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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 June 27, 1999.

                                       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 333-31187

                       W.R. CARPENTER NORTH AMERICA, INC.
             (Exact name of registrant as specified in its charter)

            Delaware                                       54-1049647
(State or other jurisdiction of                          (I.R.S. Employer
 incorporation or organization)                         Identification No.)

                             801 South Pine Street
                            Madera, California 93637
              (Address of principal executive offices and zip code)

                                 (559) 662-3900
              (Registrant's telephone number, including area code)

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

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

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to 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. [ ] Not applicable.

State the aggregate market value of the voting and non-voting common equity held
by non-affiliates - Not applicable.

At September 27, 1999, there were 55,000 shares of Class A common stock, $1.00
par value, and 5,000 shares of Class B common stock, $1.00 par value, of the
registrant issued and outstanding.

                       DOCUMENTS INCORPORATED BY REFERENCE

                                 Not Applicable.



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<TABLE>
<CAPTION>
                                     PART I
<S>     <C>                                                                                       <C>
Item 1. Business ...........................................................................       1

Item 2. Properties .........................................................................       8

Item 3. Legal Proceedings ..................................................................       9
Item 4. Submission of Matters to a Vote of Security Holders ................................      10

                                    PART II

Item 5. Market for Company's Common Equity and Related Stockholder Matters .................      11
Item 6. Selected Financial Data ............................................................      12
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations     14
Item 7A. Quantitative and Qualitative Disclosures About Market Risk ........................      21
Item 8. Financial Statements and Supplementary Data ........................................      22
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure      42

                                    PART III

Item 10. Directors and Executive Officers of the Company ...................................      43
Item 11. Executive Compensation ............................................................      44
Item 12. Security Ownership of Certain Beneficial Owners and Management ....................      46
Item 13. Certain Relationships and Related Transactions ....................................      47

                                    PART IV

Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K ..................      49
</TABLE>



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FORWARD-LOOKING STATEMENTS

        This report contains forward-looking statements, usually containing the
words "estimate," "project," "expect," or similar expressions. Those statements
are subject to uncertainties, including those discussed in this report,
particularly in "Management's Discussion and Analysis of Financial Condition and
Results of Operations" on pages 14 through 20. These uncertainties could cause
actual results to differ materially. Readers are cautioned not to place undue
reliance on these forward-looking statements, which speak only as of the date
hereof. For additional information regarding such forward-looking statements,
see "Management's Discussion and Analysis of Financial Condition and Results of
Operations--Forward-Looking Statements," on page 14.

                                     PART I

ITEM 1. BUSINESS.

GENERAL

        W.R. Carpenter North America, Inc. ("the Company") was incorporated in
1975 under the laws of Delaware and serves as the holding company for its two
operating subsidiaries, UpRight, Inc. ("UpRight') and Horizon High Reach, Inc.
("Horizon").

        UpRight's stock was publicly traded from 1980 until 1988, when it was
acquired by an affiliate of the Company. In 1988, through a corporate
reorganization, UpRight became a wholly owned subsidiary of the Company. Prior
to 1989, Horizon was an independent company in the business of renting and
selling aerial work platform equipment in Southern California. In 1989, UpRight
acquired the assets of Horizon which were merged into the retail division of
UpRight's North American Operations. In 1994, Horizon became a wholly owned
subsidiary of the Company. Although Horizon distributes UpRight products, the
two companies have separate management teams and operate on an independent
basis.

                                     UPRIGHT

        UpRight is a leading manufacturer of aerial work platforms, including
scissor lifts, boom lifts, portable lifts, and aluminum scaffolding. UpRight has
been manufacturing powered scissor lifts since 1974 as an outgrowth of its
leadership in the development and sale of aluminum scaffolding. UpRight sells
its products through an extensive network of North American and international
equipment dealers and rental companies. UpRight's customers rent, and to a
lesser degree sell, its aerial work platforms to end users in construction,
commercial, industrial and institutional markets.

PRODUCTS

        UpRight's aerial work platform product mix consists of four major
categories of equipment: scissor lifts, boom lifts, portable lifts and aluminum
scaffolding.

        Scissor Lifts. Self-propelled scissor lifts feature work platforms
mounted on top of scissor-type or other vertical lifting mechanisms, which, in
turn, are mounted on mobile, four-wheel chassis. These machines are designed to
permit workers to position themselves and their tools and materials safely,
easily and quickly in elevated work areas. They can be maneuvered forward or
backward and steered in any direction by the operator from the work platform,
even while elevated. The uses and applications for scissor lifts are varied and
include non-residential construction, warehousing, renovations and retooling and
maintenance of manufacturing plants and institutional facilities. Equipment
Manufacturers Institute (EMI) data indicates that industry shipments of
self-propelled scissor lifts increased from approximately 11,300 units in 1990
to approximately 48,600 units in 1998, representing a compound annual growth
rate of 20% during such period.

        UpRight offers scissor lifts with maximum platform heights ranging from
12 feet to 50 feet; and platform sizes ranging from 2.4 by 3.4 feet, to 5.8 by
19.3 feet. Rated lift capacities range from 500 to 2,000 pounds. UpRight offers
scissor lifts powered by electric motors; gasoline, diesel, or propane engines;
or a combination of diesel and electric power (bi-energy). Several internal
combustion engine powered models are available with four-wheel drive. Dealer net
prices for UpRight's standard models range from approximately $7,500 to $50,000.
Scissor lifts contributed 56%, 74%, and 77% of the Company's revenues for fiscal
years 1999, 1998, and 1997, respectively.

        Boom Lifts. Boom lifts are especially useful for reaching over machinery
and equipment that is mounted on floors and for reaching other elevated
positions not easily accessed by other vertical lifting devices. Self-propelled
boom lifts may be maneuvered in a manner similar to scissor lifts. In addition,
the boom may be rotated up to 360 degrees in either direction. Boom lifts have
smaller platforms and less lifting capacities than larger scissor lift models.
In addition to applications similar to scissor lifts, boom lifts are used for
infrastructure construction, petroleum and chemical refineries, as well as ship
construction, repair and maintenance.



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According to industry sources, industry shipments of self-propelled boom lifts
increased from approximately 4,100 units in 1990 to approximately 19,300 units
in 1998, representing a compound annual growth rate of 21% during such period.

        In 1997 UpRight introduced its first line of self-propelled boom lifts.
Since that time, UpRight has systematically deepened its boom offerings,
targeting high demand product segments. Maximum platform heights range from 46
to 80 feet, with outreach of up to 72 feet. Boom lifts are offered with electric
motors; gasoline, diesel, or propane engines; or a combination of diesel and
electric power (bi-energy). Several internal combustion engine powered models
are available with four-wheel drive. Dealer net prices for UpRight's standard
models range from approximately $38,000 to $108,000. Boom lifts contributed 10%,
12%, and 3% of the Company's revenues for fiscal years 1999, 1998, and 1997,
respectively.

        Portable Lifts. Portable lifts consist of a work platform attached to a
telescopic mast that extends vertically, which in turn is mounted on a
push-around base. These machines, while in their retracted position, can fit
through standard door openings and can be loaded into a standard pickup truck
for ease in transport. Applications for this class of equipment include
institutional and commercial maintenance, distribution and retail centers,
airports and public buildings, places of worship and entertainment facilities.

        UpRight offers portable lifts with maximum platform heights ranging from
20 feet to 40 feet. These models are available in either battery or AC power
configurations. In fiscal year 1999, UpRight introduced a portable lift model
featuring a self-propelled base. This machine can be maneuvered forward or
backward and steered in any direction by the operator from the work platform,
even while elevated. Current dealer net prices for UpRight's standard models
range from approximately $3,400 to $6,600.

        Scaffolding. UpRight first introduced aluminum scaffolding in 1947 and
today is considered to be the North American leader in this product segment.
Scaffolding height can be adjusted by mounting individual sections on top of one
another up to a maximum height of approximately 100 feet. Today, scaffolding is
still a major rental and sales item for use on certain construction and
maintenance projects. Revenue from scaffolding in fiscal year 1999 was $5.9
million, representing approximately 2.9% of the Company's revenue.

PRODUCT DEVELOPMENT STRATEGY

        UpRight's growth strategy includes developing new products to access
fast growing complementary product segments. In keeping with this strategy,
UpRight's core scissor lift line was broadened to include self-propelled boom
lifts. Having initially targeted high volume boom segments, UpRight is
developing additional models to fill out this line. UpRight is in the process of
developing a line of telescopic material handlers. Prototypes of machines in the
two largest product segments of telescopic material handlers have been completed
and are currently undergoing testing.

        Telescopic material handlers are rough terrain vehicles used to
transport, lift and position materials between ground locations, between
vehicles and to elevations up to five stories in height. This equipment is
typically utilized in North America by residential and non-residential building
contractors to handle a wide range of building materials and components. In
addition, the availability of multiple attachments increases the versatility and
applications for these machines. Many of UpRight's aerial work platform
customers also sell and rent telescopic material handlers. According to industry
estimates, shipments of telescopic material handlers in North America grew from
approximately 2,400 units in 1990 to approximately 12,000 units in 1998,
representing a compound annual growth rate of 22% during such period.

        UpRight invests significantly in product development and
diversification, including improvement of existing products. Research and
development expenses of UpRight have been $8.7 million, $6.0 million and $4.3
million for fiscal years 1999, 1998 and 1997, respectively. New and redesigned
products introduced in the past two years accounted for approximately 28% of
UpRight's sales in fiscal year 1999.

MARKETING AND DISTRIBUTION

        UpRight sells its products through an extensive network of North
American and international equipment dealers and rental companies, including
Horizon. For fiscal year 1999, approximately 45% of UpRight's revenue was
generated by sales to customers outside of North America, which UpRight's
management believes is among the highest percentages of revenue from
international sales of any aerial work platform manufacturer.

        UpRight's customers rent, and to a lesser degree sell, its aerial work
platforms to end users in construction, commercial, industrial and institutional
markets. These distributors also provide service support for UpRight machines.
UpRight supports the sales, service and rental programs of its distributors with
field sales support, product advertising, cooperative promotional programs,
major trade show participation and distributor personnel training in service,
safety and sales of all products UpRight manufactures and distributes.



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        The primary customers for aerial work platforms are equipment rental
companies. Over the past several years, the North American equipment rental
industry has undergone significant consolidation. A number of UpRight's
customers have been acquired by large national rental companies. By
consolidating, these customers have gained purchasing power which has resulted
in concessions from manufacturers, including lower equipment prices, extended
financing terms, and the carrying of increased inventory to meet rapid delivery
requirements of customers. Management believes that UpRight's international
diversification and relationship with Horizon make the Company less dependent on
the business of the large national rental companies than many of its
competitors.

        During fiscal years 1999, 1998 and 1997, UpRight's ten largest
customers, other than Horizon, together accounted for approximately 45%, 64% and
63% of UpRight's revenue, respectively. During fiscal year 1999, only one of
UpRight's customers accounted for more than 10% of the Company's revenue.
UpRight (U.K.) Limited (formerly Instant Zip-Up Limited) accounted for 19.1% of
UpRight's revenue and 14.7% of the Company's revenue for fiscal year 1999. An
affiliate of the Company owns a minority voting interest in UpRight (U.K.)
Limited. During fiscal year 1998, two of UpRight's customers accounted for 15.6%
and 12.8% of the Company's revenue, and in fiscal year 1997, two of UpRight's
customers accounted for 14.9% and 10.6% of the Company's revenue.

MANUFACTURING

        UpRight currently manufactures scissor lifts, portable lifts, and
aluminum scaffolding in Selma, California. UpRight manufactures boom lifts in a
new facility in Madera, California, located 40 miles north of Selma.
Construction of the Madera facility was completed in December 1998, including a
telescopic material handler assembly building. UpRight transferred boom lift
production from Selma to Madera in January 1999.

        The ramp-up of production at the Madera facility has been slower than
expected as UpRight underestimated the time necessary to establish a productive
workforce. While there is an abundance of unskilled labor in the Madera area,
hiring a new workforce with the requisite skills proved more difficult than
anticipated. UpRight is addressing this issue by providing training programs for
its personnel, including welders and assemblers. The continuous flow paint
facility at the Madera facility has also taken longer to come on line than
anticipated, adding substantial labor hours to each machine. UpRight is
currently painting one production boom model using this state-of-the-art paint
facility, and management believes that it will be fully operational for all
models by November 1999.

        UpRight has also experienced capacity constraints at the Selma facility,
resulting primarily from increasing international customer demand for their
equipment to be painted particular colors, which usually include two tone color
schemes. The paint facilities at Selma do not have the capacity to undertake
this task efficiently at the volumes experienced in the second half of fiscal
1999. As a result, UpRight is currently in the process of installing a new
liquid paint system and negotiating to expand the existing powder paint system
at Selma. Management expects that the liquid paint facility will be operational
in January 2000 at an estimated cost of $5.0 million while the powder paint
facility is expected to be operational in June 2000 at an estimated cost of $1.5
million.

        During fiscal year 2000, as capacity constraints are removed, UpRight
expects to adopt a manufacturing strategy of maintaining a relatively constant
level of production throughout the year. Although this strategy will most likely
result in elevated inventory levels in the historically slower first half of the
fiscal year, it is anticipated that it will smooth the manufacturing cycle
throughout the year, leading to more efficient use of facilities, personnel and
suppliers. In addition, this strategy is expected to increase UpRight's ability
to meet rapid delivery requirements of customers.

        Historically, Upright has maintained a mix of "regular" and "temporary"
personnel, providing the flexibility to quickly adjust production levels during
periods of changing market demand. In response to smoother production levels,
and in order to retain the skilled workforce being developed, UpRight plans to
reduce the percentage of temporary workers.

MATERIAL AND SUPPLY ARRANGEMENTS

        UpRight obtains raw materials, principally steel and aluminum, and other
component parts, most notably engines, drive motors, tires, bearings,
electronics and hydraulics, and supplies from third parties. Although
alternative suppliers are available for all raw materials and components,
UpRight could experience delays in obtaining components meeting the requisite
specifications from alternative suppliers in the event a principal supplier was
unable to supply a particular component. UpRight seeks to manage the risk of
unavailability of key components and raw materials through supply chain
management initiatives including supplier certification.



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COMPETITION

        In selling its aerial work platform products, UpRight experiences two
principal types of competition: from alternative equipment and from other
manufacturers of aerial work platforms. UpRight competes with more traditional
means of accomplishing the tasks performed by aerial work platforms, including
truck- and trailer-mounted booms and, to a more limited extent, ladders,
scaffolding and other devices. UpRight's management believes that in many
applications its aerial work platforms are safer, more versatile and more
efficient, taking into account labor costs, than those traditional methods and
that its aerial work platforms enjoy competitive advantages when the job
requires frequent movement from one location to another at the same site or when
there is a need to return to the ground frequently for tools and materials.

        UpRight competes in the aerial work platform industry primarily with
several other manufacturers, including JLG Industries ("JLG"), Genie Industries
("Genie"), Grove Worldwide, and Skyjack Inc. ("SkyJack"), which each manufacture
scissor lifts, boom lifts and portable lifts; OmniQuip International Inc.
("OmniQuip") and Terex Corp., which each manufacture scissor lifts and boom
lifts; and Mayville Engineering Company, which manufactures scissor lifts and
portable lifts. These companies compete on the basis of product quality, price,
financing, delivery, and sales and service support. Management believes JLG and
Genie each have over 30% share of the aerial work platform market, over twice
the share of the nearest competitor.

        Management believes that UpRight's scissor lift product line is as
extensive as that of any other manufacturer in the industry, placing UpRight
among the top four scissor lift manufacturers worldwide. Since the introduction
of its first boom product line in 1997, UpRight has been systematically
deepening its boom offerings, targeting high demand product segments. However,
several of UpRight's competitors currently offer a more comprehensive boom lift
product line.

        Certain of UpRight's competitors are part of, or are affiliated with,
companies that are larger and have greater financial resources than UpRight. For
example, Textron Inc. recently agreed to buy OmniQuip. Several of UpRight's
competitors, including JLG, Genie, and SkyJack, have significantly increased, or
are in the process of significantly increasing, their manufacturing capacity.

EMPLOYEES

        UpRight had 988 persons employed as of June 27, 1999. None of UpRight's
employees is subject to collective bargaining agreements.

                                     HORIZON

        Horizon is a leading industrial equipment rental, sales and service
company specializing in aerial work platforms, including scissor lifts, boom
lifts and portable lifts, telescopic material handlers and forklifts,
scaffolding and general rental equipment, serving a diverse range of
approximately 10,000 active customers from 16 domestic locations. Horizon offers
a full service, integrated approach to serving its customers' needs by providing
rentals of equipment, sales of new and used equipment, sales of spare parts and
repair and maintenance services. For fiscal year 1999, approximately 49% of
Horizon's revenue was generated by equipment rentals, approximately 44% of
Horizon's revenue was generated by sales of new and used equipment, and the
remainder was generated by training services, sales of spare parts and certain
related customer services. Management believes that, among major industrial
equipment rental companies, Horizon has one of the highest ratios of sales to
rentals in the industry. Within the last five fiscal years, Horizon has
strategically expanded its product offerings to include, in addition to UpRight
products, certain additional product lines from other leading manufacturers.
Horizon acts as a distributor for UpRight products in all of Horizon's
designated market areas. Horizon and UpRight operate independently, and all
transactions between them are conducted on an arm's-length basis.

PRODUCTS AND SERVICES

        Equipment rental represents Horizon's principal line of business. In
fiscal year 1999, equipment rental revenue, together with rental-related
revenue, such as repair services, delivery charges and damage waiver income,
accounted for approximately 49% of Horizon's revenue. Horizon also acts as a
distributor of new equipment on behalf of UpRight and certain other nationally
known equipment manufacturers. In fiscal year 1999, approximately 44% of
Horizon's revenue was derived from the sale of new and used equipment, of which
approximately 42% was equipment manufactured by UpRight. Revenue from the sale
of parts and merchandise accounted for approximately 7% of Horizon's revenue in
fiscal year 1999.

        Rental Equipment. Horizon rents over 480 different models of aerial work
platforms and other industrial equipment as of June 27, 1999, consisting of
scissor lifts, boom lifts (including one truck-mounted boom lift model),
portable lifts and telescopic material handlers and forklifts, with a total
exceeding 4,250 pieces of equipment (excluding scaffolding and general rental).
The original equipment cost of Horizon's rental fleet was approximately $81.7
million as of such date. In addition, Horizon rents general rental



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equipment in two branches, with an original equipment cost of approximately $3.0
million as of such date. Horizon also maintains a comprehensive inventory of
aluminum scaffolding with an original equipment cost of approximately $977,000
as of such date. The distribution of Horizon's total rental equipment fleet
(based on original equipment cost) as of June 27, 1999 was: (i) scissor lifts
(42%); (ii) boom lifts (29%); (iii) telescopic material handlers (18%); (iv)
general rental equipment (4%); (v) forklifts (3%); (vi) scaffolding (1%); (vii)
portable lifts (1%); and (viii) other equipment (2%). The mix of rental
equipment at each of Horizon's 16 domestic locations is tailored to meet the
demands of the local customer base.

        Sales of New Equipment. In addition to equipment rental, Horizon is a
distributor for various equipment manufacturers in certain of its designated
market areas, including UpRight (scissor lifts, boom lifts, portable lifts and
aluminum scaffolding), Denka Lift (specialized boom lifts), Mitsubishi
(forklifts), OmniQuip (Sky-Trak telescopic material handlers), Carelift
Equipment (telescopic material handlers) and Elliott (truck-mounted boom lifts).
Horizon also sells equipment manufactured by Genie (boom lifts). Horizon
believes that, by offering new equipment for sale, it strengthens its
relationships with its existing rental customers who may want to purchase
certain pieces of often-utilized equipment, and it enables Horizon to develop
new rental customer relationships as it sells new equipment to customers who
rent equipment to supplement their owned machines.

        Sales of Used Equipment. Horizon routinely sells used equipment to
adjust the size and composition of its rental fleet to changing market
conditions and as part of its ongoing commitment to maintain a modern,
high-quality rental fleet. Horizon believes it achieves favorable sales prices
for its used equipment as a result of its preventive maintenance program and its
practice of selling used equipment before it becomes irreparable or obsolete.
Horizon's management attempts to optimize the timing of sales of used equipment
by taking into account maintenance costs, rental demand patterns and resale
prices. Horizon sells used equipment to its existing rental customers as well as
to other used equipment buyers. In fiscal year 1999, Horizon significantly
increased its sales of used equipment in order to reduce the level of equipment
that was five years old or older. The average age of Horizon's rental fleet
decreased from 39 months at June 1997 to 25 months at June 1999.

        Sales of Parts and Merchandise. Horizon also sells a wide range of
repair and replacement parts, supplies and safety equipment, including
harnesses, belts and lanyards, as a complement to its equipment rental and sales
businesses. Management believes that the sales of parts, supplies and safety
equipment enhance the ability of Horizon to attract and retain customers.

        Service. Horizon also generates revenue from maintenance and service by
providing various options to its customers, including service on a contract or
time-and-materials basis for customers who own their equipment and over the life
of a lease for customers who lease their equipment. Horizon's trained personnel
perform both the maintenance and service work on Horizon's rental fleet and to
customers who own equipment. Horizon's safety department also provides safety
training and operator training courses, including operator certification and
"train-the-trainer" programs.

OPERATIONS

        Horizon's sales and rental functions are managed at each of its
locations. Each year, location managers budget expected new equipment sales and
rental equipment expenditures and parts and service needs for their respective
markets.

        Horizon seeks to manage its rental fleet to optimize the return on its
investment in rental equipment. Senior management regularly interacts with
branch managers to monitor equipment utilization rates and indicated demand at
each location in order to determine and react to trends and imbalances between
supply and demand for equipment. In late fiscal year 1998, Horizon divided its
operations into three regions, which are overseen by regional managers. The use
of regions has superseded the need for a "hub-and-spoke" network among certain
of its branch and satellite locations. Through its information systems,
employees at locations within a certain region are able to locate a specific
item within that geographic region and determine whether that item is currently
rented to a customer, undergoing maintenance or available for delivery.
Depending on a number of objective factors, such as transportation costs between
branches and length of rental, management will determine whether the equipment
should be transferred to a different branch.

        During fiscal year 1999, Horizon acquired the stock of an aerial work
platform sales, rental and repair company in Commerce City, Colorado for $2.3
million plus $3.3 million of assumed debt.

        Horizon utilizes an integrated AS400 information system that allows both
the corporate headquarters and the branch locations to have instantaneous access
to all inventory and rental information. The system also provides immediate
access to customer records and needs and management believes enables Horizon to
move its assets among locations to optimize equipment utilization and maximize
customer service. Management believes that its information systems are an
integral component in its ability to manage its locations effectively.



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CUSTOMERS

        Horizon serves a diverse range of approximately 10,000 active customers.
No single customer of Horizon accounted for more than 1% of Horizon's revenue
during fiscal years 1999, 1998 and 1997. Horizon classifies its customers as
either construction or industrial end users. In fiscal year 1999, approximately
59% of Horizon's revenue was derived from construction end users, with the
remaining 41% being derived from industrial end users. In fiscal year 1998,
approximately 54% of Horizon's revenue was derived from construction end users,
with the remaining 46% being derived from industrial end users. In fiscal year
1997, approximately 53% of Horizon's revenue was derived from construction end
users, with the remaining 47% being derived from industrial end users. The
increase in the percentage of revenue derived from construction related users in
fiscal year 1999 compared to fiscal year 1998 is due to an increase in Horizon's
sales and rental of telescopic material handlers during such period.
Construction customers include users in specialized trades, such as
electricians, painters, HVAC and mechanical contractors. Industrial customers
include users engaged in the maintenance of warehouses, manufacturing plants and
commercial and institutional facilities.

COMPETITION

        The equipment rental industry has undergone significant consolidation
over the past several years. These large national rental companies have acquired
numerous companies in all regions of the country. In a number of large
metropolitan areas, notably New York and Los Angeles, management estimates that
the large national rental companies have market shares greater than 60%. The
largest national rental company, United Rentals, has reported annualized revenue
of approximately $2 billion in 700 locations, with Atlas-Copco, through its
owned companies Prime and Rental Service Corporation, reporting approximately
$1.2 billion in revenue in 300 locations. Horizon competes with some or all of
these large national rental companies in each of its locations.

        At this point, management believes that such consolidation has had only
a negligible effect on Horizon's operations. On the positive side, rental rates
have tended to stabilize as companies that had been former competitors have been
consolidated. In addition, Horizon has been able to hire a number of quality
employees (mechanics, drivers, operations) in an otherwise tight job market. On
the negative side, with so many locations in a given market, the large national
rental companies are often better able to deliver equipment to the end user on a
timely basis.

SUPPLIERS

        Each Horizon branch carries a comprehensive line of UpRight equipment in
its rental fleet, including scissor lifts, boom lifts and portable lifts, as
well as generally carrying aluminum scaffolding. Each location also carries a
variety of equipment from other manufacturers, including boom lifts and
forklifts. Horizon purchases all of its equipment directly from the original
equipment manufacturer. UpRight accounted for approximately 60%, 45%, and 53% of
Horizon's total capital purchases of equipment for fiscal years 1999, 1998 and
1997, respectively. Horizon believes it could readily replace any of its
suppliers for rental equipment if it were necessary.

SALES AND MARKETING

        In the sales and rental of aerial work platforms, Horizon's strategy is
to focus on small- to mid-sized end users. Horizon concentrates on providing a
wide selection of equipment choices to a large, diversified customer base while
providing comprehensive customer service and technical support.

        There are currently 78 employees in Horizon's sales force, including
specialists who focus on the construction industry, with a primary focus on
equipment rentals, specialists who focus on the industrial market, with a
primary focus on equipment sales, and special account managers who focus on
specialized industries and end users. Horizon's sales force has been with
Horizon an average of approximately three years. Sales personnel are compensated
on a salary-plus-commission basis and report directly to branch managers or
sales managers.

        Horizon promotes its services through a combination of direct sales
contacts, telemarketing, listings in telephone directories, subscriptions to
industry data base lists and pursuing leads obtained from manufacturers. In
addition, each Horizon field office annually participates in approximately five
informational trade shows in their market area and, combined with the
manufacturers' national shows, Horizon sales representatives annually attend
approximately 60 trade shows on a company-wide basis.

EMPLOYEES

        As of June 27, 1999, Horizon had a total of 329 full-time employees,
including 14 personnel in the Fresno headquarters who provide administrative and
accounting services. Each branch location averages 14 to 23 people, typically
structured as follows: one manager, three to four office persons, two to five
sales persons, five to eight mechanics and three to five truck drivers. Horizon



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is unionized in four locations: Ridgefield Park and Lakewood, New Jersey;
Highland, New York; and Chicago, Illinois. In New Jersey and New York, a total
of 19 mechanics and drivers are members of the International Brotherhood of
Operating Engineers, while the Chicago branch has a total of five mechanics and
drivers represented by the Automobile Mechanics' Local #701.



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ITEM 2. PROPERTIES.

        The Company maintains its corporate and administrative offices at
UpRight's Madera, California facility at 801 South Pine Street, Madera,
California 93637, telephone (559) 662-3900.

        UpRight maintains its headquarters and manufacturing operations at its
owned facilities at 1775 Park Street, Selma, California 93662, telephone (559)
891-5200. UpRight has approximately 335,000 square feet of manufacturing space
at its Selma, California facility, where it manufactures all of the scissor and
portable lift products as well as scaffolding. To support its product line
expansion strategy, UpRight added a 325,000 square foot facility in Madera,
California, where it manufactures boom lifts and which is expected to be
utilized to manufacture telescopic material handlers. The Madera building
program was financed through a 15 year bank loan. UpRight also leases a sales
office and training facility in Cincinnati, Ohio with a five-year term and a
storage facility in Selma, California with a six-month term with optional
six-month renewals.

        Horizon's corporate headquarters are located at 1540 East Shaw Avenue,
Suite 123, Fresno, California 93710, telephone (559) 248-8180. Horizon currently
has 16 branch facilities at the following locations: Atlanta, Georgia; Charlotte
and Raleigh, North Carolina; Beltsville, Maryland; Hayward, Napa, Sacramento and
Brea, California; Elmhurst, Illinois; Houston, Katy (Houston), and Dallas,
Texas; Commerce City (Denver), Colorado; Ridgefield Park and Lakewood, New
Jersey; and Highland, New York. Horizon's corporate headquarters are leased for
a term expiring in August 2000. The branch facilities in Dallas and Katy, Texas,
and Brea, California are owned by the Company. Otherwise, Horizon's branch
facilities are typically leased for terms ranging from three to five years with
options to extend or renew. Horizon's management believes it would be able to
relocate its branches to alternate locations on comparable lease terms.

        The Company's properties used in its operations are considered to be in
good operating condition, well maintained and suitable for their present
purposes.



Page 8
<PAGE>   11

ITEM 3. LEGAL PROCEEDINGS.

        Use of products manufactured by UpRight and sold or rented by Horizon
involves exposure to personal injury as well as property damage, particularly if
operated carelessly or without proper maintenance, and liability exposure for
the Company, UpRight and Horizon.

        There are various claims and litigation pending against UpRight and
Horizon for personal injury and property damage arising out of incidents
involving the use of UpRight products and, in the case of Horizon, products of
UpRight and other manufacturers. The Company believes that litigation of this
type is common in the businesses of UpRight and Horizon and for other
manufacturers and distributors in the aerial work platform industry. Although
the outcome of such litigation cannot be predicted with certainty, it is the
opinion of management, based on the advice of legal counsel and other
considerations, that (except as described below) all claims, legal actions,
complaints and proceedings which have been filed or are pending against UpRight
and Horizon, as well as possible future claims, are adequately covered by the
Company's comprehensive general liability insurance policies, subject to certain
deductible amounts and maximum coverage limits.

        The Company has accrued what management believes are adequate reserves
with respect to pending and potential claims. Management believes that UpRight's
and Horizon's potential exposure to product liability/general claims may be
affected by the substantial growth in usage of aerial work platforms over the
past several years, which has dramatically increased machine population and the
number of users. There can be no assurance that existing or future claims will
not exceed the level of UpRight's and Horizon's insurance, or that such
insurance will continue to be available on economically reasonable terms, or at
all. In addition, certain types of claims, such as claims for punitive damages
or for damages arising from intentional misconduct, generally are not covered by
insurance. Since the acquisitions of UpRight and Horizon by the Company, neither
subsidiary has been required to pay any claim for punitive damages. Product
liability costs incurred by the Company, including premiums and self-insurance
retention payments for legal judgments and settlement costs, for fiscal years
1999, 1998 and 1997 approximated 0.2%, 1.7%, and 2.2% of revenue, respectively.
Various legal actions (in areas other than product liability) may arise in the
ordinary course of business from time to time against the Company, UpRight or
Horizon. Other than with respect to product liability or as described below,
there is no material litigation currently pending against the Company, UpRight
or Horizon. None of the litigation pending against UpRight is expected to have a
material adverse effect on the Company's financial condition, results of
operations or liquidity. Horizon has been sued for damages arising out of a
traffic accident involving a Horizon employee. The matter is in the early stages
of investigation, pleading and discovery. No demand has been received. However,
the initial "prayer" for damages in the complaint, which was filed in the
United States District Court for the Eastern District of Virginia,
Alexandria Division, in July 1999, by Roy Woodle, seeks to recover $25.0 million
in general damages, which amount exceeds Horizon's $11,000,000 combined policy
limits of primary and excess insurance for this type of loss. The complaint
alleges a cause of action for negligence. Based upon investigation to date and
consultation with the Company's insurance carrier and legal counsel, management
does not believe that the ultimate resolution of this matter will have a
materially adverse effect on the Company's financial condition, results of
operations or liquidity.



Page 9
<PAGE>   12

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

        None.



Page 10
<PAGE>   13

                                     PART II

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

        There is no public market for the common stock or equity securities of
the Company. See "Item 12" and "Item 7--Management's Discussion and Analysis of
Financial Condition and Results of Operations--Liquidity and Capital Resources."



Page 11
<PAGE>   14

ITEM 6. SELECTED FINANCIAL DATA.

        The following Selected Financial Data has been taken or derived from the
audited consolidated financial statements of the Company and should be read in
conjunction with and is qualified in its entirety by the full consolidated
financial statements, related notes and other information included elsewhere
herein.

<TABLE>
<CAPTION>
                                                                           FISCAL YEAR ENDED

                                                   JUNE 27,      JUNE 28,      JUNE 29,     JUNE 30,     JULY 2,
                                                     1999          1998         1997          1996         1995
                                                    --------      --------     --------     --------     --------
                                                                          (DOLLARS IN THOUSANDS)
<S>                                                 <C>           <C>          <C>          <C>          <C>
OPERATING STATEMENT DATA:

Revenue (1) .................................       $200,197      $170,797     $139,904     $117,903     $ 85,157
Cost of revenue .............................        146,814       117,844       94,315       78,638       58,217
                                                    --------      --------     --------     --------     --------

Gross profit ................................         53,383        52,953       45,589       39,265       26,940

Research and development expenses ...........          8,691         5,952        4,281        2,865        1,817
Product liability costs .....................            351         2,807        3,115        3,015        2,094

Selling, general, and administrative expenses         31,623        23,902       18,117       15,124       13,982
                                                    --------      --------     --------     --------     --------

Income from operations ......................         12,718        20,292       20,076       18,261        9,047
Interest expense, net .......................         12,110         9,421        3,983        2,907        2,566
Other Expense, net ..........................            194             6           --          539          186
                                                    --------      --------     --------     --------     --------
Income before provision for Income taxes ....            414        10,865       16,093       14,815        6,295
Provision for income taxes ..................            211         3,206        6,131        6,047        2,608

Net income ..................................       $    203      $  7,659     $  9,962     $  8,768     $  3,687
                                                    ========      ========     ========     ========     ========

BALANCE SHEET DATA:

Cash and cash equivalents ...................         13,328        63,669       77,345       11,164        4,314
Working Capital (deficit) ...................         54,709        88,490       98,835        7,877       (4,271)
Total assets ................................        224,020       196,659      167,825       75,985       55,082
Total debt ..................................        150,606       124,127      113,884       36,999       30,456
Stockholder's equity ........................         28,393        34,690       27,031       17,069        8,298

OTHER DATA:

EBITDA (2) ..................................       $ 26,388      $ 28,345     $ 25,880     $ 22,695     $ 12,626
</TABLE>



Page 12
<PAGE>   15

(1)     The following details UpRight's and Horizon's revenue, and the
        elimination of inter-company sales for fiscal years 1999, 1998, 1997,
        1996 and 1995:

<TABLE>
<CAPTION>
                                                     FISCAL YEAR ENDED
                                                     -----------------
                         JUNE 27,       JUNE 28,       JUNE 29,       JUNE 30,       JULY 2,
                           1999           1998           1997           1996          1995
                        ---------      ---------      ---------      ---------      ---------
                                                (DOLLARS IN THOUSANDS)
<S>                     <C>            <C>            <C>            <C>            <C>
UpRight ...........     $ 153,875      $ 137,975      $ 110,471      $  93,273      $  65,593
Horizon ...........        77,110         54,725         44,315         38,112         32,236
Inter-company sales      (30,788)        (21,903)       (14,882)       (13,482)       (12,672)
                        ---------      ---------      ---------      ---------      ---------
                        $ 200,197      $ 170,797      $ 139,904      $ 117,903      $  85,157
                        =========      =========      =========      =========      =========
</TABLE>


(2)     EBITDA represents income before extraordinary item, net interest
        expense, financing costs, income taxes, depreciation and amortization
        and other expenses and income. The Company has included information
        concerning EBITDA in its annual report because it is used by certain
        investors as a measure of a company's ability to service its debt
        obligations. EBITDA should not be used as an alternative to, or be
        considered more meaningful than, operating income, net income or cash
        flow as an indicator of the Company's operating performance. In
        addition, in fiscal year 1999, depreciation and amortization includes
        $408 of accelerated amortization, resulting from impairment of certain
        long lived assets.



Page 13
<PAGE>   16
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.

FORWARD-LOOKING STATEMENTS:

        Certain statements in this Annual Report on Form 10-K include
forward-looking information within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934,
as amended, and are subject to the "safe harbor" created by those sections.
These forward-looking statements involve certain risks and uncertainties that
could cause actual results to differ materially from those in the
forward-looking statement. Such risks and uncertainties include, but are not
limited to, the following factors: substantial leverage of the Company;
industrial cyclicality; dependence on the construction industry; consolidation
of the customer base; dependence upon major customers; risks relating to growth;
significance of new product development; the need for continual capital
expenditures; competition; product liability; insurance; availability of product
components; reliance on suppliers; foreign sales; government and environmental
regulation; labor matters; holding company structure; restrictions under debt
agreements; fraudulent conveyance; and control by the sole stockholder.

GENERAL

        This discussion should be read in conjunction with the Company's
consolidated financial statements and the notes thereto appearing in Item 8 of
this Annual Report on Form 10-K.

        The Company's strategy is to create shareholder value by providing
capital, strategic and financial direction and management to its wholly owned
operating subsidiaries, UpRight and Horizon. Prior to fiscal year 1994, Horizon
was a division of UpRight, operating as a captive equipment dealer and
industrial equipment rental company in certain markets. In fiscal year 1994, the
Company decided each business would be managed and operated separately. All
inter-company transactions between UpRight and Horizon are currently, and are
intended to continue to be, conducted on an arm's-length basis. UpRight sells
equipment to Horizon for the same price it would otherwise charge a comparable
distributor. Horizon purchases equipment from UpRight, as well as from other
major manufacturers, including certain models and product lines that may be
produced by UpRight. The Company intends to maintain the distributor/supplier
relationship between the two subsidiaries. Sales to Horizon accounted for
approximately 19%, 16%, and 13% of UpRight's revenue for fiscal years 1999, 1998
and 1997, respectively. Purchases from UpRight accounted for 60%, 45% and 53% of
Horizon's total capital purchases of equipment for fiscal years 1999, 1998 and
1997, respectively. UpRight and Horizon maintain stand-alone financial
statements. Sales from UpRight to Horizon are reflected in UpRight's stand-alone
financial statements at the actual arm's-length price charged. Purchases by
Horizon from UpRight are reflected in Horizon's stand-alone financial statements
at dealer cost. "Dealer cost" means the price paid by Horizon to purchase
equipment from equipment manufacturers, including from UpRight on arm's-length
terms. All significant inter-company balances and transactions are eliminated in
consolidation.

        Demand in the aerial work platform and industrial equipment rental
industries has been historically related to the cyclical levels of construction
and industrial activity in North America, and may at times change dramatically.
The Company expects the aerial work platform industry will continue to be
dependent upon North American construction and industrial activity, although
international sales increasingly comprise a greater proportion of total industry
revenues. The Company believes that UpRight has among the highest percentages of
revenue from international sales of any aerial work platform manufacturer, and
that this diversification may help mitigate the impact of cyclical downturns in
North America. Horizon responds to downturns in the United States construction
market by delaying expansion capital expenditures and adjusting the timing of
replacement capital expenditures.



Page 14
<PAGE>   17

        The following table sets forth for the periods indicated certain
historical revenue and percentages from customer geographical segments:

<TABLE>
<CAPTION>
                                                             FISCAL YEAR ENDED
                                                             -----------------
                                      JUNE 27,                     JUNE 28,                  JUNE 29,
                                        1999                        1998                      1997
                                 -------------------        -------------------        -------------------
                                                              (DOLLARS IN MILLIONS)
<S>                              <C>           <C>          <C>           <C>          <C>           <C>
United States, Canada, Latin
   America .................     $132.0         65.9%       $115.2         67.4%       $ 96.8         69.2%
Europe .....................       64.3         32.1%         48.3         28.3%         35.3         25.2%
Pacific Rim ................        3.9          2.0%          7.3          4.3%          7.8          5.6%
                                 ------        -----        ------        -----        ------        -----
                                 $200.2        100.0%       $170.8        100.0%       $139.9        100.0%
                                 ======        =====        ======        =====        ======        =====
</TABLE>

RESULTS OF OPERATIONS

        The following table sets forth for the periods indicated certain
historical income statement data derived from the Company's consolidated
statements of operations expressed in dollars and as a percentage of net
revenue.

<TABLE>
<CAPTION>
                                                           FISCAL YEAR ENDED
                                                           -----------------
                                    JUNE 27,                    JUNE 28,                        JUNE 29,
                                      1999                        1998                            1997
                               -------------------        -------------------             -------------------
                                                       (DOLLARS IN THOUSANDS)
<S>                          <C>           <C>           <C>           <C>              <C>           <C>
Revenue ..............       $200,197         100.0%     $170,797         100.0%        $139,904         100.0%
Cost of revenue ......        146,814          73.3%      117,844          69.0%          94,315          67.4%
                             --------      --------      --------      --------         --------      --------
Gross profit .........         53,383          26.7%       52,953          31.0%          45,589          32.6%
Operating expenses ...         40,665          20.3%       32,661          19.1%          25,513          18.2%
                             --------      --------      --------      --------         --------      --------
Income from operations         12,718           6.4%       20,292          11.9%          20,076          14.4%
Interest expense, net          12,110           6.0%        9,421           5.5%           3,983           2.8%
Other  expense, net ..            194            .1%            6            --               --            --
Provision for
Income taxes .........            211            .1%        3,206           2.4%           6,131           4.4%
                             --------      --------      --------      --------         --------      --------
Net income ...........       $    203            .1%     $  7,659           4.5%        $  9,962           7.1%
                             ========      ========      ========      ========         ========      ========
EBITDA ...............       $ 26,388          13.2%     $ 28,345          16.6%        $ 25,880          18.5%
Depreciation &
  amortization .......         13,670                       8,053                          5,804
</TABLE>

SEGMENT OPERATIONS

        The Company believes its results of operations for its UpRight and
Horizon subsidiaries are most meaningful when analyzed from the perspective of
two arm's-length companies. The following table sets forth for the periods
indicated certain historical consolidating income statement data derived from
the Company's consolidated statements of operations expressed in dollars and as
a percentage of revenue.

        When equipment purchased from UpRight by Horizon is included in
Horizon's rental fleet, or held as sales inventory at the end of a reporting
period, the gross profit earned by UpRight on the sale of this equipment is
eliminated from the Company's consolidated gross profit. As Horizon's purchases
of equipment for rental fleet purposes vary by reporting period, and the level
of UpRight equipment held in sales inventory by Horizon fluctuates by reporting
period, the resulting elimination of gross profit on consolidation can cause
consolidated income from operations to fluctuate between reporting periods.



Page 15
<PAGE>   18

                      CONSOLIDATING STATEMENT OF OPERATIONS
                                 (IN THOUSANDS)
                                   (UNAUDITED)
                          12 MONTHS ENDED JUNE 27, 1999

<TABLE>
<CAPTION>
                                               COMPANY          HORIZON          UPRIGHT      ELIMINATIONS     CONSOLIDATED
                                               -------          -------          -------      ------------     ------------
<S>                                           <C>              <C>              <C>           <C>              <C>
Revenues
     Equipment Sales

          New ..........................                       $  30,315        $ 153,773       $ (30,788)       $ 153,300
          Used .........................                           7,109                                             7,109
     Rental and  Services ..............                          39,686              102                           39,788
                                              ---------        ---------        ---------        ---------       ---------
          Total Revenues ...............             --           77,110          153,875         (30,788)         200,197
Gross Profit
     Equipment Sales

          New ..........................                           6,318           35,630             121           40,834
          Used .........................                           2,109                                             2,109
     Rental and  Services ..............            322           13,710              (37)         (4,790)          10,440
                                              ---------        ---------        ---------        ---------       ---------
           Total Gross Profit ..........            322           22,137           35,593          (4,669)         53,383
           %  of  Revenues .............                            28.7%           23.1%                            26.7%
Operating expenses

     Selling, general and administrative      $   5,863           14,568          11,192                           31,623

     Product Liability .................                                             351                              351
     Research and development ..........                                           8,691                            8,691
                                              ---------        ---------       ---------         ---------      ---------
           Total Operating Expenses ....          5,863           14,568          20,234                --         40,665
Income/(Loss) from Operations ...........     $  (5,541)       $   7,569       $  15,359        $  (4,669)      $  12,718
           % of Revenues ...............                             9.8%           10.0%                             6.4%
</TABLE>



Page 16
<PAGE>   19

<TABLE>
<CAPTION>
                                                                    CONSOLIDATING STATEMENT OF OPERATIONS
                                                                               (IN THOUSANDS)
                                                                                 (UNAUDITED)
                                                                        12 MONTHS ENDED JUNE 28, 1998
                                               COMPANY         HORIZON           UPRIGHT       ELIMINATIONS     CONSOLIDATED
                                               -------         -------           -------       ------------     ------------
<S>                                           <C>             <C>               <C>            <C>              <C>
Revenues
     Equipment Sales

          New ..........................                      $   21,926        $ 137,975        $ (21,903)      $ 137,998
          Used .........................                           4,207                                             4,207
     Rental and Services ...............                          28,592                                            28,592
                                              ---------       ----------        ---------        ----------      ---------
          Total Revenues ...............             --           54,725          137,975          (21,903)        170,797
Gross Profit
     Equipment Sales

          New ..........................                           4,900           39,022             (867)         43,055
          Used .........................                           1,807                                             1,807
     Rental and Services ...............                          10,769                            (2,678)          8,091
                                              ---------       ----------        ---------        ---------       ---------
           Total Gross Profit ..........             --           17,476           39,022           (3,545)         52,953
           %  of  Revenues .............                            31.9%            28.3%                            31.0%
Operating expenses

     Selling, general and administrative      $   1,321           11,376           11,205                           23,902
     Product Liability .................                                            2,807                            2,807
     Research and development ..........                                            5,952                            5,952
                                              ---------        ---------        ---------        ---------       ---------
           Total Operating Expenses ....          1,321           11,376           19,964               --          32,661
Income/(Loss) from Operations ..........      $  (1,321)       $   6,100        $  19,058        $  (3,545)      $  20,292
           % of Revenues ...............                            11.1%            13.8%                            11.9%
</TABLE>


FISCAL YEAR  ENDED JUNE 27, 1999 COMPARED TO FISCAL YEAR ENDED JUNE 28, 1998

        Revenue increased by 17.2% to $200.2 million in fiscal year 1999 from
$170.8 million in fiscal year 1998. The increase of $29.4 million was primarily
attributable to increased revenue from sales of new equipment of $15.3 million
(including sales of UpRight equipment by Horizon) and increased rental and
service revenue for Horizon of $11.1 million. The primary reasons for the
increase in new equipment sales were UpRight's sales of large scissor lifts and
boom lifts and Horizon's sales of telescopic material handlers. The increase in
Horizon's rental and service revenue was primarily attributable to significant
rental fleet additions and the inclusion of results from businesses acquired
subsequent to the third quarter in fiscal year 1998.

        Gross profit for fiscal year 1999 was $53.4 million, an increase of $0.4
million over gross profit of $53.0 million for fiscal year 1998. The increase in
gross profit is attributable to higher revenue; however, gross margins decreased
to 26.7% for fiscal year 1999 compared to 31.0% for the previous fiscal year,
due to a combination of factors at UpRight and Horizon. During fiscal 1999,
UpRight faced increased competitive pricing pressure on its sales of new
equipment and inefficiencies in its manufacturing process. UpRight's
manufacturing inefficiencies were due to the ramp-up of production at the new
Madera facility caused by the slower than expected development of a trained,
productive workforce and delays in bringing on-line the continuous flow paint
facility. In addition, UpRight experienced paint capacity constraints at its
Selma facility. Gross profit was also negatively impacted due to increased sales
of lower margin forklifts and telescopic material handlers at Horizon, together
with lower sales prices on used equipment and increased depreciation expense,
and higher elimination of gross profit attributable to UpRight's products held
in Horizon's rental fleet and sales inventory as of June 27, 1999 compared to
June 28, 1998.

        Operating expenses, consisting of selling, general and administrative
expenses, product liability and research and development expenses were $40.7
million for fiscal year 1999 compared to $32.7 million for the same period last
year. SG & A expenses increased by $7.7 million to $31.6 million in fiscal year
1999 compared to fiscal year 1998, due to higher corporate expenses of $3.5
million at the Company, including a $1.0 million severance payment to the former
President of the Company, and higher marketing and administrative expenses at
Horizon of $3.5 million due to the increase in size of the business. Product
liability expense was $0.4 million for fiscal year 1999 compared to $2.8 million
in fiscal year 1998. The decrease in product liability expense is primarily due
to the reduction in the accrued liability based on a low incident rate and cost
per case experienced in fiscal year 1999. Research and development expense for
fiscal year 1999 was $8.7 million compared to $6.0 million for fiscal year 1998.
The increase in Research and development expenses is due to developing new boom
lift products and telescopic material handlers.



Page 17
<PAGE>   20

        Interest expense, net of interest income, increased to $12.1 million for
fiscal year 1999 from $9.4 million for fiscal year 1998 due primarily to lower
cash balances and higher borrowings used to fund Horizon's rental additions and
UpRight's Madera facility construction.

        Income taxes in fiscal year 1999 were $0.2 million compared to $3.2
million in fiscal year 1998. The decrease in provision for income taxes is
primarily due to lower taxable income in fiscal year 1999.

        Net income for fiscal year 1999 was $0.2 million, representing a
decrease of $7.5 million from net income of $7.7 million for the previous fiscal
year, as a result of the factors described above.

FISCAL YEAR  ENDED JUNE 28, 1998 COMPARED TO FISCAL YEAR ENDED JUNE 29, 1997

        Revenue increased by 22.1% to $170.8 million in fiscal year 1998 from
$139.9 million in fiscal year 1997. The increase of $30.9 million was
attributable to increased revenue from sales of new equipment of $24.1 million
(including sales of UpRight equipment by Horizon) and increased rental and
service revenue for Horizon of $5.1 million. UpRight's sales of larger scissor
lifts and boom lifts were the primary reasons for the increase in new equipment
sales. The increase in Horizon's rental and service revenue was primarily
attributable to rental fleet additions and the inclusion of results from
businesses acquired subsequent to the third quarter in fiscal year 1997.

        Gross profit for fiscal year 1998 was $53.0 million, an increase of $7.4
million over gross profit of $45.6 million for fiscal year 1997. The increase in
gross profit is attributable to higher revenue; however, gross margins decreased
to 31.0% for fiscal year 1998 compared to 32.6% for the previous fiscal year,
due to new product introductions and higher elimination of gross profit
attributable to UpRight's products held in Horizon's rental fleet and sales
inventory as of June 28, 1998 compared to June 29, 1997.

        Operating expenses, consisting of selling, general and administrative
expenses, product liability and research and development expenses were $32.7
million for fiscal year 1998 compared to $25.5 million for the same period last
year. SG & A expenses increased by $5.8 million to $23.9 million in fiscal year
1998 compared to fiscal year 1997, due to an increase in domestic and
international selling and marketing expense associated with higher unit volumes,
as well as expenses incurred in connection with the introduction of new products
and establishing a sales office in South America and in Asia. Product liability
expense was $2.8 million for fiscal year 1998 compared to $3.1 million in fiscal
year 1997. Research and development expense for fiscal year 1998 was $6.0
million compared to $4.3 million for fiscal year 1997. The increase in Research
and development expenses reflected the Company's increased emphasis on
developing new and re-designed aerial work platform products.

        Interest expense, net of interest income, increased to $9.4 million for
fiscal year 1998 from $4.0 million for fiscal year 1997 due to the Company's
issuance of its Notes in June 1997.

        Income taxes in fiscal year 1998 were $3.2 million compared to $6.1
million in fiscal year 1997. The decrease in provision for income taxes is
primarily due to business tax credits realized in fiscal year 1998.

        Net income for fiscal year 1998 was $7.7 million, representing a
decrease of $2.3 million from net income of $10.0 million for the previous
fiscal year, as a result of the factors described above.

LIQUIDITY AND CAPITAL RESOURCES

        The Company's cash flow requirements are for working capital, capital
expenditures and debt service.

        The Company meets its liquidity needs through internally generated funds
and committed finance facilities available to its subsidiaries, UpRight and
Horizon, and cash balances.



Page 18
<PAGE>   21


        The Company's cash balance as of June 27, 1999 was $13.3 million. This
cash is used in part to finance the capital expenditure program at UpRight and
Horizon and, in addition, used for general corporate purposes. UpRight and
Horizon have revolving lines of credit from major financial institutions of
$20.0 million and $5.3 million, respectively. As of June 27, 1999, UpRight and
Horizon had utilized $6.5 million and $4.4 million of their respective revolving
lines of credit. On August 9, 1999, UpRight entered into a financing agreement
with a financial institution that will hold available to UpRight credit
facilities in the aggregate total amount of $40.0 million to renegotiate its
existing revolving line of credit of $20.0 million. Facility number one is a
revolving line of credit for working capital of up to $25.0 million, with a
step-down of available commitment amount and outstanding balances to $20.0
million on January 31, 2000. Facility number two is a revolving line of credit
for funding equipment purchases of up to $10.0 million due and payable at
maturity, which is June 30, 2000, with periodic principal reductions from
refinance by certain leasing companies. Facility number three is a revolving
line of credit for real estate construction and improvements of the boom
manufacturing plant of up to $5.0 million, due and payable at maturity, which is
June 30, 2000. On September 3, 1999, Horizon entered into a financing agreement
with a financial institution to increase its credit facilities from $5.3 million
to $46.3 million. The facility includes a $30.0 million term loan, payable in
equal principal payments plus accrued interest for 60 months. In addition, a $10
million facility was established for purchasing rental equipment during fiscal
2000. This facility is interest only and will convert to a five year term loan
in July 2000. Finally, Horizon's revolver was increased from $5.25 million to
$6.25 million.

        The Company's working capital was $54.7 million and $88.5 million at
June 27, 1999 and June 28, 1998, respectively. The decrease in working capital
is due to the reduction of cash balances of $50.3 million in fiscal year 1999.
The cash was used to finance Horizon's capital expenditure program, including
acquisitions made during fiscal year 1999. Inventories and accounts receivable
increased by $26.7 million during fiscal year 1999 due to the increased revenues
from new products, acquisitions made by Horizon, and extended terms provided by
UpRight to its international customers.

        The Company's outstanding debt was $150.6 million and $124.1 million at
June 27, 1999 and June 28, 1998, respectively. The increase in borrowings was
due to UpRight financing capital expenditures at its Selma and Madera facilities
of $27.4 million during fiscal year 1999. Cash and cash equivalents were $13.3
million and $63.7 million as of June 27, 1999 and June 28, 1998, respectively.

        Net cash used by operating activities was $9.9 million in fiscal year
1999 compared to net cash provided by operating activities of $5.0 million for
fiscal year 1998. The increase in net cash usage by operating activities of
$14.9 million is primarily related to lower net income of $7.5 million, an
increase in accounts receivable usage of $8.2 million, and an increase in
inventory usage of $3.0 million offset by higher depreciation and amortization
of $5.2 million.

        Cash used in fiscal year 1999 for the purchase of property, plant and
equipment totaled $65.1 million, including $14.3 million used in the three
months ended June 27, 1999. This capital expenditure was incurred to upgrade and
expand Horizon's rental fleet and UpRight's manufacturing facilities at Selma
and Madera, California.

        Net cash provided by financing activities was $19.9 million and $10.2
million in fiscal year 1999 and fiscal year 1998, respectively. The increase in
net cash provided by financing activities resulted primarily from UpRight
borrowing to fund the construction of its manufacturing facility at Madera,
California. The Company paid a dividend of $6.5 million to WRC Holdings, Inc. in
fiscal year 1999 and no dividend in fiscal year 1998.

        In addition to its cash on hand, the Company believes that internally
generated funds and amounts available to UpRight and Horizon under revolving
credit facilities are and will continue to be sufficient to satisfy its
operating cash requirements and planned capital expenditures. The Company may,
however, require additional capital through borrowings if the Company undertakes
acquisitions.

SEASONALITY

        The Company's revenue and operating results historically have fluctuated
from quarter to quarter, and the Company expects that they will continue to do
so in the future. These fluctuations have been caused by a number of factors,
including seasonal purchasing patterns of UpRight's customers and seasonal
rental patterns of Horizon's customers (principally due to the effect of weather
on construction activity). The operating results of any historical period are
not necessarily indicative of results for any future period.



Page 19
<PAGE>   22

YEAR 2000

        The Year 2000 ("Y2K") issue is the result of computer programs being
written using two digits (i.e. "98") rather than four (i.e. "1998") to define
the applicable year. These programs treat years as occurring between 1900 and
the end of 1999 and do not self-convert to reflect the upcoming change in the
century. In addition, February, 2000 is a leap year at the end of a century, an
event that occurs only once every 400 years. If not corrected, computer
applications could fail or create erroneous results in date sensitive
applications.

        Each of the Company, UpRight and Horizon has undertaken a program to
understand the nature and extent of the work required to make its respective
systems Y2K compliant. These programs encompass information systems, facilities
systems, vehicles, UpRight and Horizon's products and the readiness of UpRight
and Horizon's suppliers and customers. These programs include the following
phases: identification and assessment, compliance plan development, remediation
and testing, and contingency planning.

        Each of the Company, UpRight and Horizon have essentially completed
their Y2K programs and believe their respective systems and products to be
compliant. The Company (including UpRight and Horizon) does not believe there to
be any Y2K issue with the products it sells, rents or services. Each of the
Company, UpRight and Horizon has written assurances from its respective
suppliers to confirm this.

        The total cost of the Y2K project to date has not been material. The
Company believes that the most reasonably likely worst case Y2K scenario would
result from suppliers or other third parties failing to achieve Y2K compliance.
Depending upon the number of third parties, their identity and the nature of the
non-compliance, the Y2K issue could have a material adverse effect on the
Company's financial position or results of operations. The Y2K project has
significantly reduced the Company's level of uncertainty about the compliance
and readiness of third parties. The Company is completing a contingency plan
should any problems occur in critical areas.



Page 20
<PAGE>   23

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not applicable.



Page 21
<PAGE>   24

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

               W.R. CARPENTER NORTH AMERICA, INC. AND SUBSIDIARIES

                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                                                                        PAGE
                                                                       NUMBER
                                                                       ------
<S>                                                                    <C>
Independent Auditors' Report ......................................      23
Consolidated Balance Sheets -- June 27, 1999 and June 28, 1998 ....      24
Consolidated Statements of Operations -- Years Ended June 27, 1999,
June 28, 1998 and June 29, 1997 ...................................      25
Consolidated Statements of Stockholder's Equity -- Years Ended
  June 27, 1999, June 28, 1998 and June 29, 1997 ..................      26
Consolidated Statements of Cash Flows -- Years Ended June 27, 1999,
  June 28, 1998 and June 29, 1997 .................................      27
Notes to Consolidated Financial Statements ........................      28
Consolidated Financial Statements Schedule:

    Schedule II-Valuation and Qualifying Accounts .................      41
</TABLE>



Schedules other than those listed above are omitted because they are not
required or are not applicable, or the required information is shown in the
respective consolidated financial statements or notes thereto.



Page 22
<PAGE>   25

INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholder of
W.R. Carpenter North America, Inc.
Madera, California

We have audited the consolidated balance sheets of W.R. Carpenter North America,
Inc. and subsidiaries as of June 27, 1999 and June 28, 1998 and the related
consolidated statements of operations, stockholder's equity and cash flows for
each of the three years in the period ended June 27, 1999 and the related
financial statement schedule listed in the accompanying index at item 8. These
consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.

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

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of W.R. Carpenter North
America, Inc. and subsidiaries as of June 27, 1999 and June 28, 1998 and the
results of their operations and their cash flows for each of the three years in
the period ended June 27, 1999 in conformity with generally accepted accounting
principles.

PANNELL KERR FORSTER

Certified Public Accountants
A Professional Corporation

Los Angeles, California
August 22, 1999, except for note 21 for which the date is September 3, 1999



Page 23
<PAGE>   26

               W.R. CARPENTER NORTH AMERICA, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS
                         (IN THOUSANDS EXCEPT PAR VALUE)

<TABLE>
<CAPTION>
                                                                      JUNE 27,      JUNE 28,
                                                                        1999          1998
                                                                      --------      --------
                                     ASSETS
<S>                                                                   <C>           <C>
Current assets

  Cash and cash equivalents ....................................      $ 13,328      $ 63,669
  Accounts receivable (net of allowance for doubtful accounts
      of $618 and $410, respectively) ..........................        41,817        28,625
  Inventories ..................................................        38,748        27,407
  Prepaid expenses and other ...................................         2,345         2,995
  Prepaid income taxes .........................................         1,300            --
  Deferred income taxes ........................................         1,448         1,791
                                                                      --------      --------
     Total current assets ......................................        98,986       124,487
Property, plant and equipment, net .............................       115,007        62,765
Other assets ...................................................        10,027         9,407
                                                                      --------      --------
          Total assets .........................................      $224,020      $196,659
                                                                      ========      ========
                      LIABILITIES AND STOCKHOLDER'S EQUITY

Current liabilities

  Accounts payable .............................................      $ 26,833      $ 18,028
  Accrued wages and employee benefits ..........................         3,644         3,911
  Accrued interest .............................................           750           674
  Other accrued expenses .......................................         4,792         7,193
  Current portion of long-term debt ............................         8,258         6,191
                                                                      --------      --------
     Total current liabilities .................................        44,277        35,997
Senior Subordinated Notes Payable ..............................       104,619       104,571
Long-term debt, net of current portion .........................        37,729        13,365
Other long-term liabilities ....................................         4,304         5,108
Deferred income taxes ..........................................         4,698         2,928
                                                                      --------      --------
     Total liabilities .........................................       195,627       161,969
                                                                      --------      --------
Commitments and contingencies
Stockholder's equity
Common stock, Class A - $1 par value; 70 shares authorized,
     55 shares issued and outstanding ..........................            55            55
Common stock, Class B - $1 par value; 35 shares authorized,
     5 shares issued and outstanding ...........................             5             5
Preferred stock - $1 par value; 25 shares authorized, issued
     and outstanding ...........................................            25            25
Additional paid-in capital .....................................         8,767         8,767
Cumulative currency translation adjustment (CTA) ...............         2,084         2,084
Retained earnings (On July 3, 1994 a deficit of $31,395
     was eliminated due to a  subsidiary's quasi-reorganization)        17,457        23,754
                                                                      --------      --------
          Total stockholder's equity............................        28,393        34,690
                                                                      --------      --------
          Total liabilities and stockholder's equity ...........      $224,020      $196,659
                                                                      ========      ========
</TABLE>

               See notes to the consolidated financial statements.



Page 24
<PAGE>   27

               W.R. CARPENTER NORTH AMERICA, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS

                 (IN THOUSANDS EXCEPT SHARE AND PER-SHARE DATA)

<TABLE>
<CAPTION>
                                                            YEARS ENDED
                                              -----------------------------------------
                                               JUNE 27,       JUNE 28,        JUNE 29,
                                                1999            1998            1997
                                              ---------       ---------       ---------
<S>                                           <C>             <C>             <C>
Revenues
  Equipment sales
     New ...............................      $ 149,955       $ 137,998       $ 113,867
     Used ..............................          7,109           4,207           2,589
  Rental and services ..................         43,133          28,592          23,448
                                              ---------       ---------       ---------
          Total revenues ...............        200,197         170,797         139,904
                                              ---------       ---------       ---------
Cost of Revenues
  Equipment sales

     New ...............................        109,121          94,943          78,712
     Used ..............................          5,000           2,400           1,257
  Rental and services ..................         32,693          20,501          14,346
                                              ---------       ---------       ---------
     Total cost of revenues ............        146,814         117,844          94,315
                                              ---------       ---------       ---------
Gross profit
  Equipment sales

     New ...............................         40,834          43,055          35,155
     Used ..............................          2,109           1,807           1,332
  Rental and services ..................         10,440           8,091           9,102
                                              ---------       ---------       ---------
     Total gross profit ................         53,383          52,953          45,589
                                              ---------       ---------       ---------
Operating expenses

  Selling, general and administrative ..         31,215          23,902          18,117
  Product liability ....................            351           2,807           3,115
  Research and development .............          8,691           5,952           4,281
  Impairment of long-lived assets ......            408              --              --
                                              ---------       ---------       ---------
     Total operating expenses ..........         40,665          32,661          25,513
                                              ---------       ---------       ---------
Income from operations .................         12,718          20,292          20,076
Other income (expense)

  Interest expense, net ................        (12,110)         (9,421)         (3,983)
  Other expense ........................           (194)             (6)             --
                                              ---------       ---------       ---------
Income before income taxes .............            414          10,865          16,093
Provision for income taxes .............            211           3,206           6,131
                                              ---------       ---------       ---------
Net income .............................      $     203       $   7,659       $   9,962
                                              =========       =========       =========
Earnings per common share ..............      $       3       $     128       $     166
                                              =========       =========       =========
Weighted average number of common shares         60,000          60,000          60,000
                                              =========       =========       =========
</TABLE>

               See notes to the consolidated financial statements.



Page 25
<PAGE>   28

               W.R. CARPENTER NORTH AMERICA, INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY
           YEARS ENDED JUNE 27, 1999, JUNE 28, 1998 AND JUNE 29, 1997
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                                       ACCUMULATED
                                                                                          OTHER
                             COMMON STOCK           PREFERRED STOCK       ADDITIONAL  COMPREHENSIVE                TOTAL
                          --------------------    --------------------     PAID-IN        INCOME     RETAINED   STOCKHOLDER'S
                           SHARES     AMOUNTS      SHARES      AMOUNTS     CAPITAL        (CTA)      EARNINGS      EQUITY
                          --------    --------    --------    --------    --------      --------     --------     --------
<S>                       <C>         <C>         <C>         <C>         <C>           <C>          <C>        <C>
Balance, June 30, 1996          60    $     60          25    $     25    $  8,767      $  2,084     $  6,133     $ 17,069
  Net income .........          --          --          --          --          --            --        9,962        9,962
                          --------    --------    --------    --------    --------      --------     --------     --------
Balance, June 29, 1997          60          60          25          25       8,767         2,084       16,095       27,031
  Net Income .........          --          --          --          --          --            --        7,659        7,659
                          --------    --------    --------    --------    --------      --------     --------     --------
Balance, June 28, 1998          60          60          25          25       8,767         2,084       23,754       34,690
 Net Income ..........          --          --          --          --          --            --          203          203
 Dividends paid ......          --          --          --          --          --            --       (6,500)      (6,500)
                          --------    --------    --------    --------    --------      --------     --------     --------
Balance, June 27, 1999          60    $     60          25    $     25    $  8,767      $  2,084     $ 17,457     $ 28,393
                          ========    ========    ========    ========    ========      ========     ========     ========
</TABLE>



               See notes to the consolidated financial statements.



Page 26
<PAGE>   29

               W.R. CARPENTER NORTH AMERICA, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                                  YEARS ENDED
                                                                      -------------------------------------
                                                                       JUNE 27,      JUNE 28,     JUNE 29,
                                                                         1999         1998          1997
                                                                      ---------     ---------     ---------
<S>                                                                   <C>           <C>           <C>
Cash flows from operating activities
  Net income .....................................................    $     203     $   7,659     $   9,962
                                                                      ---------     ---------     ---------
Adjustments to reconcile net income to net cash provided (used) by
   operating activities
      Depreciation and amortization ..............................       13,262         8,053         5,804
     Gain on disposition of property, plant and
      equipment ..................................................       (2,163)       (1,997)       (1,380)
     Impairment of long-lived assets .............................          408            --            --
     Deferred income taxes, net ..................................        2,113            93           943
Changes in operating assets and liabilities
       Accounts receivable .......................................      (13,192)       (5,034)       (7,771)
       Inventories ...............................................      (13,532)      (10,574)       (1,001)
       Prepaid expenses and other ................................         (650)       (1,222)          (20)
       Accounts payable ..........................................        8,805         6,443          (339)
       Accrued expenses ..........................................       (2,592)        2,405         1,880
       Other, net ................................................       (2,524)         (808)       (2,626)
                                                                      ---------     ---------     ---------
            Total adjustments ....................................      (10,065)       (2,641)       (4,510)
                                                                      ---------     ---------     ---------
          Net cash provided (used) by operating
            activities ...........................................       (9,862)        5,018         5,452
                                                                      ---------     ---------     ---------
Cash flows from investing activities
     Additions to property, plant and equipment ..................      (65,065)      (27,424)      (12,356)
     Proceeds from disposition of assets .........................        6,917         4,072         2,453
     Acquisitions, net of cash acquired ..........................       (2,262)       (5,537)       (2,174)
                                                                      ---------     ---------     ---------
          Net cash used by investing activities ..................      (60,410)      (28,889)      (12,077)
                                                                      ---------     ---------     ---------
Cash flows from financing activities
     Proceeds from long-term debt ................................       81,725        15,878        29,784
     Repayment of long-term debt .................................      (55,294)       (5,683)      (48,034)
     Proceeds from senior subordinated notes .....................           --            --       104,519
     Repayment of note payable -- related party ..................           --            --       (13,463)
     Dividends paid ..............................................       (6,500)           --            --
                                                                      ---------     ---------     ---------
          Net cash provided by financing activities ..............       19,931        10,195        72,806
                                                                      ---------     ---------     ---------
Net increase (decrease) in cash and cash equivalents .............      (50,341)      (13,676)       66,181
Cash and cash equivalents at beginning of year ...................       63,669        77,345        11,164
                                                                      ---------     ---------     ---------
Cash and cash equivalents at end of year .........................    $  13,328     $  63,669     $  77,345
                                                                      =========     =========     =========
Supplemental disclosures of cash flow information:

  Cash used for interest payments ................................    $  13,502     $  12,118     $   4,777
                                                                      =========     =========     =========
  Cash used for income tax payments ..............................    $   2,320     $   2,226     $   3,599
                                                                      =========     =========     =========
</TABLE>

See note 18 for additional supplemental disclosures of cash flow information.

               See notes to the consolidated financial statements.



Page 27
<PAGE>   30

               W.R. CARPENTER NORTH AMERICA, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 JUNE 27, 1999, JUNE 28, 1998 AND JUNE 29, 1997
                      (IN THOUSANDS, EXCEPT PER-SHARE DATA)

NOTE 1 -- THE COMPANY

W.R. Carpenter North America, Inc. (the Company), incorporated in 1975 under the
laws of Delaware, serves as the holding company for its operating subsidiaries
UpRight, Inc. (UpRight) and Horizon High Reach, Inc. (Horizon).

UpRight was incorporated in California in 1947, and its stock was publicly
traded from 1980 until 1988 when it was acquired by an affiliate of the Company.
In 1988, through a corporate reorganization, UpRight became a wholly owned
subsidiary of the Company. Prior to 1989, Horizon was an independent company in
the business of renting and selling aerial work platform equipment in Southern
California. In 1989, UpRight acquired the assets of Horizon which were merged
into the retail division of UpRight's North American Operations. In 1994,
Horizon became a separate, wholly owned subsidiary of the Company. Although
Horizon is a distributor for UpRight products, the two companies have separate
management teams and operate on an independent basis.

UpRight is a leading manufacturer of aerial work platforms. Sales are made
principally to independent distributors who rent and sell UpRight's products to
a broad customer base, which includes end users in the industrial, commercial,
institutional and construction markets.

The aerial work platform industry is highly competitive. In selling its aerial
work platform products, UpRight experiences two principal types of competition:
from other manufacturers and from alternative equipment. UpRight competes in the
aerial work platform industry primarily with several other manufacturers.
Certain of UpRight's competitors are part of, or are affiliated with, companies
that are larger and have greater financial resources than UpRight.

The principal customers for UpRight's new equipment are independent equipment
distributors that primarily rent UpRight's products and provide service support
to equipment users. In recent years, there has been significant consolidation in
ownership among rental companies, including certain UpRight customers, resulting
in a more limited number of major customers comprising a substantial portion of
total revenue.

Horizon is a leading industrial equipment rental, sales and service equipment
company serving a diverse range of customers from 16 domestic locations.
Horizon's rental fleet consists primarily of aerial work platforms, portable
lift products, self-propelled scissor lifts and boom lift products, telescopic
material handlers and forklifts. Horizon rents equipment on a daily, weekly and
monthly basis and, occasionally, for longer periods. Horizon is also a
distributor of new equipment for several leading manufacturers and sells used
equipment from its rental fleet, in addition to complementary parts, supplies
and accessories.

Horizon is a distributor for UpRight products in all of Horizon's designated
market areas. The equipment in Horizon's existing rental fleet consists of
scaffold, UpRight lifts, scissors, boom lifts, and other lift products. Horizon
also represents various product lines for other manufacturers. Horizon's
corporate headquarters are located in Fresno, California.

Horizon's competitors include national and multi-regional companies, regional
competitors that operate in a small number of states, small independent
businesses with one or a few rental locations, and equipment vendors and dealers
which both sell and rent equipment directly to end users.

RISK FACTORS

        Economic -- The equipment rental industry is highly dependent upon the
        level of business activity in the commercial and industrial segments of
        the economy. As a result, the equipment rental industry is particularly
        sensitive to national, regional and local slowdowns in the commercial
        construction industry, which is highly cyclical and subject to downturns
        during economic slowdowns.



Page 28
<PAGE>   31

               W.R. CARPENTER NORTH AMERICA, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 JUNE 27, 1999, JUNE 28, 1998 AND JUNE 29, 1997
                      (IN THOUSANDS, EXCEPT PER-SHARE DATA)

        Competition -- The equipment rental, sales and service industry is
        highly competitive. The Company's competitors include national,
        multiregional companies and dealers that both sell and rent equipment
        directly to end users. To the extent that existing or future competitors
        seek to gain or retain market share by reducing rental rates or sales
        prices, the Company may be required to lower its prices, thereby
        adversely affecting the operating results of the Company.

        Need for Continual Capital Expenditures -- A principal component of the
        Company's strategy is to provide its rental customers with relatively
        new, high-quality equipment. The Company continues to expand its
        manufactured product lines and manufacturing capacity. The annual
        replacement of equipment and plans to expand the Company's business will
        require significant capital expenditures. There can be no assurance that
        in the future the Company will have capital sufficient to fund such
        planned or additional expenditures.

        Insurance -- The Company maintains insurance coverage for its operations
        and activities. There can be no assurance that existing or future claims
        will not exceed the level of such insurance or that such insurance will
        continue to be available at economically feasible terms.

NOTE 2 -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and
its wholly-owned subsidiaries, UpRight and Horizon. In consolidation, all
significant inter-company balances and transactions are eliminated.

Cash flows

For purposes of the statement of cash flows, the Company considers all cash
investments and related deposits purchased with a maturity of three months or
less to be cash equivalents.

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, disclosure of contingent
assets and liabilities at the dates of the financial statements, and the
reported amounts of revenue and expenses during the reporting periods. Actual
future results could differ from those estimates.

Revenue recognition

The Company's subsidiaries recognize revenue from equipment sales upon shipment.
Revenue from rentals is recognized ratably over the term of the rental contract.

Inventories

Inventories are valued at the lower of cost, using the first-in, first-out
(FIFO) method, or market.



Page 29
<PAGE>   32

               W.R. CARPENTER NORTH AMERICA, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 JUNE 27, 1999, JUNE 28, 1998 AND JUNE 29, 1997
                      (IN THOUSANDS, EXCEPT PER-SHARE DATA)

Property, plant and equipment

Property, plant and equipment are stated at cost. When units of property are
disposed of, the cost and accumulated depreciation are removed from the
accounts, and any resulting gain or loss is recognized in operations for the
period. Sales of rental equipment are reflected as used equipment sales in the
accompanying consolidated financial statements. Cost of used equipment sales
consists of the net book value of the equipment sold plus costs directly
associated with the sale. (See Note 6 regarding assets acquired through
acquisition.)

Depreciation is computed using the straight-line method over the following
estimated useful lives of the assets, as follows:

<TABLE>
<S>                                                           <C>
      Building and improvements...........................    5 - 39 years
      Machinery and equipment.............................    3 - 10 years
      Rental equipment....................................    3 - 10 years
</TABLE>

Expenditures for ordinary repairs and maintenance are charged to operations;
betterments are capitalized.

Other assets

Organization costs are amortized using the straight-line method over estimated
life of 6 years. Noncompete covenants are amortized using the straight-line
method over the terms of the respective agreements, two to five years.

Impairment of long-lived assets

The Company reviews long-lived assets and identifiable intangibles whenever
events or circumstances indicate that the carrying amount of such assets may not
be fully recoverable. The Company evaluates the recoverability of long-lived
assets by measuring the carrying amounts of the assets against the estimated
undiscounted cash flows associated with these assets. At the time such
evaluations indicate that the future undiscounted cash flows of certain
long-lived assets are not sufficient to recover the assets' carrying value, the
assets are adjusted to their fair values (based upon discounted cash flows).

During fiscal 1997, the Company acquired certain assets and liabilities of a
forklift sales, rental and repair company in California, Forklift Sales, Inc.
This acquisition was accounted for under the purchase method, with the excess of
cost over management's estimated fair value of the net assets acquired of $687
allocated to goodwill.

During 1999, management reviewed the estimated future cash flows related to this
operation and deemed them to be insufficient to fully recover the carrying value
of the assets acquired. Accordingly, management has recognized a $408 impairment
expense to reduce goodwill to its estimated fair value. In addition, the Company
fully accrued for the remaining portion of a consulting agreement with the
former president of the acquired company. The impact of accruing this liability
was $60.

Goodwill

Goodwill represents the excess purchase price paid over the fair market value of
the assets of companies acquired by Horizon. Goodwill is being amortized over 10
years on a straight-line basis.

Debt issue costs

Debt issue costs are amortized on a straight-line basis over the term of the
related debt.

Foreign currency translation

Assets and liabilities denominated in foreign currencies are translated to U.S.
dollars using prevailing rates of exchange. Gains and losses on foreign currency
translation from operations for which the functional currency is other than the
U.S. dollar, together



Page 30
<PAGE>   33

               W.R. CARPENTER NORTH AMERICA, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 JUNE 27, 1999, JUNE 28, 1998 AND JUNE 29, 1997
                      (IN THOUSANDS, EXCEPT PER-SHARE DATA)

with related hedges tax effects, are reported in stockholder's equity. For
foreign operations for which the U.S. dollar is the functional currency, gains
and losses resulting from converting foreign currency assets and liabilities to
U.S. dollars, including the related hedges, are included in trading revenue.

Income taxes

The Company files a consolidated tax return with its subsidiaries. Current and
deferred taxes are recorded for differences in the timing of the recognition of
revenues and expenses for financial reporting and income tax purposes. Deferred
taxes result primarily from the use of accelerated depreciation methods for
income tax purposes, timing in the deduction of state income taxes,
capitalization of certain costs in inventories for tax purposes, and differences
in the recognition of certain accruals for tax and financial statement purposes.

Earnings  per share

Earnings per share is computed using the weighted average number of shares
outstanding of common stock. In February 1997, the Financial Accounting
Standards Board issued SFAS No. 128, "Earnings per Share." This statement
establishes simplified standards for computing and presenting earnings per share
(EPS). It requires dual presentation of basic and diluted EPS on the face of the
income statement for entities with complex capital structures and disclosures of
the calculation of each EPS amount.

Fiscal year

The fiscal year of the Company ends on the Sunday nearest to June 30.

Reclassifications

Certain reclassifications have been made to the 1998 financial statements to
conform with 1999 classifications. These reclassifications have no effect on
equity or the net income as previously reported.

NOTE 3 -- INVENTORIES

Inventories consist of the following:

<TABLE>
<CAPTION>
                               1999        1998
                             -------      -------
<S>                          <C>          <C>
Finished goods .........     $12,998      $ 9,444
Work-in-progress .......       3,200        1,312
Raw materials ..........      22,550       16,651
                             -------      -------
                             $38,748      $27,407
                             =======      =======
</TABLE>

A reserve of $551 and $550 for fiscal years 1999 and 1998, respectively, has
been deducted from inventories for potential obsolescence.

NOTE 4 -- PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consists of the following:

<TABLE>
<CAPTION>
                                            1999           1998
                                         ---------       ---------
<S>                                      <C>             <C>
Land ................................    $   1,647       $     391
Building and improvements ...........       18,565           7,248
Machinery and equipment .............       53,475          35,463
Rental equipment ....................       77,132          48,053
                                         ---------       ---------
                                           150,819          91,155
Less accumulated depreciation........      (35,812)        (28,390)
                                         ---------       ---------
                                         $ 115,007       $  62,765
                                         =========       =========
</TABLE>



Page 31
<PAGE>   34

               W.R. CARPENTER NORTH AMERICA, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 JUNE 27, 1999, JUNE 28, 1998 AND JUNE 29, 1997
                      (IN THOUSANDS, EXCEPT PER-SHARE DATA)

NOTE 5 -- OTHER ASSETS

<TABLE>
<CAPTION>
Other assets consist of the following:                                        1999           1998
                                                                            --------       --------
<S>                                                                         <C>            <C>
Debt issue costs, net ................................................      $  3,848       $  4,334
Goodwill .............................................................         6,863          5,029
Organization costs* ..................................................           457            457
Noncompete covenants .................................................            --             80
Deposits .............................................................           130             82
Long-term receivables ................................................           108             98
Note receivable, due from officer ....................................           439            452
                                                                            --------       --------

                                                                              11,845         10,532
Less accumulated amortization ........................................        (1,284)          (592)
                                                                            --------       --------
                                                                              10,561          9,940
Less: Current portion (included in "Prepaid and other" current assets)          (534)          (533)
                                                                            --------       --------
Other assets, net ....................................................      $ 10,027       $  9,407
                                                                            ========       ========
</TABLE>

Amortization expense related to goodwill and organization costs during 1999 and
1998 was $692 and $323, respectively.

*Organization costs were incurred in connection with the split of Horizon from
UpRight as described in note 1. Unamortized organizational costs as of June 27,
1999 were $59.

NOTE 6 -- ACQUISITIONS

During 1999, the Company acquired the stock of an aerial work platform sales,
rental and repair company in Colorado (Contractor's Equipment Company of
Colorado, Inc.) for $2,262 plus $3,300 of assumed debt.

During fiscal year 1998, Horizon acquired the stock of a general rental company
in Texas and the stock of an aerial access sales, rental and repair company in
California for $1,384 and $4,153, respectively.

The acquisition of these assets was financed as follows (in thousands):

<TABLE>
<CAPTION>
                                                                     1999        1998
                                                                    ------      ------
<S>                                                                   <C>         <C>
           Cash payments and/or expenses, net of cash acquired      $2,262      $5,537
                                                                    ======      ======
</TABLE>

All acquisitions have been accounted for under the purchase method. The excess
of cost over management's estimated fair value of the net assets acquired
related to these acquisitions totaled $1,856 and $3,899 in 1999 and 1998,
respectively, and has been allocated to goodwill.

Results of the Contractor's Equipment Company of Colorado, Inc. acquisition are
included in the consolidated financial statements beginning March 28, 1999.

Results of the Texas acquisition are included in the consolidated financial
statements beginning January 1, 1998. Results of the California acquisition in
fiscal year 1998 are included in the consolidated financial statements beginning
April 1, 1998.

Unaudited proforma consolidated results of operations for the year ended June
27, 1999, were not material to the consolidated financial statements.



Page 32
<PAGE>   35

               W.R. CARPENTER NORTH AMERICA, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 JUNE 27, 1999, JUNE 28, 1998 AND JUNE 29, 1997
                      (IN THOUSANDS, EXCEPT PER-SHARE DATA)

NOTE 7 -- LEASE OBLIGATIONS

The Company's subsidiaries lease certain office and operating facilities and
certain machinery and equipment under operating leases. The Company's
subsidiaries also have capital lease obligations for other equipment. The
following table sets forth future minimum principal payments under capital lease
arrangements and minimum payments under operating lease arrangements:

<TABLE>
<CAPTION>
                                                   CAPITAL     OPERATING
                                                    LEASES       LEASES
                                                    ------       ------
<S>                                                 <C>          <C>
2000 .........................................      $   64       $1,906
2001 .........................................          61        1,127
2002 .........................................          --          958
2003 .........................................          --          694
2004 .........................................          --          534
Thereafter ...................................          --          157
                                                    ------       ------
Total future minimum lease payments ..........         125        5,376
                                                    ======       ======
Less amount representing interest ............          (7)          --
                                                    ------       ------
Present value of future minimum lease payments      $  118       $5,376
                                                    ======       ======
</TABLE>

Rent expense under operating leases was $1,511, $744 and $1,021 in fiscal years
1994, 1995 and 1996, respectively. Rent expense under operating leases was
$2,896, $3,064 and $1,324 in fiscal years 1999, 1998 and 1997, respectively.

NOTE 8 -- LONG-TERM DEBT AND CREDIT FACILITIES

Long-term debt and credit facilities consists of the following:

<TABLE>
<CAPTION>
                                                                                 1999         1998
                                                                                -------      -------
<S>                                                                             <C>          <C>
Notes payable obligation and credit facilities secured with accounts
receivable, inventory and machinery and equipment, due in monthly
installments of various amounts with imputed interest at various rates per
annum (ranging from 7.7% to 10.0%) due at various dates through May 2014 .      $39,851      $13,167

Variable  interest bonds (ranging from 7% to 11%),  secured by deed of
trust and  equipment due in monthly  installments of varying  amounts
through September 2014 ...................................................        6,136        6,389
                                                                                -------      -------
                                                                                 45,987       19,556

Less current portion .....................................................        8,258        6,191
                                                                                -------      -------
                                                                                $37,729      $13,365
                                                                                =======      =======
</TABLE>


On October 27, 1994, the Company's UpRight subsidiary finalized a bonds payable
agreement with the Community Redevelopment Agency (Agency) of the City of Selma,
California, for purchases of buildings, equipment and tooling. For the fiscal
years ended June 27, 1999 and June 28, 1998, the Company made principal payments
of $253 and $215, respectively, on the bonds. The total value of bond funds was
$7,870, of which $750 is to remain undisbursed as bond reserves remaining with
the Agency and unavailable for UpRight's use through the entire term of the bond
agreement. As of June 27, 1999 and June 28, 1998, $750 was undisbursed and
remained as bond reserves with the Agency. As of June 27, 1999 and June 28,
1998, the bonds payable had outstanding balances of $6,136 and $6,389,
respectively, included on the long-term debt and credit facilities schedule
above as Variable interest bonds.



Page 33
<PAGE>   36

               W.R. CARPENTER NORTH AMERICA, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 JUNE 27, 1999, JUNE 28, 1998 AND JUNE 29, 1997
                      (IN THOUSANDS, EXCEPT PER-SHARE DATA)

The following is a five year maturity schedule for long-term debt (excluding
capital leases -- see Note 7 and senior subordinated notes -- see Note 9).

<TABLE>
<CAPTION>
                                                          Notes
                                             Bonds       Payable
                                            -------      -------
<S>                                         <C>          <C>
2000                                        $ 1,035      $ 7,898
2001                                          1,026       16,995
2002                                          1,014        4,253
2003                                          1,000        3,419
2004                                            988        2,044
Thereafter (2005 to 2014)                     8,727        5,124
                                            -------      -------
                                             13,790       39,733
Less amount representing bond interest        6,904           --
                                            -------      -------
Gross present value                           6,886       39,733
Bond reserve remaining with Agency              750           --
                                            -------      -------
Net present value                           $ 6,136      $39,733
                                            =======      =======
</TABLE>

On October 27, 1994, UpRight also entered into an agreement with the City of
Selma (City) to develop and improve at the Company's expense, certain of the
City's real property infrastructure. The improvements project was financed by
the issuance of Limited Obligation Improvement Bonds for Assessment District No.
1994-1 (District). The total project cost, including aggregate bond fees of
$504, was not to exceed $1,400. As of June 30, 1996, the Company had received in
the form of bond financing a total of $1,400. The improvements, upon completion,
were acquired from UpRight by the City. UpRight is obligated for future property
tax assessments to the District in amounts sufficient to repay the bonds. The
bonds call for bi-annual payments of varying amounts at an interest rate of 7.5
percent through December 2014. Due to the structure of the agreement with the
City, the Company is issued bi-annual property tax bills as the bond payments
are due. The consequence of this treatment is that the Company's financial
statements do not reflect a bond payable balance at the year end.

On April 23, 1998, UpRight entered into an equipment financing agreement with a
financial institution which allows it to borrow funds for the purchase of
equipment, up to $20 million. Loan balances outstanding are payable in monthly
installments, at variable interest rates based on the Daily Treasury Index for
the day on which funds are drawn. As of June 27, 1999, drawn funds totaled
$6,523, and unused available funds totaled $13,477.

Horizon has a revolving line of credit with a bank allowing Horizon to borrow up
to $5,275 not to exceed 80 percent of eligible receivables plus 25 percent of
the Company's inventory. Interest accrues at Horizon's option at either the
bank's prime lending rate (7.5 percent at June 27, 1999), LIBOR plus 1.85
percent, or .25 percent below the bank's prime lending rate. As of June 27,
1999, and June 28, 1998, the balance outstanding under the Revolving Credit Line
was $4,354 and $1,466, respectively. The Revolving Credit Line is secured by the
assets of Horizon. The Revolving Credit Agreement contains various restrictive
covenants, including minimum tangible net worth, minimum current ratio, maximum
debt to tangible net worth, and limits on annual capital expenditures and
operating lease expenses. Horizon has obtained waivers for the capital
expenditure and current ratio covenants. See note 21.

NOTE 9 -- SENIOR SUBORDINATED NOTES

 On June 4, 1997, the Company filed a private placement offering of $105,000,
10.625 percent senior subordinated notes due in 2007 (the Notes). The Notes are
guaranteed by the subsidiaries and are subordinated to all senior indebtedness
of the subsidiaries. The notes are reflected in accompanying balance sheets net
of unamortized discount of $381 and $429, at June 27, 1999, and June 28, 1998,
respectively. The effective interest rate is approximately 10.68%.



Page 34
<PAGE>   37

               W.R. CARPENTER NORTH AMERICA, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 JUNE 27, 1999, JUNE 28, 1998 AND JUNE 29, 1997
                      (IN THOUSANDS, EXCEPT PER-SHARE DATA)

The Company applied the net proceeds to repay the outstanding indebtedness and
various term loans of the subsidiaries, finance capital expansion programs, and
fund acquisitions in complementary businesses.

The terms of the Notes contain covenants that, among other things, restrict the
ability of the Company and its subsidiaries to (i) incur additional
indebtedness; (ii) pay dividends and make distributions; (iii) issue stock of
subsidiaries; (iv) make certain investments; (v) repurchase stock; (vi) create
liens; (vii) enter into transactions with affiliates; (viii) enter into sale and
leaseback transactions; (ix) create dividend or other payment restrictions
affecting subsidiaries; (x) merge or consolidate the Company or any of the
guarantors; and (xi) transfer or sell assets. These covenants are subject to a
number of exceptions as defined in the agreement.

NOTE 10 -- EMPLOYEE BENEFIT PLANS

Employees of UpRight participate in a Taxsaver's Investment Plan (UpRight 401(k)
Plan). The UpRight 401(k) Plan was originally adopted effective as of January 1,
1984 as an addition to the Company's Employee Stock Ownership Plan, originally
adopted in January 1, 1975. The Company's Employee Stock Ownership Plan was
terminated in 1987. UpRight makes fixed contributions to the UpRight 401(k) Plan
for each year in an amount equal to 4% of the compensation of all eligible
participants, plus up to an additional 2% matching of participants'
contributions. The UpRight 401(k) Plan also contains features that allow
employees to save money before paying Federal income tax on the amount saved.
The UpRight 401(k) Plan covers all employees who have at least one year of
service, and is administrated by a Plan Committee, whose members are appointed
by UpRight's Board of Directors. The UpRight 401(k) Plan is intended to conform
to the provisions of the Employee Retirement Income Security Act of 1974.
Contributions to the UpRight 401(k) Plan are fully vested as of December 31 in
the year in which such contributions were made. Contributions of approximately
$540, $611 and $540 were made by UpRight during 1999, 1998 and 1997,
respectively.

Employees of Horizon participate in the Horizon High Reach 401(k) Plan (Horizon
401(k) Plan). Participation in this defined contribution plan is available to
all full-time employees who have completed at least one year of service and
attained the age of 21. Horizon makes fixed contributions to the Horizon 401(k)
Plan for each year in an amount up to 4% of the compensation of all eligible
participants. In addition to the fixed annual contribution, Horizon is required
to make a matching contribution equal to the participant's elective contribution
up to 2% of the participant's compensation for the calendar year. Employee
contributions to the Horizon 401(k) Plan are fully vested. Employer
contributions are vested in 20% annual increments beginning after the second
year of participation in the Horizon 401(k) Plan, with full vesting occurring
after the sixth year of participation. Employees are fully vested upon their
65th birthday. Employees of Horizon who had been employed by UpRight or Horizon
for one year as of December 31, 1993 are fully vested in the Horizon 401(k)
Plan. During 1999, 1998 and 1997, Horizon expensed and accrued $457, $500, and
$350, respectively, under the Horizon 401(k) Plan.

NOTE 11 -- CAPITAL STOCK

The Company is authorized to issue 70 shares of its $1 par value Class A common
stock and 35 shares of its $1 par value Class B common stock. At June 27, 1999,
June 28, 1998, and June 29, 1997, 55 shares of Class A common stock and 5 shares
of Class B common stock were issued and outstanding. The Class A and Class B
shares have equal voting rights and, subject to the rights of the Company's
preferred shares, equal rights as to dividends and other distributions.

The Company is also authorized to issue 25 shares of its $1 par value preferred
stock, all of which was issued and outstanding at June 27, 1999, June 28, 1998,
and June 29, 1997. The preferred shares have no voting rights and have
preference over both classes of common stock as to dividends and other
distributions. The preferred shares are entitled to a $10 per share preferential
distribution before any distribution to common share holders in the event the
Company is dissolved or liquidated.



Page 35
<PAGE>   38

               W.R. CARPENTER NORTH AMERICA, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 JUNE 27, 1999, JUNE 28, 1998 AND JUNE 29, 1997
                      (IN THOUSANDS, EXCEPT PER-SHARE DATA)

NOTE 12 -- PROVISION FOR INCOME TAXES

The provision for income taxes consists of the following

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

  Federal      $  125      $2,632      $3,841
  State .          25         481       1,347
               ------      ------      ------
                  150       3,113       5,188
Deferred           61          93         943
               ------      ------      ------
               $  211      $3,206      $6,131
               ======      ======      ======
</TABLE>

The following is a summary of deferred tax assets and liabilities:

<TABLE>
<CAPTION>
                                                              1999                       1998                        1997
                                                     ---------------------       ---------------------       ---------------------
                                                     CURRENT     NON-CURRENT     CURRENT     NON-CURRENT     CURRENT     NON-CURRENT
                                                     -------       -------       -------       -------       -------       -------
<S>                                                  <C>         <C>             <C>         <C>             <C>         <C>
Deferred tax liabilities resulting from
  taxable temporary differences ...............      $   (96)      $(7,714)      $   (44)      $(5,120)      $  (321)      $(4,128)
Deferred tax assets  resulting from  deductible
temporary differences and tax credit carried
forward .......................................        1,544         3,016         1,835         2,192         1,412         1,993
                                                     -------       -------       -------       -------       -------       -------
                                                     $ 1,448       $(4,698)      $ 1,791       $(2,928)      $ 1,091       $(2,135)
                                                     =======       =======       =======       =======       =======       =======
</TABLE>

The provision for income taxes differs from the expense that would result from
applying Federal statutory rates to income before taxes because of the inclusion
of a provision for state income taxes. In addition, the provision includes
deferred income taxes resulting from adjustments in the amount of temporary
differences.

The Company concluded that a deferred tax asset valuation allowance as of June
27, 1999, June 28, 1998 and June 29, 1997, was not necessary.

NOTE 13 -- REORGANIZATION OF UPRIGHT, INC.

Effective July 3, 1994, UpRight's Board of Directors approved the elimination of
UpRight's accumulated deficit through an accounting reorganization of its equity
accounts (a quasi-reorganization). The quasi-reorganization, as reflected in the
accompanying consolidated financial statements, did not result in the
revaluation of any assets or liabilities of UpRight, because the fair values
were estimated to approximate book values.

The purpose of the quasi-reorganization was to provide users of UpRight's
financial statements with a "fresh start" presentation of UpRight's operations
subsequent to the spin off of its former retail operating division into Horizon,
a separate wholly-owned subsidiary of the Company (see Note 1).

The reorganization of Horizon into a separate subsidiary and UpRight's
quasi-reorganization were all significant aspects of the Company's efforts to
strategically refocus its capital resources and operational structure.




Page 36
<PAGE>   39

               W.R. CARPENTER NORTH AMERICA, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 JUNE 27, 1999, JUNE 28, 1998 AND JUNE 29, 1997
                      (IN THOUSANDS, EXCEPT PER-SHARE DATA)

NOTE 14 -- LEASES

During fiscal 1999 UpRight entered into rental share agreements with purchase
options with equipment rental companies. The agreements are being treated as
operating leases. UpRight maintains ownership of the equipment during the term
of the agreement, normally twelve months in duration. Up until the agreement
term expires, the retail equipment company has a purchase option to buy the
rental equipment, reduced by any rental payments made under the agreement. From
the date the equipment is shipped until the equipment rental term terminates,
UpRight is entitled to receive 40% of the rental revenue attributed to the
machines rented by the equipment rental companies. Up to 50% of the units can be
retained by UpRight for returned units. As of June 27, 1999, rental revenue was
not material in amount. Cost and accumulated depreciation of the rental
equipment at June 27, 1999, were $2,191 and $76, respectively. Minimum future
rentals for fiscal year 2000 are approximately $1,400.

NOTE 15 -- BUSINESS SEGMENTS

In June 1997, the Financial Accounting Standards Board (FASB) issued Statement
of Financial Accounting Standards (SFAS) No. 131, "Disclosures about Segments of
an Enterprise and Related Information." This statement requires public business
enterprises to report financial and descriptive information about reportable
segments. The statement also establishes standards for related disclosures about
products and services, geographic areas and major customers. In fiscal year 1999
the Company adopted SFAS No. 131. The Company operates in two business segments,
the manufacturing of aerial work platforms, boom lifts, portable lifts and
aluminum scaffolding segment, and in the industrial equipment rental, sales and
service company segment.

The manufacturing segment sells its product principally to independent
distributors who rent and sell the product to customers, which include end users
in the industrial, commercial, institutional and construction markets.

The industrial equipment rental segment rents, sells and services primarily
aerial work platforms, potable lifts and boom products, and forklifts from 16
domestic locations. New equipment is also distributed for several manufacturers.
Used equipment is sold from its rental fleet, as well as parts, supplies and
accessories.

Total revenues by segment reflect sales to unaffiliated customers. In computing
income from operations, none of the following have been added or deducted:
nonoperating interest expense, nonoperating interest income, and income taxes.
Capital expenditures excludes property, plant and equipment acquired through
acquisition.



Page 37
<PAGE>   40

               W.R. CARPENTER NORTH AMERICA, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 JUNE 27, 1999, JUNE 28, 1998 AND JUNE 29, 1997
                      (IN THOUSANDS, EXCEPT PER-SHARE DATA)

A summary of revenue, income from operations, identifiable assets, depreciation
and amortization, and capital expenditures for the years ended June 27, 1999,
June 28, 1998, and June 29, 1997, is as follows:

<TABLE>
<CAPTION>
                                                                                      Rental
                                                               Manufacturing       and Services     Corporate       Consolidated
                                                               -------------       ------------     ---------       ------------
<S>                                                            <C>                 <C>               <C>             <C>
Revenues*

     1999                                                        $123,087            $77,110             $--         $200,197
     1998                                                         116,072             54,725              --          170,797
     1997                                                          95,588             44,315              --          139,903
                                                                  -------             ------        --------          -------
Income from operations

     1999                                                         $10,690             $7,569        $(5,541)          $12,718
     1998                                                          15,513              6,100         (1,321)           20,292
     1997                                                          14,956              5,299           (179)           20,076
                                                                  -------             ------        --------          -------
Identifiable assets

     1999                                                        $115,862            $87,703         $20,455         $224,020
     1998                                                          81,485             58,608          56,566          196,659
     1997                                                          57,472             35,465          74,888          167,825
                                                                  -------             ------        --------          -------
Depreciation and amortization

     1999                                                          $4,157             $9,513             $--          $13,670
     1998                                                           2,678              5,375              --            8,053
     1997                                                           1,918              3,886              --            5,804
                                                                  -------             ------        --------          -------
Capital expenditures

     1999                                                         $27,425            $33,965          $3,675          $65,065
     1998                                                          10,456             16,968              --           27,424
     1997                                                           3,671              8,685              --           12,356
                                                                  -------             ------        --------          -------
Number of operating locations at year end (unaudited)

     1999                                                               2                 16              --               18
     1998                                                               1                 15              --               16
     1997                                                               1                 14              --               15
                                                                  -------             ------        --------          -------
</TABLE>

* Includes revenue from external customers for all groups of products and
  services in each segment reported. Products and services sold by each segment
  are similar in nature; also, it is impracticable to disclose revenues by
  product. During the fiscal years ended 1999, 1998 and 1997, one customer of
  the manufacturing segment accounted for sales of $31,178, $20,667 and $20,819,
  respectively.

Revenue from customer geographical segments were as follows:

<TABLE>
<CAPTION>
                                             1999                          1998                          1997
                                    -----------------------       -----------------------       -----------------------
<S>                                 <C>            <C>            <C>            <C>            <C>            <C>
U.S., Canada and Latin America      $132,023             66%      $115,161             67%      $ 96,774             69%
Europe .......................        64,338             32         48,339             28         35,295             25
Pacific Rim ..................         3,836              2          7,297              5          7,835              6
                                    --------       --------       --------       --------       --------       --------
                                    $200,197            100%      $170,797            100%      $139,904            100%
                                    ========       ========       ========       ========       ========       ========
</TABLE>

The majority of the Company's operating long lived assets are located in the
United States.

NOTE 16 -- CONTINGENCIES

The Company and its subsidiaries have various product liability claims and suits
pending. The Company's policy is to defend each suit vigorously, regardless of
the amount sought in damages. Although the outcome of such litigation cannot be
predicted with certainty, it is the opinion of management, based on the advice
of legal counsel and other considerations, that (except as described below) all
claims, legal actions, complaints and proceedings which have been filed or are
pending against the Company and its subsidiaries, as well as possible future
claims are adequately covered by reserves or insurance, and are not expected to
have a material adverse effect on the Company's consolidated financial position.

Horizon has been sued for damages arising out of a traffic accident involving a
Horizon employee. The matter is in the early stages of investigation, pleading
and discovery. No demand has been received. However, the initial "prayer" for
damages in



Page 38
<PAGE>   41

the complaint exceeds Horizon's $11,000 combined policy limits of primary and
excess insurance for this type of loss. Based upon investigation to date and
consultation with the Company's insurance carrier and legal counsel, management
does not believe that the ultimate resolution of this matter will have a
material adverse effect on the financial position of the Company.

NOTE 17 -- RELATED PARTY TRANSACTIONS

Included in the financial statements are the following related party balances
and transactions.

<TABLE>
<CAPTION>
                                                                       1999           1998
                                                                       ----           ----
<S>                                                                  <C>            <C>
Balances due from related parties .............................      $  2,406       $ 15,362
Note receivable from officer ..................................           439            452
Interest and other payables due to related party ..............           774             --
Revenues from related parties .................................        39,103         34,166
Cost of revenues from related parties .........................        30,020         24,652
Purchases from related parties ................................         2,793          3,000
Marketing expense paid (received) to/from related parties - net          (595)         1,212
Service agreement fees ........................................         2,007          1,598
Dividends paid to related party ...............................         6,500             --
</TABLE>

During fiscal 1997, both UpRight and Horizon entered into corporate services
agreements (the "Corporate Services Agreements") with Griffin Group
International Management LTD ("Griffin"), an affiliate of the Company. Pursuant
to the Corporate Services Agreements, Griffin provides consulting services to
UpRight and Horizon in various areas, including operations, finance and
accounting, asset management, strategic planning and policy, management
organization, marketing, technology and communications, and public relations.
During fiscal 1997, UpRight and Horizon paid Griffin $800 for services rendered
by Griffin pursuant to the Corporate Services Agreements. The Corporate Services
Agreements terminated on June 29, 1997. On May 12, 1997 the Company entered into
a corporate services agreement with Griffin pursuant to which Griffin will, for
a term of one fiscal year commencing June 30, 1997, provide consulting services
to the Company, UpRight and Horizon in various areas including operations,
finance and accounting, asset management, strategic planning and policy,
management organization, marketing, technology, communications, public relations
and SEC compliance and reporting. During fiscal years 1999 and 1998, the Company
paid an aggregate of $2,007 and $1,598, respectively, for services rendered by
Griffin.

The note receivable due from officer is secured by deed of trust and assignment
of rents and real estate owned by the officer. The note receivable carries
interest of 7.0%. The principal sum of the note and all accrued and unpaid
interest thereon shall be paid in full on or before May 27, 2001.

The former President of the Company resigned effective March 4, 1999 and was
granted severance compensation of $1,000.

NOTE 18 -- SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

Noncash investing and financing activities:

During fiscal year ended June 27, 1999, inventory was transferred to rental
equipment, in the amount of $2,191.

During fiscal year ended June 28, 1998, fixed assets were acquired using capital
lease obligations, in the amount of $128.

NOTE 19 -- CONCENTRATIONS OF CREDIT RISK

Financial instruments that subject the Company to concentration of credit risk
are cash equivalents and trade receivables. Cash equivalents consist principally
of short-term money market funds. These instruments are short-term in nature and
bear minimal risk. To date, the Company has not experienced significant losses
on these instruments.

The Company performs on-going credit evaluations of its customer's financial
conditions. Security is required on all accounts with credit limits in excess of
$50. UCC financing statements are filed, when necessary, for U.S. customers and
sixty days (from invoice date) letter of credit are required for export
shipments.



Page 39
<PAGE>   42

               W.R. CARPENTER NORTH AMERICA, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 JUNE 27, 1999, JUNE 28, 1998 AND JUNE 29, 1997
                      (IN THOUSANDS, EXCEPT PER-SHARE DATA)

NOTE 20 -- RECENT ACCOUNTING PRONOUNCEMENT

In March 1997, the FASB issued SFAS No. 130, "Reporting Comprehensive Income."
This statement establishes standards for reporting and display of comprehensive
income and its components in a full set of general-purpose financial statements.
This statement requires that all items that are required to be recognized under
accounting standards as components of comprehensive income be reported in a
financial statement that is displayed with the same prominence as other
financial statements. This new standard requires that an enterprise classify
items of other comprehensive income by their nature in a financial statement;
display the accumulated balances of other comprehensive income separately from
retained earnings and additional paid-in capital in the equity section of a
statement of financial position. This statement is effective for fiscal years
beginning after December 15, 1997. The Company has adopted SFAS No. 130, and as
of June 27, 1999, accumulated other comprehensive income amounts to $2,084.
Comprehensive income equals net income for fiscal years 1999, 1998 and 1997.

In April 1998, the American Institute of Certified Public Accountants issued
Statement of Position No. 98-5 (SOP No. 98-5), "Reporting on the Costs of
Start-up Activities." Adoption of SOP No. 98-5 in fiscal year 2000 will have an
impact of approximately $60 to the Company's financial statements.

NOTE 21 -- SUBSEQUENT EVENTS

Subsequent to June 27, 1999, UpRight entered into a note payable agreement for
approximately $2,500 in increased borrowings from an unrelated lender.

On August 9, 1999, UpRight entered into a financing agreement with a financial
institution, to renegotiate its existing line of credit of $20,000, that will
hold available to UpRight credit facilities in the aggregate total amount of
$40,000. Facility number one is a revolving line of credit for working capital
of up to $25,000; with a step-down of available commitment amount and
outstanding balances to $20,000 on January 31, 2000. Payment terms for the
revolving line of credit is interest monthly with all principal due and payable
at maturity, which is October 15, 2000, at which time all unpaid principal and
interest shall be due and payable. Interest accrues on amounts borrowed at the
institution's reference rate minus one half of one percent, or Libor plus 120
basis points. At June 27, 1999 the actual interest rate was 7.25%, and the
outstanding balance on the line of credit was $13,256 (that is reflected as
long-term), see note 8, with available funds of $11,744. Collateral includes a
security agreement assuring a first priority position covering: accounts
receivable, inventory and equipment (net of debt outstanding). Facility number
two is a revolving line of credit for funding equipment purchases related to the
boom manufacturing plant of up to $10,000. Payment terms are interest monthly,
all principal due and payable at maturity which is June 30, 2000, with periodic
principal reductions from refinance by certain leasing companies, with release
of equipment finance. Interest terms and security agreement are the same as
those noted above. As of June 27, 1999, no outstanding balance was due. Facility
number three is a revolving line of credit for real estate construction and
improvements of the boom manufacturing plant of up to $5,000. Payment terms are
interest monthly, all principal due and payable at maturity, which is June 30,
2000. Interest terms and security agreement are the same as noted above. As of
June 27, 1999, no outstanding balance was due.

On September 3, 1999, Horizon entered into a financing agreement with a
financial institution to increase its credit facilities from $5.3 million to
$46.3 million. The facility includes a $30.0 million term loan, payable in equal
principal payments plus accrued interest for 60 months. Interest is at Libor
plus 175 basis points. In addition, a $10 million facility was established for
purchasing rental equipment during fiscal 2000. This facility is interest only
and will convert to a 5 year term loan in July, 2000. Interest is based on Libor
plus 175 basis points. Finally, Horizon's revolver was increased from $5,250 to
$6,250.



Page 40
<PAGE>   43

               W.R. CARPENTER NORTH AMERICA, INC. AND SUBSIDIARIES

                                   SCHEDULE II
                        VALUATION AND QUALIFYING ACCOUNTS
           YEARS ENDED JUNE 27, 1999, JUNE 28, 1998 AND JUNE 29, 1997
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                  Balance at                                            Balance
                                  Beginning    Charged to   Charged to                    at
                                     of        Costs and      Other                      End
                                   Period      Expenses     Accounts    Deductions     of Period
                                   ------      --------     --------    ----------     ---------
<S>                               <C>          <C>          <C>         <C>            <C>
Allowances are
  deducted from the
  Asset to which
  they apply

Year ended June 27, 1999:

Reserve for
   Product liability               $ 6,340      $   351      $    --      $ 1,148       $ 5,543
Allowance for
   Uncollectible
     Accounts                          410          183           --          (25)          618
   Product obsolescence                550          436           --          435           551
                                   -------      -------      -------      -------       -------
                                   $ 7,300      $   970      $    --      $ 1,558       $ 6,712
                                   -------      -------      -------      -------       -------
Year ended June 28, 1998:

Reserve for
   Product liability               $ 5,235      $ 2,807      $    --      $ 1,702       $ 6,340
Allowances for
   Uncollectible accounts              364          292           --          246           410
   Product obsolescence                334          216           --           --           550
                                   -------      -------      -------      -------       -------
                                   $ 5,933      $ 3,315      $    --      $ 1,948       $ 7,300
                                   -------      -------      -------      -------       -------
Year ended June 29, 1997:
Reserve for Product liability      $ 4,102      $ 3,115      $    --      $ 1,982       $ 5,235
Allowance for
   Uncollectible accounts              287          180           --          103           364
   Product obsolescence                957           25           --          648           334
                                   -------      -------      -------      -------       -------
                                   $ 5,346      $ 3,320      $    --      $ 2,733       $ 5,933
                                   -------      -------      -------      -------       -------
</TABLE>



Page 41
<PAGE>   44

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

        None.



Page 42
<PAGE>   45

                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY.

        The following table sets forth certain information concerning the
directors and executive officers of the Company, UpRight and Horizon:

<TABLE>
<CAPTION>
NAME                       AGE     POSITION
----                       ---     --------
<S>                        <C>     <C>
Robert F. Stowe            55      Chairman of the Board of Directors of the Company
David K. Sargent           60      President and Director of the Company
Graham D. Croot            44      Chief Financial Officer of the Company
Noel Corcoran              53      Secretary of the Company
Peter B. Sawdy             67      Director of the Company
Barris Evulich             51      Vice President and General Manager of UpRight
Rick Penkert               36      Vice President and General Manager of Horizon
</TABLE>

        Robert F. Stowe has served as Chairman of the Board of Directors of the
Company since 1985. He is the founder of various trusts, the beneficiaries of
which are the family, relations and other descendants of Mr. Stowe (the "Stowe
Family Trusts"). Since 1974, Mr. Stowe has served as Chairman of various
companies which are owned by the Stowe Family Trusts and which are affiliates of
the Company. Mr. Stowe is a Fellow of the Institute of Chartered Accountants in
Australia.

        David K. Sargent served as Chief Executive Officer of the Company,
UpRight and Horizon from 1989 until December 31, 1997 and as President of the
Company, UpRight and Horizon from 1989 to June 28, 1998 and has served as
President of the Company from March 4, 1999 to the present. He has served as a
Director of the Company since 1994. Mr. Sargent resumed the position of
President of the Company in March 1999. Prior to 1989, Mr. Sargent was President
of Instant Zip-Up Limited, a distributor of UpRight products in the United
Kingdom. Mr. Sargent is currently a director of UpRight (U.K.) Limited (formerly
Instant Zip-Up Limited).

        Graham D. Croot has served as Chief Financial Officer of the Company
since 1990. He served as the Company's Treasurer from 1981 to 1989. In addition
to his responsibilities with the Company, Mr. Croot serves as chief financial
officer of various companies owned by the Stowe Family Trusts. Mr. Croot is a
member of The Australian Society of Certified Practicing Accountants.

        Noel Corcoran has served as Secretary of the Company since April 1997.
In addition to his responsibilities with the Company, since 1994, Mr. Corcoran
has served as secretary and in other capacities of various companies owned by
the Stowe Family Trusts. From 1990 to 1994, Mr. Corcoran served as the Financial
Controller of European Operations of UpRight. Mr. Corcoran is a Fellow of the
Association of Chartered Certified Accountants.

        Peter B. Sawdy has served as a Director of the Company since April 1997.
Mr. Sawdy is currently the Chairman of Peter Sawdy Associates, a business
consultancy. From 1990 to 1993, Mr. Sawdy was Chairman of Costain Group. Mr.
Sawdy has served in various director and advisory capacities with the Stowe
Family Trusts since 1985.

        Barris Evulich has served as Vice President and General Manager of
UpRight since January 1, 1998 and as Vice President-Engineering of UpRight from
1990 to December 31, 1997. Mr. Evulich joined UpRight in 1971 as Project
Engineer.

        Rick Penkert has served as Vice President and General Manager of Horizon
since January 1, 1999. Mr. Penkert served as Southeast Regional Manager of
Horizon from April 1998 until December 1998. Prior to that time, Mr. Penkert was
the Dallas, Texas Branch Manager from April 1994 until March 1998. Since joining
Horizon, Mr. Penkert has also served in the capacities of salesperson and Rental
Operations Manager.



Page 43
<PAGE>   46

ITEM 11. EXECUTIVE COMPENSATION.

        The following table sets forth for the last three fiscal years certain
compensation information about the Company's chief executive officer and the
other persons who served as executive officers of the Company, UpRight or
Horizon during fiscal year 1999 and earned in excess of $100,000 during such
year.

                           SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
                                                        ANNUAL COMPENSATION           ALL OTHER
NAME AND PRINCIPAL POSITION                 YEAR       SALARY          BONUS         COMPENSATION
---------------------------                 ----       ------          -----         ------------
<S>                                         <C>       <C>           <C>             <C>
David K. Sargent (1)                        1999      $     --      $     --
President of the Company                    1998       200,000            --
                                            1997       200,000        42,918
Graham D. Croot (2)                         1999      $330,000      $     --
Chief Financial Officer of the Company      1998            --            --
                                            1997            --            --
Barris Evulich (3)                          1999      $225,000      $ 20,000
 Vice President and General Manager         1998       153,169        78,000
 of UpRight                                 1997       101,973        40,750
Rick Penkert (4)                            1999      $164,140      $  3,744
 Vice President and General Manager         1998       101,731        75,000
 of Horizon                                 1997        83,192       105,003
Shaun Flanagan (5)                          1999      $238,500      $     --
  Vice President and General                1998       225,000            --
  Manager of Horizon                        1997       190,126        77,000
James T. Dillon (6)                         1999      $315,252      $     --        $1,000,000 (7)
                                            1998       337,500       194,875
                                            1997       250,000       178,352
</TABLE>

(1) Mr. Sargent served as Chief Executive Officer of the Company, UpRight and
Horizon until December 31, 1997 and as President of the Company, UpRight and
Horizon until June 28, 1998. He resumed the position of President of the Company
in March 1999 due to the departure of Mr. Dillon. Mr. Sargent is acting as
President of the Company pursuant to the corporate services agreement with
Griffin Group International Management Limited, an affiliate of the Company. See
"Item 13--Certain Relationships and Related Transactions."

(2) Until the start of fiscal year 1999, Mr. Croot's salary was paid by
Devereaux Holdings, a company owned by the Stowe Family Trusts. However, prior
to fiscal year 1999, Mr. Croot had been providing consulting services to the
Company pursuant to a corporate services agreement with Griffin Group
International Management Limited, an affiliate of the Company. See "Item
13--Certain Relationships and Related Transactions."

(3) Mr. Evulich served as Vice President and General Manager of UpRight
beginning January 1, 1998.

(4) Mr. Penkert served as Vice President and General Manager of Horizon
beginning January 1, 1999.

(5) Mr. Flanagan served as Vice President and General Manager of Horizon until
December 31, 1998. He remains a director of Horizon.

(6) Mr. Dillon served as Chief Executive Officer of the Company, UpRight and
Horizon beginning January 1, 1998 and as President of the Company, UpRight and
Horizon beginning June 29, 1998. Mr. Dillon resigned from the Company effective
March 4, 1999.

(7) Consists of severance payments, paid or accrued to Mr. Dillon during fiscal
year 1999.

DIRECTORS

        Directors of the Company are elected annually and hold office until the
next annual meeting of stockholders or until their



Page 44
<PAGE>   47

successors are duly elected and qualified.

        Directors of the Company do not receive any fees for services on the
Board of Directors. Directors are reimbursed for their expenses for each meeting
attended.

EMPLOYEE BENEFIT PLANS

        Employees of UpRight participate in a Taxsaver's Investment Plan (the
"UpRight 401(k) Plan"). The UpRight 401(k) Plan was originally adopted effective
as of January 1, 1984 as an addition to the Company's Employee Stock Ownership
Plan, originally adopted in January 1, 1975. The Company's Employee Stock
Ownership Plan was terminated in 1987. UpRight makes fixed contributions to the
UpRight 401(k) Plan for each year in an amount equal to 4% of the compensation
of all eligible participants, plus up to an additional 2% matching of
participants' contributions. The UpRight 401(k) Plan also contains features that
allow employees to save money before paying Federal income tax on the amount
saved. The UpRight 401(k) Plan covers all employees who have at least one year
of service, and is administrated by a Plan Committee, whose members are
appointed by UpRight's Board of Directors. The UpRight 401(k) Plan is intended
to conform to the provisions of the Employee Retirement Income Security Act of
1974. Contributions to the UpRight 401(k) Plan are fully vested as of December
31 in the year in which such contributions were made.

        Employees of Horizon participate in the Horizon High Reach 401(k) Plan
(the "Horizon 401(k) Plan"). Participation in this defined contribution plan is
available to all full-time employees who have completed at least one year of
service and attained the age of 21. Horizon makes fixed contributions to the
Horizon 401(k) Plan for each year in an amount up to 4% of the compensation of
all eligible participants. In addition to the fixed annual contribution, Horizon
is required to make a matching contribution equal to the participant's elective
contribution up to 2% of the participant's compensation for the calendar year.
Employee contributions to the Horizon 401(k) Plan are fully vested. Employer
contributions are vested in 20% annual increments beginning after the second
year of participation in the Horizon 401(k) Plan, with full vesting occurring
after the sixth year of participation. Employees are fully vested upon their
65th birthday. Employees of Horizon who had been employed by UpRight or Horizon
for one year as of December 31, 1993 are fully vested in the Horizon 401(k)
Plan.

INCENTIVE COMPENSATION

        The Company has in effect various arrangements pursuant to which certain
officers may receive incentive cash bonuses based upon the achievement of
financial performance objectives. The Company's Board of Directors determines
the amounts of incentive bonuses, and performance criteria for such bonuses.

DIRECTORS' AND OFFICERS' INSURANCE

        Group International Securities Limited, the parent of UpRight
International Limited, has purchased liability insurance for the directors and
officers of its subsidiaries, including the Company, UpRight and Horizon,
effective October 1, 1997, for an aggregate 24 months' premium of $200,000.
Directors and executive officers of the Company will pay no part of this
premium. The aggregate insurance coverage under the policy is limited to $15.0
million per policy period, and a $75,000 deductible for each claim, other than
claims arising from the Securities and Exchange Commission for which the
deductible is $150,000, is payable under the policy by Group International
Securities Limited in respect of any claim made against a director or officer
for which Group International Securities Limited has indemnified such director
or officer. The Company is currently in negotiations to obtain an extension of
this insurance policy or a new policy of liability insurance on similar terms.


Page 45
<PAGE>   48

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

        The following table sets forth, as of the date hereof, information with
        respect to the beneficial ownership of shares of the Company's Common
        Stock by each stockholder known by the Company to be the beneficial
        owner of more than 5% of such shares. No executive officers or directors
        of the Company own any shares of the Company's Common Stock.

<TABLE>
<CAPTION>
                                                                                               PERCENTAGE
NAME AND ADDRESS OF STOCKHOLDER        CLASS                              SHARES                OF CLASS
-------------------------------        -----                              ------                --------
<S>                                    <C>                                <C>                  <C>
WRC Holdings, Inc. (1)                 Class A Common Stock               55,000                  100%
801 South Pine Street                  Class B Common Stock                5,000                  100%
Madera, California 93637               Preferred Stock                    25,000                  100%
</TABLE>


(1)     All of the capital stock of WRC Holdings, Inc. is owned beneficially by
        UpRight International Limited. All of the capital stock of UpRight
        International Limited is owned beneficially by the Stowe Family Trusts.
        Mr. Stowe, who is not a beneficiary thereunder, appoints the trustees of
        the trusts.



Page 46
<PAGE>   49

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

        On May 12, 1997, the Company entered into a corporate services agreement
with Griffin Group International Management Limited ("Griffin"), an affiliate of
the Company (the "Company Corporate Services Agreement") pursuant to which
Griffin, for a term of one fiscal year commencing June 30, 1997, provides
consulting services to the Company, UpRight and Horizon in various areas
including operations, finance and accounting, asset management, strategic
planning and policy, management organization, marketing, technology,
communications, public relations and SEC compliance and reporting. The term of
the Company Corporate Services Agreement is automatically extended for
additional one-year periods, unless either party gives notice of termination 180
days prior to the end of such fiscal year. During fiscal year 1999, the Company
paid $2.0 million to Griffin for such services.

        UpRight International Manufacturing Ltd. ("UpRight Ireland"), an
affiliate of the Company located in Ireland, Vectur GmbH ("Instant
Deutschland"), an affiliate of the Company located in Germany, and Instant
Access Australia Pty. Ltd. ("Instant Australia"), an affiliate of the Company
located in Australia, each purchase and distribute products for UpRight in their
respective market areas. UpRight management believes that each of the foregoing
arrangements is conducted on an arm's-length basis and on terms at least as
favorable to UpRight as those generally available from unaffiliated third
parties. During fiscal year 1999, the Company's revenue from UpRight Ireland,
Instant Deutschland and Instant Australia were $1.2 million, $4.6 million and
$2.0 million, respectively. During fiscal year 1998, the Company's revenue from
UpRight Ireland, Instant Deutschland and Instant Australia were $4.3 million,
$3.1 million and $3.0 million, respectively. During fiscal year 1997, the
Company's revenue from UpRight Ireland, Instant Deutschland and Instant
Australia were $6.2 million, $1.7 million and $1.3 million, respectively. In
addition, UpRight and Horizon purchase and UpRight distributes in the United
States certain products manufactured by UpRight Ireland. During fiscal years
1999, 1998 and 1997, the Company's purchases from UpRight Ireland totaled
approximately $2.8 million, $3.0 million and $3.5 million, respectively. During
fiscal years 1999, 1998 and 1997, UpRight paid UpRight Ireland $1.5 million,
$1.2 million and $1.1 million, respectively, for participation in UpRight
Ireland's cooperative marketing programs.

        During fiscal years 1999, 1998 and 1997, the Company had revenue from
UpRight (U.K.) Limited (formerly Instant Zip-Up Limited) of approximately $31.2
million, $26.7 million and $20.8 million, respectively. An affiliate of the
Company owns a minority voting interest in UpRight (U.K.) Limited.

        At the end of fiscal year 1996, the Company was indebted to UpRight
International Limited for an aggregate principal amount of approximately $13.5
million. In fiscal year 1997 the Company repaid this indebtedness in full, and
at the end of fiscal years 1999, 1998, and 1997, the Company was not indebted to
UpRight International Limited.

        In May 1998, an executive officer of the Company executed two promissory
notes payable to the Company in the aggregate amount of $452,000. These notes
are secured by a deed of trust and assignment of rents and real estate owned by
the officer. The notes bear interest of 7.0% and the principal thereof and all
accrued and unpaid interest thereon is due in full on or before May 27, 2001.



Page 47
<PAGE>   50

                                     PART IV

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

(a) FINANCIAL STATEMENTS, FINANCIAL STATEMENT SCHEDULES AND EXHIBITS

        1.      FINANCIAL STATEMENTS

                See Index included on page 22

        2.      FINANCIAL STATEMENT SCHEDULES

                See Index included on page 22

        Financial Statement schedules other than those listed above are omitted
because they are not required or are not applicable, or the required information
is shown in the respective consolidated financial statements or notes thereto.

        3.      EXHIBITS

        The following Exhibits are filed herewith and made a part hereof:

<TABLE>
<CAPTION>
Exhibit
Number          Description of Document
------          -----------------------
<S>             <C>
*3.1(i)         Certificate of Incorporation of the Registrant, as amended.

*3.1(ii)        Bylaws of the Registrant, as amended.

*4.1            Indenture, dated as of June 10, 1997, by and among the
                Registrant, the Guarantors named therein and U.S. Trust Company
                of California, N.A.

*4.4            Form of Exchange Global Note.

*10.3           Industrial Lease, dated February 7 1997, between A.L.L., a
                general partnership, and UpRight, Inc.

*10.4           Lease, entered into as of November 1995, by and between Townview
                Partners, a Ohio partnership and UpRight, Inc.

*10.5           Recourse Agreement, dated February 11, 1997, by and between
                Horizon High Reach, Inc., and American Equipment Leasing.

*10.6           Management Services Agreement, dated May 12, 1997, by and
                between the Registrant and Griffin Group International
                Management Ltd.

*10.7           Lease, dated November 15, 1996, by and between Akzo Nobel
                Coatings, Inc., and Horizon High Reach, Inc.

*10.8           Lease, dated January 1997, by and between Morris Ragona and Joan
                Ragona, and Horizon High Reach, Inc.

*10.9           Agreement of Lease, dated January 26, 1995, by and between
                Richard V. Gunner and George Andros, and Horizon High Reach,
                Inc.

*10.10(i)       Lease Agreement, executed November 10, 1989, by and between
                Trussel Electric, Inc., and Up-Right, Inc., including Lease
                Extension Agreement dated February 28, 1994, Lease Modification
                Agreement dated January 26, 1994, and Notice of Option to Renew
                dated May 7, 1992.

**10.10(ii)     Lease Extension and Modification Agreement dated September 3,
                1998.

***10.10(iii)   Lease Extension and Modification Agreement dated October 28,
                1997.

*10.11          Lease Agreement (undated) by and between T.T. Templin and
                Horizon High Reach & Equipment Company.

*10.12          Agreement of Lease, dated October 15, 1992, by and between
                Robert I. Selsky and Up-Right Aerial Platforms, Assignment of
                Lease, dated June 1994, by and between Up-Right, Inc., and
                Horizon High Reach, Inc., and Consent to Assignment dated July
                15, 1994.

*10.13          Lease Agreement, dated April 27, 1990, by and between D.L.
                Phillips Investment Builders, Inc., and Up-Right, Inc., together
                with Supplemental Agreement to Lease, dated September 30, 1994,
                Assignment of Lease, dated June 18, 1990, by and between D.L.
                Phillips Investment Builders, Inc., and JMA, Ltd., Assignment of
                Lease dated June 1994, by and between Up-Right, Inc., and
                Horizon High Reach, Inc., and Consent to Assignment dated July
                15, 1994.

*10.14          Lease Renewal Agreement, dated October 19, 1992, between Ronald
                W. Werner and UpRight, Inc.

*10.15          Lease, dated March 7, 1995, by and between BMB Investment Group
                and Horizon High Reach, Inc.

**10.16         Lease Agreement, dated December 31, 1997, by and between William
                L. Morillon and Marie Anne Morillon and Horizon High Reach, Inc.

**10.17         Revolving Loan Agreement, dated May 5, 1998, between UpRight,
                Inc., and Union Bank of California.

**10.18(i)      Equipment Financing Agreement, dated April 23, 1998, between
                UpRight, Inc., and KeyCorp Leasing LTD.
</TABLE>



Page 48
<PAGE>   51
<TABLE>
<CAPTION>
Exhibit
Number         Description of Document
------         -----------------------
 <S>             <C>
10.18(ii)       Promissory Note of UpRight, Inc., and Security Agreement, dated
                April 1, 1999, between UpRight, Inc., and KeyCorp Leasing.

10.18(iii)      Promissory Note of UpRight, Inc., and Security Agreement, dated
                May 4, 1999, between UpRight, Inc., and KeyCorp Leasing.

****10.19(i)    Equipment Financing Agreement, dated February 26, 1999, between
                UpRight, Inc., and Associates Commercial Corp.

10.19(ii)       Security Agreement, dated May 13, 1999, between UpRight, Inc.,
                and Associates Commercial Corporation.

10.19(iii)      Security Agreement, dated June 2, 1999, between UpRight, Inc.,
                and Associates Commercial Corporation.

10.20           Lease Agreement, dated April 1, 1999, between FMCSR Holding
                Corp., and Horizon High Reach, Inc.

10.21           Lease, dated May 24, 1999, between Industrial Boxboard Company
                and Horizon High Reach, Inc.

*21.1           Subsidiaries of the Company

24.1            Power of Attorney (see page 50)

27.1            Financial Data Schedule
</TABLE>

* Incorporated herein by reference to the Company's Registration Statement on
Form S-4 (Reg. No. 333-31187), filed with the Securities and Exchange Commission
on July 11, 1997.

** Incorporated herein by reference to the Company's Annual Report on Form 10-K
for the fiscal year ended June 28, 1998, filed with the Securities and Exchange
Commission on September 28, 1998.

*** Incorporated herein by reference to the Company's Quarterly Report on Form
10-Q for the quarterly period ended September 27, 1998 filed with the Securities
and Exchange Commission on November 12, 1998.

**** Incorporated herein by reference to the Company's Quarterly Report on Form
10-Q for the quarterly period ended March 28, 1999, filed with the Securities
and Exchange Commission on May 12, 1999.

(b) REPORTS ON FORM 8-K.

        The Company filed a report on Form 8-K with the Securities and Exchange
Commission on June 25, 1999 announcing that, in an election held on June 10,
1999 by the United Steelworkers of America Union to certify the union as the
exclusive representative for the production and maintenance employees of UpRight
at UpRight's Selma and Madera, California facilities, such employees voted
against unionization and certification of the union.



Page 49
<PAGE>   52

                                   SIGNATURES

        Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Company has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                            W.R. CARPENTER NORTH AMERICA, INC.

Date: September 27, 1999

         By: /s/ David K. Sargent       By: /s/ Graham D. Croot
             ---------------------          ------------------------------------
            David K. Sargent                      Graham D. Croot
            President                             Chief Financial Officer

                                POWER OF ATTORNEY

        KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Graham D. Croot and David K. Sargent, and
each of them, his attorney-in-fact, with full power of substitution, for him in
any and all capacities, to sign any amendments to the Report, and to file the
same, with exhibits thereto and other documents in connection therewith, with
the Securities and Exchange Commission, hereby ratifying and confirming all that
said attorney-in-fact, or his substitute or substitutes, may do or cause to be
done by virtue hereof.

        Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Company and in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
            Signature                                       Title                                  Date
            ---------                                       -----                                  ----
<S>                                            <C>                                           <C>
      /s/ David K. Sargent                     President and Director                        September 27, 1999
---------------------------------              (Principal Executive Officer)
        David K. Sargent


       /s/ Graham D. Croot
---------------------------------              Chief Financial Officer                       September 27, 1999
         Graham D. Croot                       (Principal Financial Officer
                                               and Principal Accounting Officer)

       /s/ Peter B. Sawdy
--------------------------------              Director                                       September 27, 1999
         Peter B. Sawdy

       /s/ Robert F. Stowe
---------------------------------              Chairman of the Board of Directors            September 27, 1999
         Robert F. Stowe
</TABLE>

SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT TO SECTION
15(d) OF THE ACT BY REGISTRANTS WHICH HAVE NOT REGISTERED SECURITIES PURSUANT TO
SECTION 12 OF THE ACT

        No such annual report or proxy material has been sent to security
holders.



Page 50
<PAGE>   53

                                INDEX TO EXHIBITS


<TABLE>
<CAPTION>
Exhibit
Number          Description of Document
------          -----------------------
<S>             <C>
*3.1(i)         Certificate of Incorporation of the Registrant, as amended.

*3.1(ii)        Bylaws of the Registrant, as amended.

*4.1            Indenture, dated as of June 10, 1997, by and among the
                Registrant, the Guarantors named therein and U.S. Trust Company
                of California, N.A.

*4.4            Form of Exchange Global Note.

*10.3           Industrial Lease, dated February 7 1997, between A.L.L., a
                general partnership, and UpRight, Inc.

*10.4           Lease, entered into as of November 1995, by and between Townview
                Partners, a Ohio partnership and UpRight, Inc.

*10.5           Recourse Agreement, dated February 11, 1997, by and between
                Horizon High Reach, Inc., and American Equipment Leasing.

*10.6           Management Services Agreement, dated May 12, 1997, by and
                between the Registrant and Griffin Group International
                Management Ltd.

*10.7           Lease, dated November 15, 1996, by and between Akzo Nobel
                Coatings, Inc., and Horizon High Reach, Inc.

*10.8           Lease, dated January 1997, by and between Morris Ragona and Joan
                Ragona, and Horizon High Reach, Inc.

*10.9           Agreement of Lease, dated January 26, 1995, by and between
                Richard V. Gunner and George Andros, and Horizon High Reach,
                Inc.

*10.10(i)       Lease Agreement, executed November 10, 1989, by and between
                Trussel Electric, Inc., and Up-Right, Inc., including Lease
                Extension Agreement dated February 28, 1994, Lease Modification
                Agreement dated January 26, 1994, and Notice of Option to Renew
                dated May 7, 1992.

**10.10(ii)     Lease Extension and Modification Agreement dated September 3,
                1998.

***10.10(iii)   Lease Extension and Modification Agreement dated October 28,
                1997.

*10.11          Lease Agreement (undated) by and between T.T. Templin and
                Horizon High Reach & Equipment Company.

*10.12          Agreement of Lease, dated October 15, 1992, by and between
                Robert I. Selsky and Up-Right Aerial Platforms, Assignment of
                Lease, dated June 1994, by and between Up-Right, Inc., and
                Horizon High Reach, Inc., and Consent to Assignment dated July
                15, 1994.

*10.13          Lease Agreement, dated April 27, 1990, by and between D.L.
                Phillips Investment Builders, Inc., and Up-Right, Inc., together
                with Supplemental Agreement to Lease, dated September 30, 1994,
                Assignment of Lease, dated June 18, 1990, by and between D.L.
                Phillips Investment Builders, Inc., and JMA, Ltd., Assignment of
                Lease dated June 1994, by and between Up-Right, Inc., and
                Horizon High Reach, Inc., and Consent to Assignment dated July
                15, 1994.

*10.14          Lease Renewal Agreement, dated October 19, 1992, between Ronald
                W. Werner and UpRight, Inc.

*10.15          Lease, dated March 7, 1995, by and between BMB Investment Group
                and Horizon High Reach, Inc.

**10.16         Lease Agreement, dated December 31, 1997, by and between William
                L. Morillon and Marie Anne Morillon and Horizon High Reach, Inc.

**10.17         Revolving Loan Agreement, dated May 5, 1998, between UpRight,
                Inc., and Union Bank of California.

**10.18(i)      Equipment Financing Agreement, dated April 23, 1998, between
                UpRight, Inc., and KeyCorp Leasing LTD.

10.18(ii)       Promissory Note of UpRight, Inc., and Security Agreement, dated
                April 1, 1999, between UpRight, Inc., and KeyCorp Leasing.

10.18(iii)      Promissory Note of UpRight, Inc., and Security Agreement, dated
                May 4, 1999, between UpRight, Inc., and KeyCorp Leasing.

****10.19(i)    Equipment Financing Agreement, dated February 26, 1999, between
                UpRight, Inc., and Associates Commercial Corp.

10.19(ii)       Security Agreement, dated May 13, 1999, between UpRight, Inc.,
                and Associates Commercial Corporation.

10.19(iii)      Security Agreement, dated June 2, 1999, between UpRight, Inc.,
                and Associates Commercial Corporation.

10.20           Lease Agreement, dated April 1, 1999, between FMCSR Holding
                Corp. and Horizon High Reach, Inc.

10.21           Lease, dated May 24, 1999, between Industrial Boxboard Company
                and Horizon High Reach, Inc.

*21.1           Subsidiaries of the Company

24.1            Power of Attorney (see page 50)

27.1            Financial Data Schedule
</TABLE>


* Incorporated herein by reference to the Company's Registration Statement on
Form S-4 (Reg. No. 333-31187), filed with the Securities and Exchange Commission
on July 11, 1997.

** Incorporated herein by reference to the Company's Annual Report on Form 10-K
for the fiscal year ended June 28, 1998, filed with the Securities and Exchange
Commission on September 28, 1998.



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<PAGE>   54

*** Incorporated herein by reference to the Company's Quarterly Report on Form
10-Q for the quarterly period ended September 27, 1998 filed with the Securities
and Exchange Commission on November 12, 1998.

**** Incorporated herein by reference to the Company's Quarterly Report on Form
10-Q for the quarterly period ended March 28, 1999, filed with the Securities
and Exchange Commission on May 12, 1999.



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