to 2.625%. The Revolving
Credit Facility bears interest, at the Company's election, at either the Base
Rate plus a margin ranging from 0.625% to 1.375% or the Eurodollar Rate plus a
margin ranging from 1.625% to 2.375%.

      The interest rate on borrowings outstanding at December 31, 2000 and 1999
was 9.2% and 8.8%, respectively. Borrowings outstanding under the Senior Credit
Facility are secured by substantially all of the real and personal property of
the Company and its domestic subsidiaries (other than the financing
subsidiaries).

      Effective March 10, 1999, the Company entered into a $67 million interest
rate swap agreement with a financial institution to hedge a portion of its
interest rate risk related to its term loan borrowings under the Senior Credit
Facility. Under the swap, which has a term of three years, the Company pays a
fixed rate of 4.962% and receives quarterly interest payments based upon LIBOR.
The differential between the fixed and floating interest rates under the swap is
accrued and is recorded as an adjustment of interest expense. The effect of this
agreement on the Company's interest expense during 2000 was a reduction of $1.0
million. The fair value of this interest rate swap agreement which represents
the amount that the Company would receive to settle the instrument is $0.7
million at December 31, 2000. The Company is exposed to credit loss in the event
of non-performance by the financial institution. However, management does not
anticipate such non-performance.

Senior Subordinated Notes

      Also on May 5, 1998, the Company and its wholly-owned subsidiary, Alliance
Laundry Corporation, issued $110.0 million of 9 5/8% senior subordinated notes
due in 2008 (the "Notes") to Lehman Brothers, Inc. and Credit Suisse First
Boston Corporation (the "Initial Purchasers"). The Initial Purchasers
subsequently resold the Notes to qualified institutional buyers pursuant to Rule
144A of the Securities and Exchange Act and to a limited number of institutional
accredited investors that agreed to comply with certain transfer restrictions
and other conditions.

      The Notes are general unsecured obligations and are subordinated in right
of payment to all current and future senior debt, including permitted borrowings
under the Senior Credit Facility.


                                       49
<PAGE>

      Interest on the Notes accrues at the rate of 9 5/8% per annum and is
payable semi-annually in arrears on May 1 and November 1, commencing on November
1, 1998. The fair value of the Notes at December 31, 2000 and 1999 was
approximately $82.5 million and $93.5 million, respectively, based upon prices
prevailing in recent market transactions.

      The Notes are not redeemable prior to May 1, 2003. Thereafter, the Notes
are subject to redemption at any time at the option of the Company, in whole or
in part, upon not less that 30 nor more than 60 days notice, at the redemption
prices (expressed as percentages of principal amount) set forth below plus
accrued and unpaid interest thereon, if any, to the applicable redemption date,
if redeemed during the twelve-month period beginning on May 1 of the years
indicated below:

                  Year                           Redemption Price
                  ----                           ----------------
                  2003  ......................      104.813%
                  2004  ......................      103.208%
                  2005  ......................      101.604%
                  2006 and thereafter.........      100.000%

      Notwithstanding the foregoing, at any time prior to May 1, 2001, the
Company may on any one or more occasions redeem up to 35% of the aggregate
principal amount of the Notes at a redemption price of 109.625% of the principal
amount thereof, plus accrued and unpaid interest thereon, if any, to the
redemption date, with the net cash proceeds of any equity offerings, as defined
by the indenture governing the Notes; provided that at least 65% of the
aggregate principal amount of Notes remains outstanding immediately after each
occurrence of such redemption; and provided, further, that each such redemption
shall occur within 45 days of the date of the closing of such equity offering.

      The Company is required under the terms of the Notes to offer to redeem
the Notes at a redemption price of 101% of the principal amount thereof, plus
accrued and unpaid interest thereon, if any, to the redemption date, upon a
change of control, as defined. Further, the Company is required to offer to
redeem the Notes at a redemption price of 100% of the principal amount thereof
plus accrued and unpaid interest thereon, if any, to the redemption date, when
the amount of excess proceeds from asset sales, as defined, exceeds $10 million,
up to the maximum principal amount that may be purchased out of such excess
proceeds.

      In connection with the Merger, as discussed above, Alliance Laundry and
its wholly-owned subsidiary, Alliance Laundry Corporation, issued the $110.0
million senior subordinated notes. Alliance Laundry Corporation was incorporated
for the sole purpose of serving as a co-issuer of the Notes in order to
facilitate their issuance. Alliance Laundry Corporation does not have any
substantial operations or assets of any kind. Alliance Laundry Holdings LLC has
provided a full and unconditional guarantee of the Notes and has no operating
activities independent of Alliance Laundry.

Junior Subordinated Promissory Note

      Upon the consummation of the Merger, the Company issued a junior
subordinated promissory note (the "Junior Note") in the principal amount of $9.0
million due August 21, 2009, to Raytheon. Pursuant to the terms of the Junior
Note, interest accrues at the rate of 19.0% per annum until the eighth
anniversary of the date of issuance of the Junior Note and at a rate of 13.0%
thereafter. The Junior Note is subordinated in priority and subject in right and
priority of payment to certain indebtedness described therein. Interest which
accrues on the Junior Note is payable in-kind.

Other Debt


                                       50
<PAGE>

      On August 3, 2000, the Company received $750,000 in borrowings, evidenced
by a promissory note, pursuant to a Wisconsin Community Development Block Grant
Agreement (the "Agreement") dated July 10, 2000 between the Wisconsin Department
of Commerce, Alliance Laundry and Fond du Lac County, Wisconsin. The promissory
note bears interest at an annual rate of 4%, with monthly payments of interest
and principal commencing July 1, 2001 with the final installment paid on June 1,
2010, subject to the covenants of the Agreement.

      The Senior Credit Facility and the indenture governing the Notes contain a
number of covenants that, among other things, restrict the ability of the
Company to dispose of assets, repay other indebtedness (including, in the case
of the Senior Credit Facility, the Notes), incur liens, make capital
expenditures and make certain investments or acquisitions, engage in mergers or
consolidation and otherwise restrict the activities of the Company. In addition,
under the Senior Credit Facility, the Company will be required to satisfy
specified financial ratios and tests, including a maximum of total debt to
EBITDA (earnings before interest, income taxes, depreciation and amortization)
and a minimum interest coverage ratio.

      The aggregate scheduled maturities of long-term debt, excluding Revolving
Credit Facility borrowings, in subsequent years are as follows:

            2001             $  1,036
            2002                1,075
            2003               20,578
            2004               98,581
            2005               78,585
            Thereafter        124,750
                             --------
                             $324,605
                             ========

Note 12 - Income Taxes:

      Prior to May 5, 1998, the Company's financial statements reflect a
provision for federal, state and foreign income taxes based on income as if the
Company had been subject to income tax on a separate return basis. The charge
was computed in accordance with SFAS No. 109 and the charge was based on current
tax rates. Effective May 5, 1998, in connection with the Transactions, the
Company became a stand-alone limited liability company and is no longer subject
to federal and most state income taxes.

                                              Years Ended December 31,
                                              2000       1999      1998
                                            -------    -------   -------
      Current income tax expense:
          Federal and foreign                 $   -      $   -   $ 1,809
          State                                  20         29       402
                                            -------    -------   -------
                                                 20         29     2,211
      Deferred income tax expense                 -          -       180
                                            -------    -------   -------
      Income tax provision                    $  20      $  29   $ 2,391
                                            =======    =======   =======

      The provision for income taxes differs from the U.S. Federal statutory
rate due primarily to the change to a non-tax paying entity effective May 5,
1998. Current income tax expense amounts in 1998 are included as a transfer to
Raytheon, in the parent company investment account. Deferred tax account
balances which existed at the date of the Merger were transferred to Raytheon as
part of the Recapitalization.


                                       51
<PAGE>

Note 13 - Mandatorily Redeemable Preferred Equity and Members' Equity:

      The following table summarizes the authorized, issued and outstanding
preferred and common units by class and the related dollar amounts for each
class as of May 5, 1998. During the year ended December 31, 1998, the only
activity relating to the preferred and common units was the issuance of such
units in connection with the Recapitalization. Certain members of management
entered into promissory notes totaling $1.8 million to help finance the purchase
of the common units. During the year ended December 31, 2000, $0.3 million of
the promissory notes were repaid to the Company.

                                                         Units         Dollars
                                                       ---------     -----------
Preferred Units .......................                 6,000.00     $ 6,000,000
Common Units:
  Class A .............................                50,645.16     $ 5,064,516
  Class B .............................                 3,232.67              32
  Class C .............................                 3,439.01              34
  Class L .............................                 5,627.24      45,580,645
                                                       ---------     -----------
Total Common Units ....................                62,944.08      50,645,227
                                                       =========
Management Investor Promissory Notes ..                                1,762,901
                                                                     -----------
Net Proceeds ..........................                              $48,882,326
                                                                     ===========

      Bain LLC, the BRS Investors, certain management investors and Raytheon
(collectively, the "Members") have entered into an Amended and Restated Limited
Liability Company Agreement (the "LLC Agreement"). The LLC Agreement governs the
relative rights and duties of the Members.

      The ownership interests of the Members in the Company consist of preferred
units (the "Preferred Units") and common units (the "Common Units"). Holders of
the Preferred Units are entitled to a return of capital contributions prior to
any distributions made to holders of the Common Units. The Common Units
represent the common equity of the Company.

      Preferred Units - Upon consummation of the Merger, the Company issued
mandatorily redeemable preferred membership interests (the "Seller Preferred
Equity") with a liquidation value of $6.0 million to Raytheon. The Seller
Preferred Equity does not accrete, accrue or pay dividends and is redeemable at
the earlier of (i) a change of control (as defined in the LLC Agreement), (ii)
any initial public offering or (iii) 2009. The holders of the Seller Preferred
Equity are entitled to receive distributions from the Company in an amount equal
to their unreturned capital (as defined in the LLC Agreement) prior to
distributions in respect of any other membership interests of the Company.

      Common Units - The Common Units of the Company are divided into the
following four classes:

      Class L Units - These units provide a yield of 12% on the unreturned
capital and unpaid yield (as defined), compounded quarterly. Such accumulated
and unpaid amounts totaled $16.9 million and $9.9 million at December 31, 2000
and 1999, respectively. Class L Units do not provide any voting rights to the
holders.


                                       52
<PAGE>

      Class A Units - These units are the primary vehicle of equity ownership in
the Company. Class A Units are the only units that provide voting rights.
Decisions made by a majority of the voting holders of Class A Units are binding
on the Company, provided that members holding at least 20% of the Class A Units
are present.

      Class B and C Units - Class B Units and Class C Units do not provide any
voting rights to the holders. These units are not eligible to receive
distributions until the Company achieves the defined target multiple applicable
to each class of units. The target multiple is calculated as the sum of all
distributions to all holders of Class L and Class A Units divided by the sum of
all capital contributions made by such holders. Class B Units become eligible to
receive distributions when vested and the target multiple reaches or exceeds 1.0
and the Class C Units become eligible when vested and the target multiple
reaches or exceeds 3.0. Pursuant to agreements entered into with the members of
management who participated in the purchase of membership interests (see Note
16), the Class B and Class C Units vest ratably from the Closing to May 5 of
each year through 2003. Such agreements also provide for accelerated vesting in
certain circumstances.

      Distributions - Subject to any restrictions contained in any financing
agreements to which the Company or any of its affiliates (as defined in the LLC
Agreement) is a party, the Board of Managers (the "Board") may make
distributions, whether in cash, property, or securities of the Company, at any
time in the following order of priority:

      First, to the holders of Preferred Units, an amount determined by the
           aggregate unreturned capital.

      Second, to the holders of Class L Units, the aggregate unpaid yield
           accrued on such Class L Units.

      Third,to the holders of Class L Units, an amount equal to the aggregate
            unreturned capital.

      Fourth, ratably to the holders of Common Units, an amount equal to the
           amount of such distribution that has not been distributed pursuant to
           the clauses described above.

The Company may distribute to each holder of units within 75 days after the
close of each fiscal year such amounts as determined by the Board to be
appropriate to enable each holder of units to pay estimated income tax
liabilities. There were no distributions to holders of units during 2000.

      Allocations - Profits and losses of the Company are allocated among the
various classes of units in order to adjust the capital accounts of such holders
to the amount to be distributed upon liquidation of the Company.

      Restrictions on transfer of securities - No holder of securities may sell,
assign, pledge or otherwise dispose of any interest in the holder's securities
except that (i) Bain LLC may transfer its securities to other security holders
in the same class, (ii) holders may transfer their securities through applicable
laws of descent and distribution, (iii) transfers of securities may be made to
an affiliate, and (iv) Raytheon may transfer its Preferred Units with the
consent of the Board.

Note 14 - Commitments and Contingencies:


                                       53
<PAGE>

      At December 31, 2000, the Company had commitments under long-term
operating leases requiring approximate annual rentals in subsequent years as
follows:

                  2001             $ 373
                  2002               232
                  2003               193
                  2004                52
                  2005                 4
                  Thereafter           -
                                   -----
                                   $ 854
                                   =====

      Rental expense for 2000, 1999 and 1998 amounted to $2.0 million, $1.7
million and $1.5 million, respectively.

      The Company's Marianna, Florida plant is located on property leased from
the Marianna Municipal Airport Development Authority (acting on behalf of the
City of Marianna). The lease expires on February 28, 2005 and may be renewed at
the Company's option for five additional consecutive ten year terms.

      The Company and its operations are subject to comprehensive and frequently
changing federal, state and local environmental and occupational health and
safety laws and regulations, including laws and regulations governing emissions
of air pollutants, discharges of waste and storm water and the disposal of
hazardous wastes. The Company is also subject to liability for the investigation
and remediation of environmental contamination (including contamination caused
by other parties) at the properties it owns or operates and at other properties
where the Company or predecessors have arranged for the disposal of hazardous
substances. As a result, the Company is involved, from time to time, in
administrative and judicial proceedings and inquiries relating to environmental
matters. There can be no assurance that the Company will not be involved in such
proceedings in the future and that the aggregate amount of future clean-up costs
and other environmental liabilities will not have a material adverse effect on
the Company's business, financial position and results of operations. However,
in the opinion of management, any liability related to matters presently pending
will not have a material effect on the Company's financial position, liquidity
or results of operations after considering provisions already recorded.

      Pursuant to the Merger Agreement, and subject to a three year notice
period following the Closing, Raytheon has agreed to indemnify the Company for
certain environmental liabilities in excess of $1.5 million in the aggregate
arising from the operations of the Company and its predecessors prior to the
Merger, including with respect to environmental liabilities at the Ripon and
Marianna facilities. In addition to the Raytheon indemnification, with respect
to the Marianna, Florida facility, a former owner of the property has agreed to
indemnify the Company for certain environmental liabilities. In the event that
Raytheon or the former owner fail to honor their respective obligations under
these indemnifications, such liabilities could be borne directly by the Company
and could be material.

      In April 1998, Amana Company, L.P. ("Appliance Co.") filed suit in the
United States District Court for the Southern District of New York seeking, in
pertinent part, to prohibit the Company from competing in the U.S. consumer
retail distribution laundry market until July 2012. The Company currently does
not participate in this market. In June 1998, Appliance Co. added allegations
asserting that the Company, Alliance Laundry and Bain Capital, Inc. had
tortiously interfered with the non-compete agreement that Appliance Co. claimed
that Alliance Laundry had inherited from Raytheon. In January 1999, Appliance
Co. added claims against Raytheon and the Company in connection with the Horizon
washing machine, a "single-pocket" frontload washing machine that was being
readied for


                                       54
<PAGE>

volume production as of the time when Raytheon (the former parent of the
Company) was completing the sale of its consumer appliances business to
Appliance Co. (the "Appliance Co. Transaction"). In January 1999, Alliance
Laundry filed a counterclaim against Appliance Co. seeking payment of sums owed
for certain top-load washing machines and parts sold pursuant to a Supply
Agreement between the companies. In May 1999, Appliance Co. filed a Reply
Counterclaim for breach of the Supply Agreement. In October 1999, Appliance Co.
added another claim that sought to revise the cross-license agreement between
the two companies to restrict the degree to which the Company can use
intellectual property whose ownership was retained by the Company as part of the
1997 transaction between Appliance Co. and Raytheon to compete against Appliance
Co. in the U.S. consumer retail distribution laundry market.

      In December 1999, the parties to this lawsuit agreed to settle all of
their claims, and all claims in the action against all parties were dismissed
with prejudice. Under the terms of the settlement agreement, the Company will be
allowed to compete in the U.S. home laundry market beginning in October 2004.
The Company will also be permitted to compete in the U.S. home laundry market
beginning in October 2004 with both the intellectual property whose ownership
was retained by the Company as part of the 1997 transaction between Appliance
Co. and Raytheon and the intellectual property that was cross-licensed to the
Company by Appliance Co. pursuant to the cross-license agreement. Likewise,
Appliance Co. will be permitted to compete against the Company in the commercial
laundry market beginning in October 2004 and will be able to do so using both
the intellectual property that Appliance Co. acquired as part of the Appliance
Co. Transaction and the intellectual property to which Alliance received a
cross-license under the cross-license agreement. Additionally, pursuant to the
terms of the settlement agreement, Appliance Co. satisfied all outstanding
invoices owed to the Company for certain top-load washing machines and parts
sold pursuant to the Supply Agreement between the companies, and the Company was
required to pay Appliance Co. $3.0 million for certain Appliance Co.
manufactured inventory. The Company estimates that such inventory has a net
realizable value of approximately $1.7 million and recorded the difference ($1.3
million) as a legal settlement cost in other income (expense), net in 1999.

      On February 8, 1999, Raytheon commenced an arbitration under the
Commercial Arbitration Rules of the American Arbitration Association in Boston,
Massachusetts against the Company, seeking damages of $12.2 million plus
interest thereon and attorney's fees for breach of the Merger Agreement based on
Raytheon's claim for indemnification for a payment made to a third party
allegedly on behalf of the Company and Alliance Laundry following the Closing.
An arbitration was conducted pursuant to the terms of the Merger Agreement
("Arbitration"). The Company asserted in the Arbitration that Raytheon owed the
$12.2 million to the third party and that neither the Company nor Alliance
Laundry was liable for such amount. In addition, the Company and Bain LLC filed
counterclaims and claims seeking damages in excess of $30 million from Raytheon.
On March 31, 2000, the Arbitrators issued their decision. Pursuant to that
decision Raytheon prevailed on its claim and the Company and Bain LLC prevailed
on its counterclaims. Ultimately, the Company was required to pay Raytheon $6.8
million, including $1.5 million in interest, in full satisfaction of the
arbitration award and after offsetting the amount for price adjustments in favor
of the Company which had been agreed to during 1999. The award payment was made
on April 13, 2000. Of this amount, $9.9 million plus related costs of $0.6
million was recorded in the financial statements as an adjustment of members'
deficit, consistent with the original recording of the Merger, which was
accounted for as a recapitalization. Certain price adjustments concluded during
1999 had been previously recorded in the financial statements as of and for the
period ended December 31, 1999. The related net interest, including amounts
related to prior years, has been included in current year interest expense.


                                       55
<PAGE>

      Various claims and legal proceedings generally incidental to the normal
course of business are pending or threatened against the Company. While the
ultimate liability from these proceedings is difficult to determine, in the
opinion of management, any additional liability will not have a material effect
on the Company's financial position, liquidity or results of operations.

Note 15 - Pensions and Other Employee Benefits:

      The Company has several pension and retirement plans covering the majority
of its employees. The pension plan covering salaried and management employees is
a defined benefit cash balance plan whereby an account is established for each
participant, in which pay credits and interest credits are earned as the
participant provides service. Pay credits are calculated as a pre-determined
percentage of the participant's salary adjusted for age and years of service.
Interest credits are earned at the rate of a one-year Treasury Bill, as of the
last day of the prior plan year, plus 1%. The pension plan covering hourly and
union employees generally provides benefits of stated amounts for each year of
service. The Company's funding policy for the salaried plan is to contribute
annually at a rate that is intended to remain at a level percentage of
compensation for the covered employees. The Company's funding policy for the
hourly and union plan is to contribute annually at a rate that is intended to
remain level for the covered employees. Unfunded prior service costs under the
funding policy are generally amortized over periods from 10 to 30 years.

      Total pension expense (benefit) for the Company's plans was ($2.1)
million, $0.3 million and ($0.8) million in 2000, 1999, and 1998, respectively,
including the following components:

<TABLE>
<CAPTION>
                                                                                             Years Ended December 31,
                                                                             -----------------------------------------------------
                                                                               2000                  1999                    1998
                                                                             -------                -------                -------
<S>                                                                          <C>                    <C>                    <C>
Service cost of benefits earned during the period .............              $ 1,311                $ 1,455                $ 1,391
Interest cost on projected benefit obligation .................                2,413                  2,197                  2,086
 Actual gain on assets ........................................                  (73)                (7,387)                (6,261)
        Net amortization and deferral .........................               (5,738)                 2,688                  1,942
Curtailment losses and termination benefits ...................                   --                  1,390                     --
                                                                             -------                -------                -------
        Net periodic pension cost (benefit) ...................              $(2,087)               $   343                $  (842)
                                                                             =======                =======                =======
Assumptions used in the accounting were:
   Discount rate ..............................................                 7.50%                  8.00%                  6.75%
   Expected long-term rate of return on assets ................                 9.25%                  9.25%                  9.25%
   Rate of increase in compensation levels ....................                  N/A                    N/A                   4.00%
</TABLE>

      In 1999, various plan curtailments and supplemental termination benefits
were recognized as a result of workforce reductions.

      The following table provides a reconciliation of benefit obligations, plan
assets and funded status of the plans at December 31:


                                       56
<PAGE>

                                                        2000             1999
                                                      --------         --------
Change in benefit obligation:
Benefit obligation at beginning of year ......        $ 31,608         $ 33,870
Service cost .................................           1,311            1,455
Interest cost ................................           2,413            2,197
Amendments ...................................              --           (1,079)
Curtailments .................................              --              (93)
Termination benefits .........................              --              992
Acquisition ..................................             951               --
Actuarial (gain) loss ........................             958           (4,232)
Benefits paid ................................          (4,920)          (1,502)
                                                      --------         --------
 Benefit obligation at end of year ...........          32,321           31,608
                                                      --------         --------
Change in plan assets:
Fair value of plan assets at beginning of year          50,696           44,811
Actual return on plan asset ..................              73            7,387
Benefits paid ................................          (4,920)          (1,502)
                                                      --------         --------
 Fair value of plan assets at end of year ....          45,849           50,696
                                                      --------         --------

Funded status ................................          13,528           19,088
Unrecognized transition asset ................              --             (144)
Unrecognized prior service cost ..............             693              764
Unrecognized net gains .......................         (12,935)         (19,558)
                                                      --------         --------
 Prepaid benefit cost ........................        $  1,286         $    150
                                                      ========         ========

      Plan assets primarily include equity and fixed income securities.

      In addition to providing pension benefits, the Company provides certain
health care and life insurance benefits for retired employees. Substantially all
of the Company's employees may become eligible for these benefits if they reach
normal retirement age while working for the Company. Retiree health plans are
paid for in part by employee contributions, which are adjusted annually.
Benefits are provided through various insurance companies whose charges are
based either on the benefits paid during the year or annual premiums. Health
benefits are provided to retirees, their covered dependents, and beneficiaries.
Retiree life insurance plans are noncontributory and cover the retiree only.

      The net postretirement benefit cost for the Company in 2000, 1999 and 1998
included the following components:


                                       57
<PAGE>

                                                      Years Ended December 31,
                                                     --------------------------
                                                     2000       1999       1998
                                                     ----       ----       ----
Service cost benefits earned during the period       $ 39       $ 51       $ 58
Interest cost on projected benefit obligation .        90        106        142
Net amortization and deferral .................        48         84         91
Curtailment losses ............................        --        250         --
                                                     ----       ----       ----
 Net postretirement benefit cost ...............     $177       $491       $291
                                                     ====       ====       ====
Assumptions used in the accounting were:
 Discount rate .................................     7.50%      8.00%      6.75%
 Rate of increase in compensation levels .......     4.00%      4.00%      4.00%
 Health care cost trend rate in the first year .     5.50%      6.50%      6.00%

    The following provides a reconciliation of benefit obligations, plan assets
and the funded status of the plan at December 31:

                                                          2000           1999
                                                         -------        -------
Change in benefit obligation:
Benefit obligation at beginning of year ..........       $ 1,214        $ 1,870
Service cost .....................................            39             51
Interest cost ....................................            90            106
Plan participants' contributions .................            31             --
Curtailments .....................................            --           (258)
Actuarial (gain) loss ............................            70           (173)
Benefits paid ....................................          (352)          (382)
                                                         -------        -------
 Benefit obligation at end of year ...............         1,092          1,214
                                                         -------        -------
Change in plan assets:
Fair value of plan assets at beginning of year ...            --             --
Employer contributions ...........................           321            382
Plan participants' contributions .................            31             --
Benefits paid ....................................          (352)          (382)
                                                         -------        -------
 Fair value of plan assets at end of year ........            --             --
                                                         -------        -------

Funded status ....................................        (1,092)        (1,214)
Unrecognized transition obligation ...............           544            589
Unrecognized net loss ............................           217            150
                                                         -------        -------
 Accrued benefit cost ............................       $  (331)       $  (475)
                                                         =======        =======

      A one percentage point increase in the assumed health care cost trend rate
would increase the accumulated postretirement benefit obligation as of December
31, 2000 by approximately $31 and the interest cost by approximately $4. A one
percentage point decrease in the assumed health care cost trend rate would
increase the accumulated postretirement benefit obligation as of December 31,
2000 by approximately $28 and the interest cost by approximately $4.

      Prior to the Recaptialization, eligible employees were able to participate
in Raytheon's Savings and Investment Plan and Raytheon's Employee Stock
Ownership Plan. Subsequent to the Recapitalization, eligible employees are able
to participate in the Alliance Laundry Systems Capital Appreciation Plan
("ALCAP"). The provisions of ALCAP are substantially the same as those of


                                       58
<PAGE>

Raytheon's Savings and Investment Plan. In addition, the Company makes an annual
contribution to ALCAP equal to approximately one half of one percent of salaries
and wages, subject to statutory limits, of eligible employees.

      Under the terms of such defined contribution plans, covered employees are
allowed to contribute up to 21% percent of their pay on a pre-tax basis up to
the limit established by the Internal Revenue Service. The Company contributes
amounts equal to 50 percent of the employee's contributions, up to a maximum of
such Company contributions equal to three percent of the employee's pay. Total
expense for the Savings and Investment and ALCAP plans totaled $1.0 million,
$1.1 million and $1.1 million for 2000, 1999 and 1998, respectively.

      Prior to May 5, 1998, the Company's employees were covered under
Raytheon's workers' compensation program. The Company's allocated expense for
workers compensation during the period ended May 4, 1998 was $0.4 million.

Deferred Compensation Agreements

      In connection with the Merger, the Company and Raytheon entered into
deferred compensation agreements with certain executives, whereby the Company
assumed certain long-term compensation obligations earned by management under
programs established by Raytheon. Such agreements provide for the deferral of
compensation until the earlier of (i) the payment of a lump sum (the "Benefit
Amount") to the executive ten years after the date of such agreement, regardless
of whether the executive is employed by the Company as of such date or (ii) the
payment of the Benefit Amount upon the occurrence of certain events described
therein. The balance sheet at December 31, 2000 and 1999 includes a long-term
liability of $1.7 million and $1.9 million, respectively, related to such
agreements.

Note 16 - Related Party Transactions:

Securityholders Agreement

      Upon the consummation of the Merger, the Company, Raytheon and certain
securityholders entered into a securityholders agreement (the "Securityholders
Agreement"). The Securityholders Agreement (i) restricts the transfer of the
equity interests of the Company; (ii) grants tag-along rights on certain
transfers of equity interests of the Company; (iii) requires the securityholders
to consent to a sale of the Company to an independent third party if such sale
is approved by certain holders of the then outstanding equity interests of the
Company; and (iv) grants preemptive rights on certain issuances of equity
interests of the Company. Certain of the foregoing provisions of the
Securityholders Agreement will terminate upon the consummation of an initial
public offering or a liquidity event (each as defined in the Securityholders
Agreement).

Management Investor Promissory Notes

      In connection with the Transactions, the Company entered into promissory
notes (the "Promissory Notes") aggregating approximately $1.8 million with
certain members of management to help finance the purchase of Common Units in
the Company. The Promissory Notes bear interest at a rate of 5.94% per annum and
mature on June 5, 2008. The Promissory Notes are classified as a component of
members' deficit at December 31, 2000 and 1999. During the year ended December
31, 2000, $0.3 million of the Promissory Notes were repaid to the Company.


                                       59
<PAGE>

Executive Unit Purchase Agreements

      In connection with the Merger, MergeCo entered into executive unit
purchase agreements (the "Purchase Agreements") with certain members of
management of the Company (each an "Executive"). Such agreements govern the sale
to the Executives of common membership interests of MergeCo in exchange for cash
and/or a promissory note from the Executive and provide for repurchase rights
and restrictions on transfer of the common units. In connection with the Merger,
the Executives' membership interests in MergeCo were converted into common
membership interests of the Company.

      The Purchase Agreements provide the Company with a repurchase option upon
the termination of each Executive. If the Executive's termination is the result
of death, permanent disability or without cause, as defined, Class A and Class L
Units, and vested Class B and Class C Units may be repurchased by the Company at
a price per unit equal to fair market value, as defined, and unvested Class B
and Class C Units may be repurchased at a price per unit equal to the lower of
fair market value or original value, as defined. If an Executive's termination
is voluntary or for cause, as defined, all units may be repurchased at a price
equal to the lower of fair market value or original value, unless an Executive's
voluntary termination occurs seven and one-half years from May 5, 1998, in which
case the repurchase price shall be fair market value. The Class B and Class C
Units were purchased by the Executives at a nominal value based upon the
subordinated nature of such interests (see Note 13).

Management Services Agreement

      In connection with the Transactions, the Company entered into a management
services agreement (the "Management Services Agreement") with Bain LLC pursuant
to which Bain LLC agreed to provide: (i) general executive and management
services; (ii) identification, support, negotiation and analysis of acquisitions
and dispositions; (iii) support, negotiation and analysis of financial
alternatives; and (iv) other services agreed upon by the Company and Bain LLC.
In exchange for services, Bain LLC will receive (i) an annual management fee,
plus reasonable out-of-pocket expenses (payable quarterly) and (ii) a
transaction fee in an amount in accordance with the general practices of Bain
LLC at the time of the consummation of any additional acquisition or divestiture
by the Company and of each financing or refinancing (currently approximately
1.0% of total financings). In connection with the Recapitalization, Bain LLC
also received a transaction fee from the Company. The Management Services
Agreement has an initial term of ten years subject to automatic one-year
extensions unless the Company or Bain LLC provides written notice of
termination.

Note 17 - Segment Information:

      Based upon the information used by management for making operating
decisions and assessing performance, the Company has organized its business into
categories based upon products and services broken down primarily by markets.
Commercial laundry equipment and service parts, including sales to international
markets, are combined to form the commercial laundry segment. Commercial laundry
net revenue includes amounts related to the Company's finance program which
supports its commercial laundry operations. The Company's primary measure of
operating performance is gross profit which does not include an allocation of
any selling or product distribution expenses. Such amounts are reviewed on a
consolidated basis by management. In determining gross profit for its operating
units, the Company also does not allocate certain manufacturing costs, including
manufacturing variances and warranty and service support costs. Gross profit is
determined by subtracting cost of sales from net revenues. Cost of sales is
comprised of the costs of raw materials and component parts, plus costs incurred
at the manufacturing plant level, including, but not limited to, labor and
related fringe benefits,


                                       60
<PAGE>

depreciation, tools, supplies, utilities, property taxes and insurance. The
Company does not allocate assets internally in assessing operating performance.
Net revenues and gross profit as determined by the Company for its operating
segments are as follows:

<TABLE>
<CAPTION>
                                             2000                               1999                               1998
                                   --------------------------         --------------------------         --------------------------
                                       Net            Gross              Net            Gross               Net             Gross
                                    Revenues          Profit           Revenues         Profit            Revenues          Profit
                                   ---------        ---------         ---------        ---------         ---------        ---------
<S>                                <C>              <C>               <C>              <C>               <C>              <C>
Commercial laundry ...........     $ 265,441        $ 101,609         $ 259,692        $  96,284         $ 254,530        $  92,592

Appliance Co. consumer laundry            --               --            54,682            1,523            77,184            2,642
                                   ---------          -------         ---------           ------         ---------        ---------
                                   $ 265,441          101,609         $ 314,374           97,807         $ 331,714           95,234
                                   =========                          =========                          =========        =========
Other manufacturing costs ....                        (33,726)                           (22,915)                           (25,839)
                                                    ---------                          ---------                          ---------
Gross profit as reported .....                      $  67,883                          $  74,892                          $  69,395
                                                    =========                          =========                          =========
</TABLE>

Depreciation expense allocations for each segment are presented below:

                                              2000          1999          1998
                                             -------       -------       -------

Commercial laundry ...................       $11,141       $ 7,113       $ 6,078
Appliance Co. consumer laundry .......            --         4,242         5,957
                                             -------       -------       -------
                                             $11,141       $11,355       $12,035
                                             =======       =======       =======

      The Company sells its products primarily to independent distributors. The
Company's largest customer (excluding Appliance Co.) accounted for 13.6% and
11.5% of net revenues in 2000 and 1999, respectively.


                                       61
<PAGE>

                          Alliance Laundry Holdings LLC
                 Schedule II - Valuation and Qualifying Accounts
                             (Dollars in Thousands)

Accounts Receivable:
                           Balance
                              at                                  Balance
                          Beginning      Charges                   at End
                          of Period    to Expense   Deductions   of Period
                          ----------   -----------  -----------  ----------
Year ended:
   December 31, 1998...        $451           347          106        $692
   December 31, 1999...        $692           412          641        $463
   December 31, 2000...        $463           411          155        $719
<TABLE>
<CAPTION>
Inventory:
                           Balance      Charges
                              at           to                  Reallocation    Balance
                          Beginning    Expense /               and Reserve      at End
                          of Period     (Income)    Deductions  Addition      of Period
                          ----------   -----------  ----------- ----------    ----------
<S>                       <C>           <C>         <C>          <C>        <C>
Year ended:
   December 31, 1998...      $4,309         1,806        2,411         --        $3,704
   December 31, 1999...      $3,704         1,151        1,207         --        $3,648
   December 31, 2000...      $3,648         (377)        1,681      1,000        $2,590

</TABLE>
                                       62
<PAGE>

ITEM 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

PART III.

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS

Managers and Executive Officers

      The representatives to the Board of Managers (each, a "Manager") and
executive officers of the Company are as follows:

         Name             Age                        Position
         ----             ---                        --------
Thomas F. L'Esperance.     52     Chief Executive Officer and Manager
Jeffrey J. Brothers...     54     Senior Vice President, Sales and Marketing
Bruce P. Rounds.......     44     Vice President, Chief Financial Officer
William J. Przybysz...     56     Vice President, Marianna Operations
R. Scott Gaster.......     48     Vice President, Washer, Dryer and Tumbler
                                  Operations
Robert T. Wallace.....     45     Vice President, Corporate Controller
Scott L. Spiller......     50     Vice President, Law and Human Resources
Edward W. Conard......     44     Manager
Robert C. Gay.........     49     Manager
Stephen M. Zide            41     Manager
Stephen C. Sherrill...     48     Manager
Philip S. Taymor......     45     Manager

      Thomas F. L'Esperance has been Chief Executive Officer of the Company
since March 1996. He had served as President of the Amana Home Appliance Company
from 1993 to 1996 and was President of Caloric Corporation, a manufacturer of
appliances, for two years prior thereto.

      Jeffrey J. Brothers has been Senior Vice President of Sales and Marketing
of the Company since October 1989. He has been employed with the Company since
1977. Mr. Brothers has been involved in sales for the Company since 1983 and has
held other positions such as Manager of Distribution Development, Plant
Controller and Financial Analyst.

      Bruce P. Rounds joined the Company in 1989 as Vice President of Finance
and was promoted to his current position in February 1998. He held the position
of Vice President, Business Development, for the Company from 1996 to 1998.
Before coming to the Company, he served in a variety of capacities for eight
years at Mueller Company and for three years with Price Waterhouse. He is a
Certified Public Accountant.

      William J. Przybysz rejoined the company in May 2000 as Vice President and
General Manager of Marianna, Florida operations. Previously he had been with the
Company as Vice President of Logistics and Material from 1990 through 1993. From
1993 through February of 2000 he was the Vice President and General Manager of
Amana Central Heating and Air Conditioning Division based in Fayetteville, TN.
Mr. Przybysz prior experience includes ten years in various management positions
with Whirlpool Corporation and eight years of management experience with
Wheelhorse Products (since acquired by The Toro Company).


                                       63
<PAGE>

      R. Scott Gaster joined the Company as Vice President, Procurement and
Materials, in June 1995. He took on the added responsibility of Vice President
of Washer and Dryer Operations in July 1997 and Tumbler Operations in August
1998. Mr. Gaster has also retained his former purchasing responsibilities. Prior
to joining the Company, he was employed by GKN Automotive, Inc. from 1979 to
1995 in such positions as Director of Procurement and Logistics, Corporate
Purchasing Agent and Purchasing Manager.

      Robert T. Wallace has been Vice President, Corporate Controller, of the
Company since June 1996. He held positions as Controller and Manager-Reporting
and Analysis for the Company from 1990 to 1996. Mr. Wallace's previous
experience includes two years as Controller of Alcolac (chemicals), four years
as Manager of Reporting and Analysis with Mueller Company, five years with
Ohmeda and two years with Price Waterhouse. He is a Certified Public Accountant.

      Scott L. Spiller has been Vice President of Law & Human Resources, and
General Counsel of the Company since February 1998. From April 1996 to February
1998, Mr. Spiller was practicing law as a sole practitioner. Prior to that, he
was General Counsel and Secretary of the Company for ten years.

      Edward W. Conard serves as a Manager. He has been a Managing Director of
Bain LLC since March 1993. From 1990 to 1992, Mr. Conard was a director of
Wasserstein Perella, an investment banking firm that specializes in mergers and
acquisitions. Previously, he was a Vice President of Bain & Company, where he
headed the management consulting firm's operations practice area. Mr. Conard
also serves as a director of Cambridge Industries, Waters Corporation, Medical
Specialties, Inc., ChipPac, Dynamic Details, Inc. and US Synthetic.

      Robert C. Gay serves as a Manager. Mr. Gay has been a Managing Director of
Bain LLC since 1993 and has been a General Partner of Bain Venture Capital since
1989. From 1988 through 1989, Mr. Gay was a principal of Bain Venture Capital.
Mr. Gay is Vice Chairman of the Board of Directors of IHF Capital, Inc., parent
of ICON Health & Fitness Inc. Mr. Gay also serves as a director of Alliance
Entertainment Corp., GT Bicycles, Inc., Physio-Control International
Corporation, Cambridge Industries, Inc., Nutraceutical Corporation, American Pad
& Paper Company, GS Technologies and Small Fry Snack Foods Limited.

      Stephen M. Zide serves as a Manager. Mr. Zide has been a Principal of Bain
Capital LLC since 2000. From 1998 through 2000, Mr. Zide was a Managing Director
of Pacific Equity Partners. Previously, he was an Associate of Bain Capital and
a partner at the law firm of Kirkland & Ellis. Mr. Zide also serves as a
director of DDi Corp.

      Stephen C. Sherrill serves as a Manager. Mr. Sherrill has been a principal
of Bruckmann, Rosser, Sherrill & Co. since its formation in 1995. Mr. Sherrill
was an officer of Citicorp Venture Capital, Ltd. from 1983 through 1994. Mr.
Sherrill is a director of Galey & Lord, Inc., Mediq Incorporated, B & G Foods,
Inc., Doane Pet Care Enterprises, Inc. and HealthPlus Corporation.

      Philip S. Taymor serves as a Manager. Mr. Taymor has been Senior Vice
President and Chief Financial Officer of Waters Corporation since August 1994.
Previously, he held various finance and accounting positions at Millipore
Corporation, including Corporate Controller. Mr. Taymor joined Millipore from
Grant Thornton & Company, where he was a Certified Public Accountant.

ITEM 11. EXECUTIVE COMPENSATION


                                       64
<PAGE>

      The following table sets forth information concerning the annual and
long-term compensation for services in all capacities to the Company or its
predecessor for 2000 and 1999 of those persons who served as (i) the chief
executive officer during 2000 and (ii) the other four most highly compensated
executive officers of the Company for 2000 (collectively, the "Named Executive
Officers"):

                           Summary Compensation Table

                                                   Annual Compensation
                                           ------------------------------------
                                                                 Other Annual
Name and Principal Position         Year    Salary($) Bonus($)  Compensation($)
---------------------------         ----    --------- --------  ---------------
Thomas F. L'Esperance.............  2000     265,008   285,422       1,020 (1)
Chief Executive Officer             1999     265,008    25,000       2,339 (1)
                                    1998     310,003    97,615       6,529 (2)

R. Scott Gaster...................  2000     136,968    48,632       5,987 (1)
VP, Washer, Dryer and Tumblers      1999     131,700    13,170       6,986 (1)
                                    1998     131,700    31,780              --

Jeffrey J. Brothers...............  2000     133,512    47,635       3,248 (1)
Senior VP, Sales and Marketing      1999     129,000    12,900       6,200 (1)
                                    1998     126,006    21,775              --

Bruce P. Rounds...................  2000     130,092    45,969       3,090 (1)
VP, Chief Financial Officer         1999     124,448    12,449       6,751 (1)
                                    1998     119,700    25,160              --

Scott L. Spiller..................  2000     124,800    44,312       8,090 (1)
VP, Law and Human Resources         1999     120,000    27,000       6,794 (1)
                                    1998      82,137        --       8,184 (2)

(1)   Represents gross-up amounts paid for non-deductible fringe benefits
      provided by the Company.
(2)   Represents payments for moving expenses.


                                       65
<PAGE>

Employment Agreement

      In connection with the Merger, the Company entered into an employment
agreement with Thomas F. L'Esperance. Such agreement provides for: (i) a five
year employment term; (ii) a minimum base salary and bonus following the end of
each fiscal year so long as the Company employs Mr. L'Esperance; (iii) severance
benefits; (iv) non-competition, non-solicitation and confidentiality agreements;
and (v) other terms and conditions of Mr. L'Esperance's employment.

Executive Unit Purchase Agreement

      In connection with the Merger, MergeCo entered into Executive Unit
Purchase Agreements with the Management Investors (each, an "Executive"),
including Mr. L'Esperance, Mr. Gaster, Mr. Brothers, Mr. Rounds and Mr. Spiller.
Such agreements govern the sale to the Executives of common membership interests
of MergeCo in exchange for cash and/or a promissory note from the Executive and
provide for repurchase rights and restrictions on transfer of the common units.
In connection with the Merger, the Executives' membership interests in MergeCo
were converted into common membership interests of the Parent.

Deferred Compensation Agreement

      In connection with the Merger, Raytheon, the Company and the Parent
entered into Deferred Compensation Agreements with certain Executives, including
Mr. L'Esperance, Mr. Gaster, Mr. Brothers and Mr. Rounds whereby the Company
assumed certain long-term compensation obligations earned by management under
programs established by Raytheon. Such agreements provide for the deferral of
compensation until the earlier of (i) the payment of a lump sum (the "Benefit
Amount") to the Executive ten years after the date of such agreement, regardless
of whether the Executive is employed by the Company as of such date or (ii) the
payment of the Benefit Amount upon the occurrence of certain events described
therein.

Pension Plan

      Substantially all eligible salaried employees of the Company, including
executive officers of the Company, are covered under the Alliance Laundry
Systems Retirement Accumulation Plan (the "Pension Plan"). The cost of the
Pension Plan is borne entirely by the Company. The Pension Plan is a defined
benefit cash balance plan. Under this plan, an account is established for each
participant in which pay credits and interest credits are earned as the
participant provides service. Pay credits are calculated as a percentage of the
participant's remuneration adjusted for age and years of service in accordance
with the following table:

                         Pension Plan Pay Credits Table
                     --------------------------------------
                     Total of Age and    Base Remuneration
                     Years of Service      Credit Rates
                     --------------------------------------
                     Less than 45              3.0%
                     45 but less than 50       3.5%
                     50 but less than 55       4.0%
                     55 but less than 60       4.5%
                     60 but less than 65       5.0%
                     65 but less than 75       6.0%
                     75 but less than 85       7.0%
                     85 or more                8.0%


                                       66
<PAGE>

      In addition, a supplemental pay credit is earned on remuneration in excess
of $51,200 (indexed for years after 2000) at the lesser of 5% or the percentage
used per the above table. A participant's account also increases for interest
credits each year. Interest credits are earned at the rate of a one-year
Treasury Bill as of the last day of the prior plan year plus 1% which was 6.63%
for 2000. The amount of earnings that can be recognized for plan purposes is
limited by the IRS to $170,000 in 2000. A participant vests in his benefits
accrued under the Pension Plan after five years of service.

      Respective years of benefit service under the Pension Plan, through
December 31, 2000, are as follows: Mr. L'Esperance 2; Mr. Gaster 3; Mr. Brothers
22; Mr. Rounds 11 and Mr. Spiller 11. Mr. L'Esperance was covered under Raytheon
plans through April 1998, at which time he became a participant under the
Company's Pension Plan.

Savings Plans

      Substantially all of the salaried employees, including executive officers
of the Company, participate in a 401(k) savings plan established by the Company
(the "Company 401(k) Plan"). Prior to the Merger, such employees participated in
a 401(k) plan and an ESOP sponsored by Raytheon. As part of the Merger, Raytheon
transferred the account balances associated with the Company employees in the
Raytheon 401(k) plan to the Company 401(k) Plan. Employees are permitted to
defer a portion of their income under the Company 401(k) Plan and the Company
will match such contribution. The matching contribution is consistent with that
under the prior Raytheon plan which provided a matching contribution equal to
50% of the first 6% of the employee's contribution. In addition, employees
received a contribution under the Raytheon ESOP equal to 0.5% of W-2 pay. This
contribution is made as a supplemental contribution to the Company 401(k) Plan
in the form of a discretionary cash contribution (instead of membership
interests).

Compensation of Managers

      The Company will reimburse Managers for any out-of-pocket expenses
incurred by them in connection with services provided in such capacity. In
addition, the Company may compensate Managers for services provided in such
capacity.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

      The Parent owns all of the outstanding equity interests of the Company.
The following table sets forth certain information regarding the approximate
beneficial ownership of the Parent's common equity interests held by (i) each
person (other than Managers and executive officers of the Company) known to the
Company to own more than 5% of the outstanding common membership interests of
the Company, (ii) certain Managers of the Company and (iii) the Named Executive
Officers of the Company. The Parent's common equity interests are comprised of
four classes of membership units including Class A, Class L, Class B and Class
C.


                                       67
<PAGE>

                                                                  Percentage of
                                                                     Common
                                                                   Membership
Name and Address of Beneficial Owner                                Interests
------------------------------------                              --------------
Bain Funds(1)(2)..............................................        54.9%
c/o Bain Capital, Inc.
Two Copley Place
Boston, MA 02116

BRS Investors(3)..............................................        27.7%
c/o Bruckmann, Rosser, Sherrill & Co., L.P.
126 East 56th Street, 29th Floor
New York, NY 10022

Management Investors(4).......................................         9.4%
c/o Alliance Laundry Systems LLC
P.O. Box 990
Ripon, WI 54971-0990

Raytheon Company..............................................         7.0%
141 Spring Street
Lexington, MA 02173

Edward Conard(1)(2)(5)........................................        54.9%
c/o Bain Capital, Inc.
Two Copley Place
Boston, MA 02116

Robert Gay(1)(2)(5)...........................................        54.9%
c/o Bain Capital, Inc.
Two Copley Place
Boston, MA 02116

Stephen Sherrill(3)(6)........................................        27.7%
c/o Bruckmann, Rosser, Sherrill & Co., L.P.
126 East 56th Street, 29th Floor
New York, NY 10022

Stephen Zide(1)(2)............................................        16.3%
c/o Bain Capital, Inc.
Two Copley Place
Boston, MA 02116

Thomas F. L'Esperance(4)......................................         3.8%
c/o Alliance Laundry Systems LLC
P.O. Box 990
Ripon, WI 54971-0990

Philip S. Taymor(7)...........................................         0.5%


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<PAGE>

                                                                  Percentage of
                                                                     Common
                                                                   Membership
Name and Address of Beneficial Owner                                Interests
------------------------------------                              --------------
c/o Maple Street Partners
34 Maple Street
Milford, MA 01757

R. Scott Gaster(4)............................................         0.7%
c/o Alliance Laundry Systems LLC
P.O. Box 990
Ripon, WI 54971-0990

Jeffrey J. Brothers(4)........................................         0.8%
c/o Alliance Laundry Systems LLC
P.O. Box 990
Ripon, WI 54971-0990

Bruce P. Rounds(4)............................................         0.8%
c/o Alliance Laundry Systems LLC
P.O. Box 990
Ripon, WI 54971-0990

Scott L. Spiller (4) .........................................         0.4%
c/o Alliance Laundry Systems LLC
P.O. Box 990
Ripon, WI 54971-0990

All Managers and executive officers as a group (20
persons)(1)(2)(3)(4)..........................................        91.0%

(1) Amounts shown reflect interests in Bain/RCL, L.L.C. which beneficially owns
55.9% of the outstanding common membership interests of the Company through its
ownership of Class A and Class L membership units in the Parent.

(2) Amounts shown reflect the aggregate interests held by Bain Capital Fund V,
L.P. ("Fund V"), Bain Capital Fund V-B, L.P. ("Fund V-B"), BCIP Trust Associates
II ("BCIP Trust"), BCIP Trust Associates II-B ("BCIP Trust II- B"), BCIP
Associates II ("BCIP") and BCIP Associates II-B ("BCIP II-B") (collectively, the
"Bain Funds"), for the Bain Funds and Messrs. Conard and Gay and the aggregate
interests held by BCIP Trust, BCIP Trust II-B, BCIP and BCIP II-B for Mr. Zide.

(3) Amounts shown reflect the aggregate interests held by Bruckmann, Rosser,
Sherrill & Co., L.P. ("BRS"), BCB Family Partners, L.P., NAZ Family Partners,
L.P., Paul D. Kaminski, Bruce C. Bruckmann, Donald J. Bruckmann, Harold O.
Rosser, Stephen C. Sherrill, H. Virgil Sherrill, Nancy A. Zweng, John Rice
Edmonds, Susan Kaider, Marilena Tibrea, Walker C. Simmons and MLPF&S Custodian
FBO Paul Kaminski (collectively, the "BRS Investors").

(4) Includes Class A and Class L membership units in the Parent but excludes
Class B and Class C membership units which are subject to vesting and generally
have no voting rights, representing on a fully diluted basis approximately 9.7%
of Parent's membership units for the Management Investors,


                                       69
<PAGE>

3.1% for Mr. L'Esperance, 1.3% for Mr. Gaster, 1.4% for Mr. Brothers, 1.3% for
Mr. Rounds and 1.2% for Mr. Spiller.

(5) Messrs. Conard and Gay are each Managing Directors of Bain Capital Investors
V, Inc., the sole general partner of Bain Capital Partners V, L.P. ("BCPV"), and
are limited partners of BCPV, the sole general partner of Fund V and Fund V-B.
Accordingly Messrs. Conard and Gay may be deemed to beneficially own the
interests owned by Fund V and Fund V-B. Messrs. Conard and Gay are each general
partners of BCIP, BCIP II-B, BCIP Trust and BCIP Trust II-B and, accordingly,
may be deemed to beneficially own the interests owned by BCIP, BCIP II-B, BCIP
Trust and BCIP Trust II-B. Each such person disclaims beneficial ownership of
any such shares in which he does not have a pecuniary interest.

(6) Mr. Sherrill is a director of BRSE Associates, Inc., the sole general
partner of BRS Partners, L.P., the sole general partner of BRS and, accordingly,
may be deemed to beneficially own the interests owned by BRS. Mr. Sherrill
disclaims beneficial ownership of any such shares in which he does not have a
pecuniary interest.

(7) Mr. Taymor is a partner of Maple Street Partners LLC, and accordingly, may
be deemed to beneficially own the interests owned by Maple Street Partners. Mr.
Taymor disclaims beneficial ownership of any such shares in which he does not
have a pecuniary interest.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Parent Securityholders Agreement

      Upon the consummation of the Merger, the Parent, Raytheon and the
securityholders entered into a securityholders agreement (the "Securityholders
Agreement"). The Securityholders Agreement: (i) restricts the transfer of the
equity interests of the Parent; (ii) grants tag-along rights on certain
transfers of equity interests of the Parent; (iii) requires the securityholders
to consent to a sale of the Parent to an independent third party if such sale is
approved by certain holders of the then outstanding equity interests of the
Parent; and (iv) grants preemptive rights on certain issuances of equity
interests of the Parent. Certain of the foregoing provisions of the
Securityholders Agreement will terminate upon the consummation of an Initial
Public Offering or a Liquidity Event (each as defined in the Securityholders
Agreement).

Management Services Agreement

      In connection with the Merger, the Company entered into a Management
Services Agreement (the "Management Services Agreement") with Bain LLC pursuant
to which Bain LLC agreed to provide: (i) general executive and management
services; (ii) identification, support, negotiation and analysis of acquisitions
and dispositions; (iii) support, negotiation and analysis of financial
alternatives; and (iv) other services agreed upon by the Company and Bain LLC.
In exchange for such services, Bain LLC will receive (i) an annual management
fee of $1.0 million, plus reasonable out-of-pocket expenses (payable quarterly)
and (ii) a transaction fee in an amount in accordance with the general practices
of Bain LLC at the time of the consummation of any additional acquisition or
divestiture by the Company and of each financing or refinancing (currently
approximately 1.0% of total financings). The Management Services Agreement has
an initial term of ten years subject to automatic one-year extensions unless the
Company or Bain LLC provides written notice of termination.


                                       70
<PAGE>

Parent Registration Rights Agreement

      Upon the consummation of the Merger, the Parent, Raytheon and the
securityholders, entered into a registration rights agreement (the "Parent
Registration Rights Agreement"). Under the Parent Registration Rights Agreement,
the holders of a majority of the Registrable Securities (as defined in the
Parent Registration Rights Agreement) owned by Bain LLC have the right, subject
to certain conditions, to require the Parent to register any or all of their
common equity interests of the Parent under the Securities Act at the Parent's
expense. In addition, all holders of Registrable Securities are entitled to
request the inclusion of any common equity interests of the Parent subject to
the Parent Registration Rights Agreement in any registration statement at the
Parent's expense whenever the Parent proposes to register any of its common
equity interests under the Securities Act. In connection with all such
registrations, the Parent has agreed to indemnify all holders of Registrable
Securities against certain liabilities, including liabilities under the
Securities Act.

Parent Amended and Restated Limited Liability Company Agreement

      Bain LLC, the BRS Investors, the Management Investors and Raytheon
(collectively, the "Members") have entered into an Amended and Restated Limited
Liability Company Agreement (the "LLC Agreement"). The LLC Agreement governs the
relative rights and duties of the Members.

      Membership Interests. The ownership interests of the members in the Parent
consist of preferred units (the "Preferred Units") and common units (the "Common
Units"). The Common Units represent the common equity of the Company. Holders of
the Preferred Units are entitled to the return of capital contributions prior to
any distributions made to holders of the Common Units.

      Distributions. Subject to any restrictions contained in any financing
agreements to which the Company or any of its Affiliates (as defined in the LLC
Agreement) is a party, the Board of Managers (the "Board") may make
distributions, whether in cash, property or securities of the Company, at any
time or from time to time in the following order of priority:

      First, to the holders of Preferred Units, an amount determined by the
aggregate unreturned capital.

      Second, to the holders of Class L Common Units, the aggregate unpaid yield
accrued on such Class L Units.

      Third, to the holders of Class L Units, an amount equal to the aggregate
unreturned capital.

      Fourth, ratably to the holders of Common Units, an amount equal to the
amount of such distribution that has not been distributed pursuant to clauses
described above.

      The Company may distribute to each holder of units within 75 days after
the close of each fiscal year such amounts as determined by the Board to be
appropriate to enable each holder of units to pay estimated income tax
liabilities. There were no distributions to holders of units during 2000.

      Management. The Board consists of five individuals (each a
"Representative"). Pursuant to the Securityholders Agreement, the holder of the
majority of the Common Units held by the BRS Investors appointed one
Representative. The members of the Parent holding a majority of the Bain Units
(as defined in the LLC Agreement) appointed the remaining Representatives. The
current Board consists of Messrs. L'Esperance, Conard, Gay, Sherrill, Zide and
Taymor.


                                       71
<PAGE>

Junior Subordinated Promissory Note

      Upon the consummation of the Merger, the Parent issued a Junior
Subordinated Promissory Note (the "Junior Note") in the principal amount of $9.0
million due August 21, 2009, to Raytheon. Pursuant to the terms of the Junior
Note, interest accrues at the rate of 19.0% per annum until the eighth
anniversary of the date of issuance of the Junior Note and at a rate of 13.0%
thereafter. The Junior Note is subordinated in priority and subject in right and
priority of payment to certain indebtedness described therein.

Parent Seller Preferred Equity

      Upon the consummation of the Merger, the Parent issued mandatorily
redeemable preferred membership interests (the "Seller Preferred Equity") with a
liquidation value of $6.0 million to Raytheon. The Seller Preferred Equity does
not accrete, accrue or pay dividends and is redeemable at the earlier of (i) a
Change of Control (as defined therein), (ii) any initial public offering or
(iii) 2009. The holders of the Seller Preferred Equity are entitled to receive
distributions from the Parent in an amount equal to their Unreturned Capital (as
defined therein) prior to distributions in respect of any other membership
interests of the Parent.

Management Investor Promissory Notes

      In connection with the Merger, the Parent entered into promissory notes
(the "Promissory Notes") aggregating approximately $1.8 million with Mr.
L'Esperance, Mr. Gaster, Mr. Brothers and Mr. Rounds to help finance the
purchase of Common Units in the Parent. The Promissory Notes bear interest at a
rate of 5.94% per annum and mature on June 5, 2008.


                                       72
<PAGE>

PART IV.

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

      (a) Exhibits

The exhibits listed in the accompanying Index to Exhibits are filed as a part of
this report

      (b) Reports on 8-K. None.

INDEX TO EXHIBITS:

<TABLE>
<CAPTION>
   Exhibit                                  Description                               Incorporated Herein By Reference To
   -------                                  -----------                               -----------------------------------
<S>            <C>                                                                    <C>
     2.1       Agreement and Plan of Merger, dated as of February 21, 1998, by and    Exhibit 2.1 to the Registrant's Form
               among Bain/RCL, L.L.C., RCL Acquisitions, L.L.C., Raytheon             S-4, Amendment #1, dated July 2, 1998
               Commercial Laundry LLC and Raytheon Company.                           (file no. 333-56857)

     2.2       Amendment No. 1 to Agreement and Plan of Merger, dated as of May 2,    Exhibit 2.2 to the Registrant's Form
               1998, by and among Bain/RCL, L.L.C., RCL Acquisitions, L.L.C.,         S-4, Amendment #1, dated July 2, 1998
               Raytheon Commercial Laundry LLC and Raytheon Company.                  (file no. 333-56857)

     3.1       Certificate of Formation of Alliance Laundry Systems LLC.              Exhibit 3.1 to the Registrant's Form
                                                                                      S-4, Amendment #1, dated July 2, 1998
                                                                                      (file no. 333-56857)

     3.2       Amended and Restated Limited Liability Company Agreement of Alliance   Exhibit 3.2 to the Registrant's Form
               Laundry Systems LLC.                                                   S-4, Amendment #1, dated July 2, 1998
                                                                                      (file no. 333-56857)

     3.3       Certificate of Incorporation of Alliance Laundry Corporation.          Exhibit 3.3 to the Registrant's Form
                                                                                      S-4, Amendment #1, dated July 2, 1998
                                                                                      (file no. 333-56857)

     3.4       Bylaws of Alliance Laundry Corporation.                                Exhibit 3.4 to the Registrant's Form
                                                                                      S-4, Amendment #1, dated July 2, 1998
                                                                                      (file no. 333-56857)

     4.1       Indenture, dated as of May 5, 1998, among Alliance Laundry Systems     Exhibit 4.1 to the Registrant's Form
               LLC, Alliance Laundry Corporation, the Guarantors and United States    S-4, Amendment #1, dated July 2, 1998
               Trust Company of New York.                                             (file no. 333-56857)

    10.1       Purchase Agreement, dated as of April 29, 1998, by and among           Exhibit 10.1 to the Registrant's Form
               Alliance Laundry Systems LLC, Alliance Laundry Corporation and the     S-4, Amendment #1, dated July 2, 1998
               Initial Purchasers.                                                    (file no. 333-56857)

    10.2       Registration Rights Agreement, dated as of May 5, 1998, by and among   Exhibit 10.2 to the Registrant's Form
               Alliance Laundry Systems LLC, Alliance Laundry Corporation, Alliance   S-4, Amendment #1, dated July 2, 1998
               Laundry Holdings LLC, and Lehman Brothers Inc. and Credit Suisse       (file no. 333-56857)
               First Boston Corporation.
</TABLE>


                                       73
<PAGE>

<TABLE>
<S>            <C>                                                                    <C>
    10.3       Credit Agreement, dated as of May 5, 1998, among Alliance Laundry      Exhibit 10.3 to the Registrant's Form
               Holdings LLC, Alliance Laundry Systems LLC, the several banks or       S-4, Amendment #1, dated July 2, 1998
               other financial institutions or entities from time to time parties     (file no. 333-56857)
               to this Agreement, Lehman Brothers Inc., Lehman Commercial Paper
               Inc., and General Electric Capital Corporation.

    10.4       Loan and Security Agreement, dated May 5, 1998, between Alliance       Exhibit 10.4 to the Registrant's Form
               Laundry Receivables Warehouse LLC, the Lenders and Lehman Commercial   S-4, Amendment #1, dated July 2, 1998
               Paper Inc.                                                             (file no. 333-56857)

    10.5       Amended and Restated Limited Liability Agreement of Alliance Laundry   Exhibit 10.5 to the Registrant's Form
               Holdings LLC, dated as of May 5, 1998.                                 S-4, Amendment #1, dated July 2, 1998
                                                                                      (file no. 333-56857)

    10.6       Alliance Laundry Holdings LLC, Securityholders Agreement, dated as     Exhibit 10.6 to the Registrant's Form
               of May 5, 1998, between Alliance Laundry Holdings LLC and the          S-4, Amendment #1, dated July 2, 1998
               Securityholders.                                                       (file no. 333-56857)

    10.7       Alliance Laundry Holdings LLC, Registration Rights Agreement,          Exhibit 10.7 to the Registrant's Form
               made as of May 5, 1998, by and among Alliance Laundry Holdings LLC,    S-4, Amendment #1, dated July 2, 1998
               Raytheon Company, Bain/RCL and the Securityholders.                    (file no. 333-56857)

    10.8       Employment Agreement, made as of May 5, 1998, by and between           Exhibit 10.8 to the Registrant's Form
               Alliance Laundry Systems LLC and Thomas F. L'Esperance.                S-4, Amendment #1, dated July 2, 1998
                                                                                      (file no. 333-56857)

    10.9       IRA and Executive Unit Purchase Agreement, made as of May 5,           Exhibit 10.9 to the Registrant's Form
               1998, by and between RCL Acquisitions, LLC, Thomas F. L'Esperance      S-4, Amendment #1, dated July 2, 1998
               and Stifel, Nicolaus Custodian for Thomas F. L'Esperance IRA           (file no. 333-56857)
               and Stifel, Nicolaus Custodian for Paula K. L'Esperance IRA.

    10.10      IRA and Executive Unit Purchase Agreement, made as of May 5, 1998,     Exhibit 10.10 to the Registrant's Form
               by and between RCL Acquisitions, LLC, R. Scott Gaster and Robert W.    S-4, Amendment #1, dated July 2, 1998
               Baird & Co. Inc. TTEE for R. Scott Gaster IRA.                         (file no. 333-56857)

    10.11      IRA and Executive Unit Purchase Agreement, made as of May 5, 1998,     Exhibit 10.11 to the Registrant's Form
               by and between RCL Acquisitions, L.L.C., Jeffrey J. Brothers and       S-4, Amendment #1, dated July 2, 1998
               Delaware Charter Guarantee and Trust Company, TTEE for Jeffrey J.      (file no. 333-56857)
               Brothers, IRA.
</TABLE>


                                       74
<PAGE>

<TABLE>
<S>            <C>                                                                    <C>
    10.13      IRA and Executive Unit Purchase Agreement, made as of May 5, 1998,     Exhibit 10.13 to the Registrant's Form
               by and between RCL Acquisitions, L.L.C., Bruce P. Rounds and Stifel,   S-4, Amendment #1, dated July 2, 1998
               Nicolaus Custodian for Bruce P. Rounds IRA.                            (file no. 333-56857)

    10.14      IRA and Executive Unit Purchase Agreement, made as of May 5, 1998,     Exhibit 10.14 to the Registrant's Form
               by and between RCL Acquisitions, L.L.C., Scott L. Spiller and          S-4, Amendment #1, dated July 2, 1998
               Stifel, Nicolaus Custodian for Scott Spiller IRA.                      (file no. 333-56857)

    10.16      Deferred Compensation Agreement, made and entered into as of May       Exhibit 10.16 to the Registrant's Form
               5, 1998, by and among Thomas F. L'Esperance, Raytheon Company,         S-4, Amendment #1, dated July 2, 1998
               Alliance Laundry Holdings LLC, and Alliance Laundry Systems LLC.       (file no. 333-56857)

    10.17      Deferred Compensation Agreement, made and entered into as of May 5,    Exhibit 10.17 to the Registrant's Form
               1998, by and among R. Scott Gaster, Alliance Laundry Holdings LLC,     S-4, Amendment #1, dated July 2, 1998
               and Alliance Laundry Systems LLC.                                      (file no. 333-56857)

    10.18      Deferred Compensation Agreement, made and entered into as of May 5,    Exhibit 10.18 to the Registrant's Form
               1998, by and among Jeffrey J. Brothers, Alliance Laundry Holdings      S-4, Amendment #1, dated July 2, 1998
               LLC, and Alliance Laundry Systems LLC.                                 (file no. 333-56857)

    10.20      Deferred Compensation Agreement, made and entered into as of May 5,    Exhibit 10.20 to the Registrant's Form
               1998, by and among Bruce P. Rounds, Alliance Laundry Holdings LLC,     S-4, Amendment #1, dated July 2, 1998
               and Alliance Laundry Systems LLC.                                      (file no. 333-56857)

    10.34      Promissory Note, dated as of May 5, 1998, from Thomas F. L'Esperance   Exhibit 10.34 to the Registrant's Form
               to RCL Acquisitions, L.L.C.                                            S-4, Amendment #1, dated July 2, 1998
                                                                                      (file no. 333-56857)

    10.35      Promissory Note, dated as of May 5, 1998, from R. Scott Gaster to      Exhibit 10.35 to the Registrant's Form
               RCL Acquisitions, L.L.C.                                               S-4, Amendment #1, dated July 2, 1998
                                                                                      (file no. 333-56857)

    10.36      Promissory Note, dated as of May 5, 1998, from Jeffrey J. Brothers     Exhibit 10.36 to the Registrant's Form
               to RCL Acquisitions, L.L.C.                                            S-4, Amendment #1, dated July 2, 1998
                                                                                      (file no. 333-56857)

    10.38      Promissory Note, dated as of May 5, 1998, from Bruce P. Rounds to      Exhibit 10.38 to the Registrant's Form
               RCL Acquisitions, L.L.C.                                               S-4, Amendment #1, dated July 2, 1998
                                                                                      (file no. 333-56857)

    10.40      Advisory Agreement, dated as of May 5, 1998, by and between Alliance   Exhibit 10.40 to the Registrant's Form
               Laundry Systems LLC, and Bain Capital, Inc.                            S-4, Amendment #1, dated July 2, 1998
                                                                                      (file no. 333-56857)
</TABLE>


                                       75
<PAGE>

<TABLE>
<S>            <C>                                                                    <C>
    10.42      Junior Subordinated Promissory Note, dated as of May 5, 1998, from     Exhibit 10.42 to the Registrant's Form
               Alliance Laundry Holdings LLC to Raytheon Company.                     S-4, Amendment #1, dated July 2, 1998
                                                                                      (file no. 333-56857)

    10.45      Supply Agreement, dated as of May 1, 1998, by and among Coinmach       Exhibit 10.45 to the Registrant's Form
               Corporation, Super Laundry Equipment Corporation and Raytheon          S-4, Amendment #2, dated August 4, 1998
               Commercial Laundry LLC (incorporated by reference                      (file no. 333-56857)
               from exhibit 10.57 to Coinmach Corporation's Annual Report on
               Form 10-K dated as of June 29, 1998, file number 033-49830).

    10.46      Receivables Purchase Agreement, dated as of May 5, 1998, between       Exhibit 10.46 to the Registrant's Form
               Alliance Laundry Systems LLC and Alliance Laundry Receivables          S-4, Amendment #4, dated February 17,
               Warehouse LLC.                                                         1999 (file no. 333-56857)
    10.47      Letter Agreement, dated as of April 29, 1998, by and among Bain/RCL,   Exhibit 10.47 to the Registrant's Form
               L.L.C. and RCL Acquisitions, L.L.C., Raytheon Company and Raytheon     S-4, Amendment #5, dated March 3, 1999
               Commercial Laundry LLC.                                                (file no. 333-56857)

    10.48      First Amendment, dated as of March 26, 1999, to Credit Agreement,      Exhibit 10.48 to the Registrant's Form
               dated as of May 5, 1998, among Alliance Laundry Holdings LLC,          S-4, Amendment #5, dated March 3, 1999
               Alliance Laundry Systems LLC, the several banks on other financial     (file no. 333-56857)
               institutions or entities from time to time parties to this
               Agreement, Lehman Brothers Inc., Lehman Commercial Paper Inc., and
               General Electric Capital Corporation.

   10.49 *     Indenture Agreement, dated as of November 28, 2000, among Alliance
               Laundry Equipment Receivables Trust 2000-A and The Bank of New
               York as indenture trustee.

   10.50 *     Purchase Agreement, dated as of November 28, 2000, between
               Alliance Laundry Equipment Receivables LLC and Alliance Laundry
               Systems LLC, in its own capacity and as servicer.

   10.51 *     Pooling and Servicing Agreement, dated November 28, 2000, among
               Alliance Laundry Systems LLC as servicer and originator, Alliance
               Laundry Equipment Receivables LLC and Alliance Laundry Equipment
               Receivables Trust 2000-A.

   10.52 *     Trust Agreement, dated November 28, 2000, between Alliance
               Laundry Equipment Receivables LLC and Wilmington Trust Company as
               owner trustee.

   10.53 *     Administration Agreement, dated November 28, 2000, among Alliance
               Laundry Equipment Receivables Trust 2000-A and Alliance Laundry
               Systems LLC as administrator, and The Bank of New York as
               indenture trustee.
</TABLE>


                                       76
<PAGE>

<TABLE>
<S>            <C>                                                                    <C>
   10.54 *     Limited Liability Company Agreement of Alliance Laundry Equipment
               Receivables LLC, dated as of November 28, 2000.

   10.55 *     Insurance and Indemnity Agreement, dated as of November 28,
               2000, between AMBAC Assurance Corporation as insurer, Alliance
               Laundry Equipment Receivables Trust 2000-A as Issuer, Alliance
               Laundry Equipment Receivables LLC as Seller, Alliance Laundry
               Systems LLC and The Bank of New York as indenture trustee.

    21.1 *     Subsidiaries of Alliance Laundry Systems LLC.



    24.1       Powers of Attorney.                                                    Exhibit 24.1 to the Registrant's Form
                                                                                      S-4, Amendment #1, dated July 2, 1998
                                                                                      (file no. 333-56857)

    27.1*      Financial Data Schedule.
</TABLE>

----------
*     Filed herewith


                                       77
<PAGE>
                                   SIGNATURES

      Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, Alliance Laundry Systems LLC has duly caused this report
to be signed on its behalf by the undersigned, thereto duly authorized, in the
city of Ripon, state of Wisconsin, on the 28th day of March 2001.

        Signature                         Title                       Date
        ---------                         -----                       ----

                                     Chairman and CEO
-------------------------                                         --------------
Thomas L'Esperance

                            Vice President and Chief Financial
                                         Officer
-------------------------                                         --------------
Bruce P. Rounds




Date: March 28, 2001

      Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below as of March 28, 2001, by the following persons on
behalf of the registrant and in the capacities indicated:


   -------------------------------       ------------------------------
   Thomas F. L'Esperance                 Philip S. Taymor
   Chief Executive Officer and           Manager
   Manager


   -------------------------------       ------------------------------
   Edward W. Conard                      Robert C. Gay
   Manager                               Manager


   -------------------------------       ------------------------------
   Stephen C. Sherrill                   Stephen M. Zide
   Manager                               Manager


                                       78