COINMACH LAUNDRY CORP, 424B1, 1996-07-18

COINMACH LAUNDRY CORP
424B1, 1996-07-18
MISC INDUSTRIAL & COMMERCIAL MACHINERY & EQUIPMENT

Previous: COINMACH LAUNDRY CORP, S-1MEF, 1996-07-18

Next: GRAND PREMIER FINANCIAL INC, 424B3, 1996-07-18

<PAGE>

RULE NO. 424(b)(1)
REGISTRATION NO. 333-03587

PROSPECTUS

[LOGO]
-------------------------
COINMACH
-------------------------
SUPERIOR LAUNDRY SERVICES

4,120,000 SHARES

COINMACH LAUNDRY CORPORATION
COMMON STOCK

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

All of the shares of voting common stock, par value $.01 per share (the
"Common Stock"), offered hereby are being sold by Coinmach Laundry Corporation
("Coinmach Laundry" and, together with its consolidated subsidiaries, the
"Company"). Prior to this offering, there has been no public market for the
Common Stock. See "Underwriting" for a discussion of the factors considered in
determining the initial public offering price. Approximately $17,688,000 of the
estimated net proceeds to the Company will be used to redeem preferred stock
held by one of the Company's principal stockholders. The shares of Common Stock
offered hereby have been authorized for listing on the Nasdaq National Market,
subject to official notice of the issuance thereof, under the trading symbol
"WDRY."

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

THE COMMON STOCK OFFERED HEREBY INVOLVES A HIGH DEGREE OF RISK.SEE "RISK
FACTORS" BEGINNING AT PAGE 6.

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

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Underwriting Discounts and Proceeds to
Price to Public Commissions(1) Company(2)
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Share............... $14.00 $0.98 $13.02
- --------------------------------------------------------------------------------
Total(3)................ $57,680,000 $4,037,600 $53,642,400
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(1) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended. See "Underwriting."
(2) Before deducting expenses payable by the Company.
(3) The Company has granted to the Underwriters a 30-day option to purchase up
to an aggregate of 618,000 additional shares of Common Stock on the same
terms as set forth above solely to cover over-allotments, if any. If such
option is exercised in full, the total Price to Public, Underwriting
Discounts and Commissions and Proceeds to Company will be $66,332,000,
$4,643,240 and $61,688,760, respectively. See "Underwriting."

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

The shares of Common Stock offered by this Prospectus are offered by the
Underwriters subject to prior sale, to withdrawal, cancellation or modification
of the offer without notice, to delivery to and acceptance by the Underwriters
and to certain further conditions. It is expected that the delivery of the
shares of Common Stock will be made at the office of Lehman Brothers Inc., New
York, New York on or about July 23, 1996.

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

LEHMAN BROTHERS
DILLON, READ & CO. INC.
LAZARD FRERES & CO. LLC
FIELDSTONE
FPCG SERVICES, L.P.

July 17, 1996
<PAGE>

[INSERT PICTURE]

IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK
AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
TRANSACTIONS MAY BE EFFECTED ON THE NASDAQ NATIONAL MARKET OR OTHERWISE. SUCH
STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
<PAGE>

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by, and should be read in
conjunction with, the more detailed information and financial data, including
the consolidated financial statements and related notes thereto, presented
elsewhere in this Prospectus. As used in this Prospectus, unless the context
otherwise requires, all references to the "Company" herein refer to Coinmach
Laundry Corporation and its consolidated subsidiaries and their respective
predecessors and subsidiaries, in each case as applicable. References to the
"Offering" shall refer to the offering of the Common Stock in the United States
and Canada by the underwriters of the Offering (the "Underwriters"). Except as
otherwise indicated herein, all information in this Prospectus (a) assumes no
exercise of the Underwriters' over-allotment option and (b) has been adjusted
to give effect to a reclassification and an approximate 23.0:1 stock split of
the Common Stock.

THE COMPANY

GENERAL

The Company, established in 1948, is a leading supplier of coin-operated
laundry equipment services for multi-family properties in the United States.
The Company leases laundry rooms from building owners and management companies,
installs and services the laundry equipment and collects the revenues generated
from the machines. The Company owns and operates over 245,000 coin-operated
washers and dryers on routes in over 26,000 buildings located in 28 states and
the District of Columbia. The Company's routes are located throughout the
Northeast, Mid-Atlantic, Southeast, South-Central and Mid-West regions of the
United States. Based upon its knowledge of the industry, management believes
that the Company is the second largest such supplier in the United States and
the largest in the eastern United States.

The Company's business strategy is to increase operating cash flow and
profitability through a combination of internal expansion and selective
acquisitions. Internal expansion is comprised of: (i) increasing the installed
machine base by adding new customers, (ii) converting owner-operated facilities
into Company managed facilities, and (iii) implementing selective price
increases within the Company's operating regions. The Company's acquisition
strategy is to acquire local, regional and multi-regional route businesses from
independent operators. Management believes that by pursuing its business
strategy the Company will be positioned to realize: (i) additional operating
leverage and economies of scale associated with expanding its installed base of
machines, (ii) reduced operating expenses through consolidation of overhead
functions and facilities, and (iii) reduced equipment and parts costs on a per
unit basis due to increased purchasing requirements.

In January 1995, management, with its equity sponsor, Golder, Thoma, Cressey,
Rauner, Fund IV, L.P. ("GTCR"), acquired the Company's Northeast regional route
business and initiated a strategy of growth through acquisitions. This strategy
was designed to increase the Company's installed machine base in its existing
operating regions and to provide the Company with a leading market position in
new regions. The Company has grown its installed base from 54,000 machines as
of January 1995 to 245,000 machines as of May 1, 1996. Revenues and EBITDA(1)
have grown from $72.9 million and $13.6 million, respectively, for the twelve
months ended March 31, 1995 to $189.4 million and $56.2 million, respectively,
for the twelve months ended March 29, 1996, on a pro forma basis. See
"Unaudited Pro Forma Financial Data." These acquisitions have enabled the
Company to improve its operating margins and compete more aggressively for new
strategic contracts.

The coin-operated laundry services industry is characterized by stable cash
flows generated by long-term, renewable lease contracts with multi-family
property owners and management companies. Laundry service equipment is
installed and serviced in multi-family properties, including rental buildings,
condominium and cooperative associations and university and other institutional
housing. The coin-operated laundry services industry is fragmented nationally,
with many small, private and family-owned route businesses continuing to

1
<PAGE>

operate throughout all major metropolitan areas. According to information
provided by the Multi-housing Laundry Association, the industry consists of
over 280 independent operators. Based upon industry estimates, management
believes there are approximately 3.5 million machines installed in locations
throughout the United States, 2.5 million of which are managed by independent
operators such as the Company and 1.0 million of which are operated by the
owners of such locations.

Management believes that the Company maintains its strong market position in
each of its operating regions due to: (i) its long-standing reputation with
customers for providing reliable, quality service through the entire service
cycle (from installation to collection to service and maintenance), (ii) its
ability to manage information through its proprietary, fully-automated
management information and control systems (the "Integrated Computer Systems")
that coordinate its marketing efforts and monitor all aspects of its
operations, and (iii) its experienced senior management team.

RECENT DEVELOPMENTS

On April 1, 1996, the Company acquired the route business of Allied Laundry
Equipment Company, located in St. Louis, Missouri (the "Allied Acquisition"),
as part of its acquisition strategy and its plan to establish a larger market
presence in the Mid-West. The Allied Acquisition increased the Company's
installed base by approximately 24,000 machines. On a pro forma basis for the
year ending March 29, 1996, the Allied Acquisition contributed an increase of
approximately $3.3 million of EBITDA(1) and approximately $10.6 million of
revenue. In addition, the Company is evaluating several other local and
regional route acquisition opportunities. The Company has not, however, entered
into any definitive agreements or letters of intent for such prospective
acquisitions. Moreover, there can be no assurance that, subsequent to ongoing
negotiations and due diligence reviews, the Company will complete any such
acquisitions.
- --------
(1) EBITDA represents earnings from continuing operations before deductions for
interest, income taxes, depreciation and amortization. Management believes
that EBITDA is widely used in the industry as a measure of a company's
operating performance. Additionally, management believes that EBIDTA is an
indicator of the Company's ability to service existing debt, potential
future increases in debt and capital requirements. However, EBITDA is not
intended to represent cash flows for the period, nor has it been presented
as an alternative to either (i) operating income (as determined by
generally accepted accounting principles ("GAAP")) as an indicator of
operating performance or (ii) cash flows from operating, investing and
financing activities (as determined by GAAP) as a measure of liquidity.
Given that EBITDA is not a measurement determined in accordance with GAAP
and is thus susceptible to varying calculations, EBITDA as presented may
not be comparable to other similarly titled measures of other companies.
See "Management's Discussion and Analysis of Financial Condition and
Results of Operations."

2
<PAGE>

THE OFFERING

<TABLE>
<S> <C>
Common Stock offered by the
Company........................... 4,120,000 shares
Total Common Stock and Non-Voting
Common Stock to be outstanding
after the Offering................ 10,421,174 shares(1)
Common Stock to be outstanding
after the Offering................ 9,940,526 shares(1)
Non-Voting Common Stock, $.01 par
value per share (the "Non-Voting
Common Stock") to be outstanding
after the Offering................ 480,648 shares
Nasdaq National Market Symbol...... "WDRY"
Use of Proceeds.................... The net proceeds to be received by the Com-
pany from the Offering will be utilized by
the Company: (i) to redeem the Company's
non-participating, non-voting preferred
stock, par value $.01 per share (the "Pre-
ferred Stock") for an aggregate redemption
price equal to approximately $19.1 million
(see "Description of Capital Stock--The Re-
classification and Stock Split"), (ii) to
pay GTCR IV, L.P. ("GTCR IV"), the general
partner of GTCR, a termination fee in an
amount equal to $500,000 in connection with
the termination of the Company Management
Agreement (see "Certain Relationships and
Related Transactions--Management and Con-
sulting Services Agreements"), (iii) to re-
pay in full all outstanding indebtedness
under the Company's revolving credit facil-
ity and (iv) for general corporate purpos-
es, which may include certain selected ac-
quisitions or open market purchases from
time to time of the Company's outstanding
indebtedness. See "Use of Proceeds."
</TABLE>
- --------
(1) Does not include (i) 735,612 shares of Common Stock issuable upon exercise
of stock options outstanding after the Offering, of which 147,122 shares of
Common Stock will be issuable with respect to options that are exercisable
immediately after the Offering, and (ii) 1,103,419 shares of Common Stock
issuable upon exercise of options granted or to be granted pursuant to the
Company's 1996 Employee Stock Option Plan (the "1996 Stock Option Plan").
See "Management--Grant of Options; 1996 Employee Stock Option Plan."

3
<PAGE>

BACKGROUND

Coinmach Industries Co., L.P. ("Coinmach Industries") was established as a
private coin-operated laundry equipment services company in 1947. On January
31, 1995, The Coinmach Corporation ("TCC"), a company formed by GTCR, members
of the Company's senior management and certain other investors acquired all of
the partnership interests of Coinmach Industries and Super Laundry Equipment
Co., L.P. from CIC I Acquisition Corp. ("CIC") (the "Coinmach Acquisition").
Solon Automated Services, Inc. ("Solon") began as a private coin-operated
laundry equipment services business in 1948. On April 5, 1995, GTCR and
substantially all of the other stockholders of TCC formed the Company to
acquire all of the capital stock of Solon (the "Solon Acquisition"). On
November 30, 1995, TCC merged (the "Merger") with Solon and entered into a
series of refinancing transactions (the "Refinancing"), whereupon the surviving
corporation changed its name to "Coinmach Corporation." Coinmach Corporation
("Coinmach") is the principal operating subsidiary of the Company. See "The
Company--History."

THE RECLASSIFICATION

In connection with the Offering, the Company is simplifying its capital
structure by reclassifying its capital stock such that all seven classes of the
Company's issued and outstanding common stock prior to the Offering will be
reclassified into one class of preferred stock and two classes of common stock
(voting and non-voting). Pursuant to such reclassification, holders of each
class of the Company's Common Stock outstanding prior to the Offering shall
receive shares of Common Stock or Non-Voting Common Stock in an amount equal to
the aggregate number of shares of all classes of common stock held by such
holders. Additionally, since certain classes of the Company's common stock
outstanding prior to the Offering entitled the holders thereof to a "preferred
return" (such classes being hereinafter referred to as the "Preferred Shares"),
the Company will also issue to holders of such Preferred Shares, shares of
Preferred Stock or Common Stock representing the value of such "preferred
return" as more fully described below. See "Description of Capital Stock--The
Reclassification and Stock Split."

Prior to the Offering, holders of Preferred Shares prior to participating
ratably with respect to dividends paid on all classes of common stock, were
entitled to receive a "preferred return" in an amount equal to the sum of: (i)
preferred dividends on such Preferred Shares in an amount equal to the accrued
yield (at a rate of 8% per annum, compounded quarterly) on their original
investment in such Preferred Shares (the "Unpaid Yield"); and (ii) an amount
equal to their original investment in such Preferred Shares (the "Preferred
Investment"). In order to enable the holders of Preferred Shares (other than
members of the Company's management) to realize the value of the Unpaid Yield
and the Preferred Investment to which such holders are entitled, the Company
shall issue to such holders shares of Preferred Stock in an amount equal to the
sum of: (i) the Unpaid Yield, in an aggregate amount of approximately $1.8
million; plus (ii) the Preferred Investment, in an aggregate amount of
$17,339,062. Holders of Preferred Shares who receive Preferred Stock shall
realize the economic value of their Unpaid Yield and Preferred Investment
through the Company's redemption of the Preferred Stock from a portion of the
proceeds of the Offering. Holders of Preferred Shares who are members of the
Company's management shall receive shares of Common Stock in an amount equal to
the sum of their Unpaid Yield and Preferred Investment. See "Use of Proceeds"
and "Description of Capital Stock--The Reclassification and Stock Split."

4
<PAGE>

SUMMARY CONSOLIDATED FINANCIAL AND OPERATING DATA
(IN THOUSANDS, EXCEPT RATIOS AND MACHINE DATA)

The following table presents summary historical financial data of the Company
for the twelve months ended March 29, 1996 (which includes the combined
operations of Solon and TCC) and pro forma financial data of the Company for
the twelve months ended March 29, 1996 (which includes the combined operations
of Solon and TCC), giving effect to (i) the Offering, (ii) certain
acquisitions, including the Allied Acquisition, and (iii) operating
efficiencies resulting from the Merger, as if such transactions occurred at the
beginning of the period (or in the case of Balance Sheet Data, as of the date
of such data). The unaudited pro forma combined financial data are not
necessarily indicative of either future results of operations or results that
might have been achieved if the foregoing transactions had been consummated as
of the indicated dates. The financial data set forth below should be read in
conjunction with the Company's combined consolidated financial statements and
the related notes thereto presented elsewhere in this Prospectus and with
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."

<TABLE>
<CAPTION>
COINMACH LAUNDRY CORPORATION(1)
-------------------------------
PRO FORMA
TWELVE MONTHS TWELVE MONTHS
ENDED MARCH 29, ENDED MARCH 29,
1996 1996
--------------- ---------------
(UNAUDITED)
<S> <C> <C>
OPERATING DATA:
Revenues....................................... $178,789 $189,357
Laundry operating expenses..................... 123,441 129,891
General and administrative expenses............ 4,195 3,298
Depreciation and amortization.................. 36,635 38,341
Operating income............................... 12,318 17,827
Loss before extraordinary item................. (8,639) (5,958)
BALANCE SHEET DATA (AT END OF PERIOD):
Property and equipment, net.................... $ 82,699 $ 90,899
Total assets................................... 249,148 282,782
FINANCIAL RATIOS AND OTHER DATA (UNAUDITED):
Cash flows from operating activities........... $ 24,403 $ 30,384
Cash used for investing activities............. (39,201) (40,837)
Cash from financing activities................. 23,882 23,882
EBITDA(2)...................................... 48,953 56,168
EBITDA margin(3)............................... 27.4% 29.7%
Operating margin(4)............................ 6.9% 9.4%
Capital expenditures........................... 27,338 28,974
Number of machines (rounded)................... 221,000 245,000
</TABLE>
- --------
(1) Historical financial data for each of TCC (and its predecessors) and Solon
(for periods prior to April 5, 1995), in each case the predecessors of
Coinmach Laundry Corporation, are contained in the Selected Historical
Consolidated Financial Data and the financial statements and related notes
thereto presented elsewhere in this Prospectus.

(2) EBITDA represents earnings from continuing operations before deductions for
interest, income taxes, depreciation and amortization. Management believes
that EBITDA is widely used in the industry as a measure of a company's
operating performance. Additionally, management believes that EBITDA is an
indicator of the Company's ability to service existing debt, potential
future increases in debt and capital requirements. However, EBITDA is not
intended to represent cash flows for the period, nor has it been presented
as an alternative to either (i) operating income (as determined by GAAP) as
an indicator of operating performance or (ii) cash flows from operating,
investing and financing activities (as determined by GAAP) as a measure of
liquidity. Given that EBITDA is not a measurement determined in accordance
with GAAP and is thus susceptible to varying calculations, EBITDA as
presented may not be comparable to other similarly titled measures of other
companies. See "Management's Discussion and Analysis of Financial Condition
and Results of Operations."

(3) EBITDA margin represents EBITDA as a percentage of revenues. Management
believes that EBITDA margin is a useful measure to evaluate the Company's
performance over various sales levels. EBITDA margin should not be
considered as an alternative for measurements determined in accordance with
GAAP.

(4) Operating margin represents operating income as a percentage of revenues.

5
<PAGE>

RISK FACTORS

The following risk factors should be considered carefully in addition to the
other information contained in this Prospectus before purchasing the Common
Stock offered hereby.

Substantial Indebtedness

The Company will continue to have substantial indebtedness and debt service
requirements after the Offering. As of March 29, 1996, on a pro forma basis
after giving effect to the Offering, assuming no reductions to indebtedness
resulting from the application of the net proceeds therefrom, the Company's
indebtedness would have been approximately $202.8 million and stockholders'
equity $31.7 million.

The Company's level of indebtedness will have several important effects on
its future operations, including the following: (i) a significant portion of
the Company's cash flow from operations will be required to pay interest on
its indebtedness and will not be available for other purposes; (ii) the
financial covenants and other restrictions contained in certain of the
financing agreements governing the Company's indebtedness will require the
Company to meet certain financial tests and will limit its ability to borrow
additional funds or to dispose of assets; (iii) the Company's ability to
obtain additional financing in the future for working capital, capital
expenditures, acquisitions and general corporate purposes may be impaired; and
(iv) the Company's ability to adapt to changes in the coin-operated laundry
equipment services industry and to economic conditions in general could be
limited. Coinmach Laundry is a holding company that will be dependent upon its
principal operating subsidiary, Coinmach, as its primary source of revenue
subsequent to the Offering. The financial covenants contained in the financing
agreements governing the Company's indebtedness restrict Coinmach's ability to
make dividends, distributions or other payments to Coinmach Laundry.
Additionally, the Company's ability to meet its debt service obligations and
to reduce its total debt will be dependent upon its future performance, which
will be subject to general economic conditions and to financial, business and
other factors affecting the operations of the Company, many of which are
beyond its control. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations --Liquidity and Capital Resources."

An inability of the Company to comply with the financial covenants or other
conditions contained in the financing agreements governing the Company's
indebtedness could result in an acceleration of amounts due thereunder. If the
Company is unable to meet its debt service obligations, it could be required
to take certain actions such as reducing or delaying capital expenditures,
selling assets, refinancing or restructuring its indebtedness, selling
additional equity capital or other actions. There is no assurance that any of
such actions could be effected on commercially reasonable terms, if at all, or
on terms permitted under the applicable financing agreements. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations--Liquidity and Capital Resources."

Historical Net Losses

In the past, the Company has experienced net losses. The Company incurred a
loss before extraordinary items of $6.1 million and $2.5 million for the
period commencing April 5, 1995 to September 29, 1995, and the six months
ended March 29, 1996, respectively. As of March 29, 1996, the Company had an
accumulated deficit of approximately $18.7 million. No assurance can be given
that net losses will not occur in future periods.

Dependence Upon Lease Renewals

The Company's business is highly dependent upon the renewal of its lease
contracts with property owners and management companies. The Company's
business strategy has historically focused on obtaining long-term, renewable
lease contracts. Management estimates that over 89% of its customers are
subject to long-term leases with initial terms of three to ten years.
Management estimates that although approximately 13% of the Company's leases
expire each year, the Company annually loses only 1-2% of its overall
installed machine base to competitors or owner-operators. These losses,
however, do not take into account and may be offset by, the

6
<PAGE>

addition of new locations to its installed base of machines achieved through
the Company's sales and marketing efforts. There can be no assurance that the
Company's high retention rate will continue or that its new leases will
contain the same renewal and related material terms. See "Business--
Description of Operations--Location Leasing."

Risks of Acquisitions and the Failure to Integrate Acquired Businesses

As part of its business strategy, the Company will continue to evaluate
opportunities to acquire local, regional and multi-regional route businesses.
There can be no assurance that the Company will find attractive acquisition
candidates or effectively manage the integration of acquired business into its
existing business. If the expected operating efficiencies from such
transactions do not materialize, if the Company fails to integrate new
businesses into its existing business, or if the costs of such integration
exceed expectations, the Company's operating results and financial condition
could be adversely affected. Future acquisitions by the Company could result
in the incurrence of debt, the potentially dilutive issuance of equity
securities and the incurrence of contingent liabilities and amortization
expenses related to goodwill and other intangible assets, any of which could
adversely affect the Company's operating results and financial condition.

Capital Requirements

The Company must continue to make capital expenditures to maintain its
operating base, including investments in equipment and contract maintenance.
The Company spent approximately $27.3 million on capital expenditures for the
year ended March 29, 1996. While the Company estimates that it will generate
sufficient cash flow from operations to finance anticipated capital
expenditures, there can be no assurance that it will be able to do so.

Reduced Occupancy Levels

Extended periods of reduced occupancy can adversely affect the Company's
operations. In a period of occupancy decline, the Company could be faced with
reductions in revenues and cash flow from operations in certain areas. In past
periods of occupancy decline, management designed incentive programs that were
successful in maintaining stable profit margins by offering owners and
management companies financial incentives relating to increased occupancy
levels (and the use of laundry room facilities) in exchange for certain
guaranteed minimum periodic payments. Although the Company is geographically
diversified, there can be no assurance that the Company will maintain its
revenue levels or cash flow from operations in periods of low occupancy.

Historical Decline in Revenues

Due to previous capital constraints and debt service requirements, the
Company experienced declines in revenues from operations during certain
periods over the past three fiscal years. Growth in revenues is driven by a
number of factors, including market conditions, the size of the operating base
of machines, the number of installed machines, the ability to maintain and
expand the machine base through an appropriate level of capital expenditures
(which was limited in each of the last three fiscal years), and actual revenue
generated on a per-machine basis. The Company is continually monitoring and
maintaining its operating base by purchasing and maintaining equipment and
pursuing its business strategy of acquiring route businesses to increase
operating leverage. There can be no assurance that revenues from operations
will increase or maintain current levels in future periods.

Dependence on Key Personnel

The Company's continued success will depend largely on the efforts and
abilities of its executive officers and certain other key employees. The
Company does not maintain insurance policies with respect to such employees,
and the Company's operations could be affected adversely if, for any reason,
such officers or key employees do not remain with the Company. See
"Management."

7
<PAGE>

Control by Principal Shareholder

Immediately after the Offering, GTCR will own approximately 43.72% of the
outstanding shares of Common Stock and Non-Voting Common Stock (before giving
effect to shares of Common Stock issuable upon exercise of options which are
currently vested and exercisable). Upon consummation of the Offering, GTCR
will enter into a Voting Agreement with each of the holders of Common Stock
prior to the Offering (the "Voting Agreement") that will give GTCR the ability
to designate for election a majority of the Company's directors and determine
the outcome of substantially all issues submitted to the Company's
stockholders, including mergers, sales of all or substantially all of the
Company's assets and similar fundamental corporate changes.

Benefits to GTCR

Approximately $17,688,000 of the net proceeds to the Company from the
Offering will be used to redeem all of the shares (including all unpaid
dividends thereon) of Preferred Stock owned by GTCR. In addition, GTCR shall
receive $500,000 of the net proceeds to the Company from the Offering as
consideration for its termination of the Management and Consulting Services
Agreement (the "Company Management Agreement"), dated July 26, 1995, between
the Company and GTCR IV. See "Certain Relationships and Related Transactions."

Competition

The coin-operated laundry equipment services industry is highly competitive,
capital intensive and requires reliable, quality service. The industry is
fragmented nationally, with many small, private and family-owned businesses
operating throughout most major metropolitan areas. The Company competes
against many privately-owned businesses that may have greater or more flexible
financial resources than the Company.

Significant Intangible Assets

At March 29, 1996, approximately $103.8 million or 41.7% of the Company's
total assets were intangible assets consisting primarily of contract rights
and goodwill. Adjusted for the Offering and the Allied Acquisition,
approximately $111.2 million or 39.3% of the Company's total assets would have
been intangible assets as of March 29, 1996. In the event of a sale or
liquidation, there can be no assurance that the value of the Company's
intangible assets would be realized.

Dividend Policy

The Company has not declared or paid any cash dividends on its capital stock
and does not intend to pay cash dividends on its capital stock in the
foreseeable future. Declaration of dividends on the Common Stock will depend
upon, among other things, the Company's results of operations, financial
condition, capital requirements and general business condition. At the present
time, the Company's ability to pay dividends on the Common Stock is subject to
restrictions contained in certain of the Company's outstanding debt and
financing agreements. See "Dividend Policy."

Dilution

The proposed initial public offering price is substantially higher than the
book value per outstanding share of Common Stock. Accordingly, purchasers in
the Offering will suffer immediate and substantial dilution in net tangible
book value in the amount of $21.63 per share based on the initial public
offering price of $14.00 per share. Additional dilution will occur upon the
exercise of outstanding options granted by the Company to members of
management and certain employees pursuant to the 1996 Stock Option Plan. See
"Dilution"; "Management--1996 Stock Option Plan."

8
<PAGE>

Management Discretion Regarding Proceeds of the Offering

The Company has not yet allocated a substantial portion of the net proceeds
of the Offering to specific uses. Management will have broad discretion as to
the application of the Offering proceeds. Pending the Company's use of such
proceeds for general corporate purposes and possible acquisitions, such
proceeds will be placed in short-term, interest-bearing, investment-grade debt
securities, certificates of deposit or direct or guaranteed obligations of the
United States. It is possible that the return on such investments will be less
than that which would be realized were the Company immediately to use such
funds for other purposes.

Environmental Regulation

The Company's business and operations are subject to federal, state and
local environmental laws and regulations that impose limitations on the
discharge of, and establish standards for the handling, generation, emission,
release, discharge, treatment, storage and disposal of, certain materials,
substances and wastes. To the best of management's knowledge, there are no
existing or potential environmental claims against the Company, nor has the
Company received any notification of responsibility for, or any inquiry or
investigation regarding, any disposal, release or threatened release of any
hazardous material, substance or waste generated by the Company that is likely
to have a material adverse effect on the Company's business or financial
condition. However, the Company cannot predict with any certainty that it will
not in the future incur any liability under environmental laws and regulations
that could have a material adverse effect on the Company's business or
financial condition.

Anti-Takeover Provisions

Certain provisions of the Company's Third Amended and Restated Certificate
of Incorporation (the "Third Amended and Restated Certificate of
Incorporation") and the Second Amended and Restated Bylaws (the "Second
Amended and Restated Bylaws") may discourage, delay or make more difficult a
change in control of the Company, or prevent the removal of incumbent
directors even if some, or a majority, of the Company's stockholders were to
deem such an attempt to be in the best interest of the Company. Among other
things, the Third Amended and Restated Certificate of Incorporation allows the
Board of Directors of the Company (the "Board") to issue shares of preferred
stock in the future and fix the rights, privileges and preferences of those
shares without any further vote or action by the stockholders. The rights of
the holders of Common Stock will be subject to, and may be adversely affected
by, the rights of the holders of any preferred stock that may be issued in the
future. While the Company has no present intention to issue shares of
preferred stock, any such issuance could have the effect of making it more
difficult for a third party to acquire a majority of the outstanding voting
stock of the Company. In addition, the Company is subject to the anti-takeover
provisions of Section 203 of the Delaware General Corporation Law, which could
have the effect of delaying or preventing a change in control of the Company.
See "Description of Capital Stock."

Shares Eligible for Future Sale; Registration Rights

Sales of substantial amounts of Common Stock in the public market following
the Offering could adversely affect the market price of the Common Stock. Of
the 10,421,174 shares of Common Stock and Non-Voting Common Stock that will be
outstanding following the Offering prior to giving effect to the exercise of
any options to purchase Common Stock granted by the Company, 4,120,000 shares
of Common Stock offered hereby will be freely tradeable, except those
purchased by "affiliates" of the Company, as such term is defined under Rule
144 of the Securities Act of 1933, as amended (the "Securities Act"). The
remaining 6,301,174 outstanding shares of Common Stock and Non-Voting Common
Stock are considered "restricted securities" for the purpose of Rule 144 under
the Securities Act. The sale of these restricted securities, together with any
shares purchased in the Offering by affiliates, is limited by lock-up
agreements under which the holders of the restricted shares have agreed that
they will not, without the prior written consent of Lehman Brothers Inc.,
offer, sell, contract to sell or otherwise dispose of their shares for a
period of 180 days from the date of this Prospectus. After expiration of such
lock-up agreements, all of the 6,301,174 restricted securities will be
eligible for sale under Rule 144 of the Securities Act. See "Shares Eligible
for Future Sale."

9
<PAGE>

Absence of Prior Public Market; Possible Volatility of Stock Price

Prior to the Offering, there has been no public market for the Common Stock.
Although the Company has applied to list the Common Stock on the Nasdaq
National Market, there can be no assurance that an active public market for
the Common Stock will develop or, if it does develop, that it will be
sustained after the completion of the Offering. The initial offering price
will be determined through negotiations between the Company and the
Underwriters and may not be indicative of the market price for the Common
Stock after the Offering. There can be no assurance that the market price of
the Common Stock will not decline below the initial public offering price. The
trading price of the Common Stock may be volatile and may fluctuate based upon
a number of factors, including business performance, announcements by the
Company or changes in general market conditions. See "Underwriting."

THE COMPANY

GENERAL

The Company is a leading supplier of coin-operated laundry equipment
services for multi-family properties in the United States. The Company owns
and operates over 245,000 coin-operated washers and dryers on routes in over
26,000 buildings in 28 states and the District of Columbia. The Company
operates in the Northeast, Mid-Atlantic, Southeast, South-Central and Mid-West
regions of the United States. Based upon its knowledge of the industry,
management believes that the Company is the second largest such supplier in
the United States and the largest in the eastern United States.

The Company is a Delaware corporation with executive offices located at 55
Lumber Road, Roslyn, New York 11576, and its telephone number is (516) 484-
2300.

HISTORY

Coinmach Industries was established as a private, coin-operated laundry
equipment service company in 1947. On January 31, 1995, TCC (a company formed
by GTCR, members of the Company's senior management and certain other
investors) consummated the Coinmach Acquisition pursuant to which all of the
partnership interests of Coinmach Industries and Super Laundry Equipment Co.,
L.P. from CIC. In 1948, Solon began as a coin-operated laundry equipment
service business. On April 5, 1995, GTCR and substantially all of the other
stockholders of TCC formed the Company and consummated the Solon Acquisition
pursuant to which the Company acquired all of the capital stock of Solon. On
November 30, 1995, TCC merged with Solon, whereupon the surviving corporation
changed its name to "Coinmach Corporation." Coinmach Corporation is the
principal operating subsidiary of the Company.

Prior to the transactions described above, on October 20, 1989, CIC, a non-
operating holding company, acquired, through a series of related transactions,
a controlling general partnership interest in Coinmach Industries and all of
the issued and outstanding capital stock of Super Laundry Equipment Corp. (the
"1989 Transaction"). CIC incurred approximately $44.0 million of bank debt and
approximately $31.5 million of subordinated indebtedness in connection with
the 1989 Transaction and subsequent related borrowings. As a result of the
1989 Transaction and such subsequent borrowings, CIC's capital structure
became over-leveraged and unsustainable. Consequently, on December 15, 1993,
CIC filed a voluntary prepackaged petition for reorganization under Chapter 11
of the United States Bankruptcy Code (the "Plan"). On January 21, 1994, the
United States Bankruptcy Court confirmed the Plan, which resulted in ownership
of CIC being transferred to its subordinated lenders. The Plan provided for
CIC's existing senior subordinated notes, junior subordinated promissory
notes, preferred stock and common stock to be exchanged for 87,000 shares of
common stock of CIC valued at approximately $24.2 million.

10
<PAGE>

The Merger and Refinancing

On November 30, 1995, in connection with the Merger, the Company implemented
the Refinancing, consisting of: (i) an exchange offer, (ii) a debt offering,
(iii) a new $35 million revolving credit facility (the "Revolving Credit
Facility"), (iv) repayment of Coinmach Industries' then-existing credit
facility and (v) repayment of certain other secured indebtedness of the
Company. The Company implemented the Refinancing to extend the maturity of its
debt obligations, repay indebtedness and improve its financial flexibility to
pursue its business strategy and achieve improved consolidated operating
performance.

As of June 15, 1996, the Company had approximately $5.0 million of
indebtedness outstanding under the Revolving Credit Facility, $196.7 million
of issued and outstanding 11 3/4% Senior Notes due 2005 (the "Senior Notes"),
and $5.0 million of issued and outstanding 12 3/4% Senior Notes due 2001 (the
"Old Senior Notes").

11
<PAGE>

USE OF PROCEEDS

The net proceeds to the Company from the sale of the 4,120,000 shares of
Common Stock offered hereby are estimated to be approximately $52.6 million
(approximately $60.7 million if the Underwriters' over-allotment option is
exercised in full), at the initial public offering price of $14.00 per share.
The Company intends to use such net proceeds: (i) to redeem all of the
Preferred Stock previously issued to GTCR and certain other stockholders of
the Company as part of the reclassification of the Company's capital stock for
an aggregate redemption price of $19,132,501 (assuming a closing of the
Offering on June 30, 1996), see "Description of Capital Stock--The
Reclassification and Stock Split," (ii) to pay GTCR IV, the general partner of
GTCR, a termination fee in an amount equal to $500,000 in connection with the
termination of the Company Management Agreement, see "Certain Relationships
and Related Transactions--Management and Consulting Services Agreements,"
(iii) to repay in full approximately $6.1 million of indebtedness outstanding
under the Revolving Credit Facility, and (iv) for general corporate purposes,
which may include certain selected acquisitions or open market purchases from
time to time of the Company's outstanding indebtedness. Although the Company
has had preliminary discussions with respect to several acquisition
opportunities, no agreement or understanding with respect to any specific
acquisition has been reached. There can be no assurance that any such
acquisitions will be made. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations--Liquidity and Capital
Resources."

Outstanding borrowings under the Revolving Credit Facility were
approximately $6.1 million as of July 15, 1996. Amounts under the Revolving
Credit Facility repaid with proceeds from the Offering may be re-borrowed, and
any such re-borrowing will be used for general corporate purposes, which may
include making certain selected acquisitions.

Other than as described above, the Company has no current specific plan for
the use of the net proceeds of the Offering. See "Risk Factors--Management
Discretion Regarding Proceeds of the Offering." The principal purposes of the
Offering are to (i) permit the Company to promptly take advantage of favorable
acquisition opportunities, as available, (ii) increase the Company's financial
flexibility and facilitate future access to public markets and (iii) establish
a public market for the Company's Common Stock. The net proceeds from the
Offering, pending their ultimate use, will be invested in short-term,
investment grade, interest-bearing securities, certificates of deposit or
direct or guaranteed obligations of the United States.

12
<PAGE>

DIVIDEND POLICY

The Company has not declared or paid any cash dividends on the Common Stock.
The Company currently intends to retain its earnings to finance the
development and expansion of its business. The decision whether to apply
legally available funds to the payment of dividends on the Common Stock will
be made by the Board from time to time in its discretion, taking into account,
among other things, the Company's results of operations, financial condition,
capital requirements, contractual restrictions, any then existing or proposed
commitments for the use of available funds by the Company, the Company's
obligations with respect to any then outstanding class or series of its
preferred stock and other factors deemed relevant by the Board. The Company
does not anticipate paying any cash dividends on its Common Stock at any time
in the foreseeable future.

At the present time, dividend payments to the Company by its principal
operating subsidiary, Coinmach, are subject to restrictions contained in
certain of Coinmach's outstanding debt and financing agreements. Additionally,
the Company may in the future enter into other agreements or issue debt
securities or preferred stock that restrict the payment of cash dividends. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operation--Liquidity and Capital Resources" and "Description of Capital
Stock--Payment of Dividends on the Common Stock."

13
<PAGE>

DILUTION

The net tangible book value (deficit) of the Company as of March 29, 1996
was approximately $(105.1) million, or $(16.68) per share of Common Stock (pro
forma for the Reclassification). See "Description of Capital Stock--The
Reclassification and Stock Split." Net tangible book value per share is equal
to the Company's total tangible assets less its total liabilities, divided by
the number of shares of Common Stock outstanding (pro forma for the
Reclassification as more fully described in "Description of Capital Stock--the
Reclassification and Stock Split"). After giving effect to the Offering, the
Reclassification, an approximate 23.0-to-1 stock split (the "Stock Split") and
the application of the estimated net proceeds therefrom (including the
redemption of the Preferred Stock), at the initial public offering price of
$14.00 per share, the pro forma net tangible book value (deficit) of the
Company as of March 29, 1996 would have been approximately $(79.5) million, or
$(7.63) per share. This adjustment represents an immediate increase in net
tangible book value of $9.05 per share to the existing shareholders and an
immediate net tangible book value dilution of $21.63 per share to investors
purchasing shares of Common Stock in the Offering. The following table
illustrates this per share dilution:

<TABLE>
<S> <C> <C>
Assumed initial public offering price per share........... $14.00
Net tangible book value (deficit) per share at March 29,
1996................................................... $(16.68)
Increase in net tangible book value per share
attributable to new investors.......................... 9.05
-------
Pro forma net tangible book value (deficit) per share
after the Offering....................................... (7.63)
------
Dilution per share to new investors....................... $21.63
======
</TABLE>

The foregoing computations assume no exercise of the Underwriters' over-
allotment option.

The following table summarizes, based on the assumptions set forth herein,
as of March 29, 1996, the number of shares of Preferred Stock, Common Stock
and Non-Voting Common Stock purchased from the Company, the total
consideration paid and the average price per share paid by the existing
stockholders and by new stockholders purchasing shares in the Offering.

<TABLE>
<CAPTION>
SHARES PURCHASED TOTAL CONSIDERATION AVERAGE
------------------ ------------------- PRICE PER
NUMBER PERCENT AMOUNT PERCENT SHARE
---------- ------- ----------- ------- ---------
<S> <C> <C> <C> <C> <C>
Existing stockholders......... 6,301,174 60.5% $18,835,836 24.6% $2.99
New investors(1).............. 4,120,000 39.5% 57,680,000 75.4% 14.00
---------- ----- ----------- -----
Total........................ 10,421,174 100.0% $76,515,836 100.0%
========== ===== =========== =====
</TABLE>

The computations in the tables set forth above exclude (i) an aggregate of
147,122 shares of Common Stock issuable upon exercise of that portion of the
non-qualified stock options granted by the Company to MCS Capital, Inc., an
entity beneficially owned by Stephen R. Kerrigan (the "MCS Capital Options"),
and to Robert M. Doyle, Michael E. Stanky, John E. Denson, David Siegel, A.
Daniel Osborne, James N. Chapman and certain other individuals (the
"Additional Options"), in each case, which are vested and currently
exercisable, (ii) 588,490 shares of Common Stock reserved for issuance upon
exercise of the portion of the MCS Capital Options and the Additional Options,
in each case, which are not currently vested, and (iii) 1,103,419 shares of
Common Stock reserved for issuance under the 1996 Stock Option Plan, none of
which shares will be outstanding upon completion of the Offering. To the
extent any of the foregoing options excluded from the computations above are
exercised in the future, there will be further dilution to the purchasers of
Common Stock in the Offering. See "Management--1996 Stock Option Plan--
Additional Management Options"
- --------
(1) Excludes additional shares of Common Stock that may be sold pursuant to
the Underwriters' over-allotment option.

14
<PAGE>

CAPITALIZATION

The following table sets forth the capitalization of the Company as of March
29, 1996 on (i) an actual basis, after giving effect to the Reclassification
and the Stock Split and (ii) as adjusted, to give effect to (a) the sale by
the Company of 4,120,000 shares of Common Stock in the Offering, at the
initial public offering price of $14.00 per share, and (b) the application of
the net proceeds therefrom. This table should be read in conjunction with the
unaudited pro forma financial data and the combined and consolidated financial
statements of the Company and notes thereto included elsewhere in this
Prospectus.

<TABLE>
<CAPTION>
MARCH 29, 1996
-------------------------
AS ADJUSTED FOR
ACTUAL THE OFFERING
-------- ---------------
($ IN THOUSANDS)
<S> <C> <C>
Short-term debt, including
current maturities of
long-term debt(1)......... $ -- $ --
======== ========
Long-term debt:
11 3/4% Senior Notes due
2005..................... $196,655 $196,655
Revolving Credit
Facility(2).............. -- --
12 3/4% Senior Notes due
2001..................... 5,000 5,000
Other long-term debt...... 1,110 1,110
-------- --------
Total long-term debt.... 202,765 202,765
Stockholders' equity (defi-
cit):
Preferred Stock, $.01 par
value: 1,000,000 shares
authorized and no shares
issued and outstanding
actual; 1,000,000 shares
authorized and no shares
issued and outstanding as
adjusted................. -- -- (3)
Common Stock, $.01 par
value: 15,000,000 shares
authorized and 5,713,182
shares issued and
outstanding actual;
15,000,000 shares
authorized and 9,940,526
shares issued and
outstanding as adjusted(4).. 57 99
Non-Voting Common Stock,
$.01 par value: 1,000,000
shares authorized and
480,648 shares issued and
outstanding actual;
1,000,000 shares
authorized and 480,648
shares issued and
outstanding as
adjusted(5).............. 5 5
Additional paid-in
capital.................. 17,841 51,748
Accumulated deficit....... (18,719) (19,664)
Less Management Loans..... (492) (445)
-------- --------
Total stockholders'
equity (deficit)....... (1,308) 31,743
-------- --------
Total capitalization....... $201,457 $234,508
======== ========
</TABLE>
- --------
(1) See Note 5 to the Company's Combined Consolidated Financial Statements
included elsewhere in this Prospectus.

(2) At March 29, 1996, on a pro forma basis after giving effect to the
Offering and the application of the net proceeds therefrom, the Company
would have had $35.0 million of unused borrowing capacity under the
Revolving Credit Facility. See "Management's Discussion and Analysis of
Financial and Condition and Results of Operations--Liquidity and Capital
Resources."

(3) The Preferred Stock was issued by the Company to certain holders of
certain classes of the Company's common stock in connection with the
Reclassification. Approximately $19.1 million of the estimated net
proceeds to the Company from the Offering will be used to redeem the
Preferred Stock. See "Use of Proceeds", "Description of Capital Stock--
Preferred Stock" and "Description of Capital Stock--The Reclassification
and Stock Split."

(4) As of March 29, 1996, excludes (i) an aggregate of 735,612 shares of
Common Stock issuable upon exercise of the MCS Capital Options and the
Additional Options after the Offering, of which 147,122 shares of Common
Stock will be issuable with respect to the options that are exercisable
immediately after the Offering and (ii) excludes up to 1,103,419 shares of
Common Stock issuable upon exercise of options granted or to be granted
pursuant to the 1996 Stock Option Plan. See "Management--1996 Stock Option
Plan;--Additional Management Options."

(5) Shares of Non-Voting Common Stock are not being sold in the Offering. See
"Description of Capital Stock."

15
<PAGE>

UNAUDITED PRO FORMA FINANCIAL DATA

The following unaudited pro forma balance sheet as of March 29, 1996 gives
effect to the Allied Acquisition, the Offering and the application of the
proceeds therefrom as if such transactions occurred as of March 29, 1996. The
unaudited pro forma combined statement of operations of the Company for the
year ended March 29, 1996, gives effect to the Offering and the application of
the proceeds therefrom as if such transactions occurred on April 5, 1995. For
information regarding the Offering, see "Use of Proceeds."

The pro forma adjustments are based upon currently available information as
well as upon certain assumptions that management believes are reasonable. The
Allied Acquisition was accounted for as a purchase with assets recorded at
their estimated fair market value. Management believes that actual fair market
value adjustments, if any, will not differ materially from the preliminary
allocation of the purchase price contained in the pro forma adjustments
reflected in the pro forma financial information.

The unaudited pro forma combined financial statements are not necessarily
indicative of either future results of operations or results that might have
been achieved if the foregoing transactions had been consummated as of the
indicated dates. The unaudited pro forma combined financial statements should
be read in conjunction with the historical consolidated financial statements
of the Company, Solon and TCC (or their respective predecessors), together
with the related notes thereto, presented elsewhere in this Prospectus.

16
<PAGE>

UNAUDITED PRO FORMA COMBINED BALANCE SHEET

MARCH 29, 1996
(IN THOUSANDS)

<TABLE>
<CAPTION>
PRO FORMA ADJUSTMENTS
--------------------------
HISTORICAL
BASIS OF
ASSETS OF
COMPANY BUSINESSES PURCHASE PRO FORMA
HISTORICAL ACQUIRED ACCOUNTING OTHER COMBINED
---------- ---------- ------------- ---------- ---------
<S> <C> <C> <C> <C> <C>
ASSETS:
Cash and cash
equivalents............ $ 19,858 $ -- $ (15,600)(a) $ 52,142 (e) $ 37,267
(19,133)(f)
Receivables, net........ 5,758 5,758
Inventories and
prepayments............ 7,084 7,084
Advance payments to
location owners........ 20,320 20,320
Property and equipment,
net.................... 82,699 8,000 200 (a) 90,899
Contract rights, net.... 59,745 7,400 (a) 67,145
Goodwill, net........... 44,071 44,071
Other assets............ 9,613 625 (a) 10,238
-------- ------ ---------- ---------- --------
Total assets........... $249,148 $8,000 $ (7,375) $ 33,009 $282,782
======== ====== ========== ========== ========
LIABILITIES AND
STOCKHOLDERS' EQUITY
(DEFICIT):
LIABILITIES
Accounts payable and
accrued liabilities.... $ 28,767 $ -- $ 625 (a) $ -- $ 29,392
12 3/4% Senior Notes due
2001................... 5,000 5,000
11 3/4% Senior Notes due
2005................... 196,655 196,655
Other long-term debt.... 1,110 1,110
Deferred income taxes... 18,924 (42)(g) 18,882
-------- ------ ---------- ---------- --------
Total liabilities...... 250,456 625 (42) 251,039
-------- ------ ---------- ---------- --------
STOCKHOLDERS' EQUITY
(DEFICIT)
Common stock and capital
in excess of par
value.................. 17,903 940 (b) 51,852
(19,133)(c)
396 (d)
(396)(d)
52,142 (e)
Preferred Stock......... -- 19,133 (c) --
(19,133)(f)
Net equity of acquired
businesses............. -- 8,000 (8,000)(a) --
Accumulated deficit..... (18,719) (884)(b) (19,664)
(61)(g)
-------- ------ ---------- ---------- --------
(816) 8,000 (8,000) 33,004 32,188
Loans to management..... (492) (56)(b) (445)
103 (g)
-------- ------ ---------- ---------- --------
Total stockholders'
equity (deficit)...... (1,308) 8,000 (8,000) 33,051 31,743
-------- ------ ---------- ---------- --------
Total liabilities and
stockholders' equity
(deficit)............. $249,148 $8,000 $ (7,375) $ 33,009 $282,782
======== ====== ========== ========== ========
</TABLE>

See "Notes to Unaudited Pro Forma Combined Balance Sheet."

17
<PAGE>

NOTES TO UNAUDITED PRO FORMA COMBINED BALANCE SHEET
(IN THOUSANDS)

(a) Reflects allocation of purchase prices aggregating $15,600 for route
acquisitions on April 1 and April 9, 1996. The acquisitions were accounted
for as purchases. Preliminary purchase price allocations to property and
equipment and contract rights are based on fair value using a methodology
consistent with the acquisitions of Solon and Coinmach. Property and
equipment of $8,200 will be depreciated over useful lives of 3 to 8 years
and contract rights will be amortized over 15 years. Management believes
that actual fair market value adjustments, if any, will not differ
materially from such preliminary purchase price allocations. Additionally,
the Company entered into a covenant not to compete payable in annual
installments over five years.

(b) Reflects Common Stock purchases by certain management personnel subsequent
to March 29, 1996 and related loans. The difference between the estimated
fair value of the stock (which management believes to be 85% of the
initial offering price in the Offering) and the amount paid for such stock
is accounted for as compensation expense.

(c) Reflects issuance of Preferred Stock at its current redemption value in
connection with the Reclassification. See "Description of Capital Stock--
The Reclassification and Stock Split." The transaction is accounted for as
a charge against paid-in-capital.

(d) Reflects the issuance of 28,315 shares of Common Stock to holders of
Preferred Shares in connection with the Reclassification. See "Prospectus
Summary--The Reclassification" and '"Description of Capital Stock--The
Reclassification and Stock Split."

(e) Reflects as set forth in the following table the Offering and the
application of the proceeds.

<TABLE>
<S> <C> <C>
Gross proceeds from issuance of 4,120,000 shares of Common
Stock at the initial public offering price of $14.00 per
share....................................................... $57,680
Deduct transaction fees and expenses:
Transaction fees........................................... $4,038
Expenses................................................... 1,000
GTCR termination fee....................................... 500 5,538
------ -------
Net cash to the Company...................................... $52,142
=======
</TABLE>

(f) Reflects retirement of Preferred Stock at its current redemption value in
connection with the Offering. See "Description of Capital Stock--The
Reclassification and Stock Split."

(g) Reflects forgiveness of principal amounts due in fiscal year 1997 on loans
to management of $103, which is accounted for as compensation expense,
less income tax benefits of $42.

18
<PAGE>

UNAUDITED PRO FORMA COMBINED STATEMENTS OF OPERATIONS

YEAR ENDED MARCH 29, 1996
(IN THOUSANDS; EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
COMPANY HISTORICAL PRO FORMA ADJUSTMENTS
----------------------------- ----------------------------
APRIL 5, 1995 SIX MONTHS
TO ENDED ACQUIRED PURCHASE PRO FORMA
SEPT. 29, 1995 MARCH 29, 1996 BUSINESSES (A) ACCOUNTING OTHER COMBINED
-------------- -------------- -------------- ------------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
Revenues................ $89,719 $89,070 $10,568 $ -- $ -- $189,357
Laundry operating
expenses............... 62,905 60,536 7,800 (850)(f) 129,891
(500)(g)
General and
administrative
expenses............... 2,351 1,844 -- (1,000)(f) 3,298
103 (h)
Restructuring costs..... 2,200 -- -- (2,200)(i) --
Depreciation............ 9,498 9,392 1,508 (420)(b) 19,978
Amortization............ 8,925 8,820 493 (c) 18,363
-- 125 (d)
------- ------- ------- --------- ----------- --------
Operating Income........ 3,840 8,478 1,260 (198) 4,447 17,827
Interest expense........ 11,818 11,999 517 473 (j) 24,807
------- ------- ------- --------- ----------- --------
(Loss) income before
income taxes and
extraordinary item..... (7,978) (3,521) 743 (198) 3,974 (6,980)
------- ------- ------- --------- ----------- --------
Provision for income
taxes:
Currently payable...... 420 50 363 (81)(e) -- 752
Deferred............... (2,282) (1,048) (73) 1,629 (k) (1,774)
------- ------- ------- --------- ----------- --------
(1,862) (998) 290 (81) 1,629 (1,022)
------- ------- ------- --------- ----------- --------
(Loss) income before
extraordinary item..... $(6,116) $(2,523) $ 453 $ (117) $ 2,345 $ (5,958)
======= ======= ======= ========= =========== ========
(Loss) per share before
extraordinary item(l).. $ (0.79) $ (0.32) $ (0.57)
======= ======= ========
</TABLE>

See "Notes to Unaudited Pro Forma Combined Statements of Operations."

19
<PAGE>

NOTES TO UNAUDITED PRO FORMA

COMBINED STATEMENTS OF OPERATIONS
(IN THOUSANDS)

(a) Represents historical operating results for the year ended December 31,
1995 of businesses acquired on April 1 and April 9, 1996.

(b) Represents the difference in historical depreciation of businesses
acquired of $1,508 and the depreciation of $1,088 on purchase price
allocated to property and equipment by the Company with useful lives of 3
to 8 years.

(d) Represents amortization of covenant not to compete which has a term of 5
years.

(e) Reflects income tax impact of purchase accounting adjustments.

(f) On September 29, 1995, management implemented cost savings programs
affecting corporate financial and administrative functions and regional
operations which amounted to $2,000 and $1,700, respectively, on an annual
basis. The development of cost savings programs was a direct result of the
plan to combine the two companies pursuant to the Merger that was
consummated on November 30, 1995. The $2,000 cost savings arise
principally as personnel cost savings resulting from the closing of
Solon's corporate office in Philadelphia, Pennsylvania and relocation to
Roslyn, New York. The $1,700 cost savings are personnel cost savings
resulting from reduction and consolidation of regional operations. One
half of the cost savings were recognized during the six months ended March
29, 1996.

(g) Reflects cost savings of $500 for the businesses acquired which resulted
from consolidation of administrative functions in Roslyn, New York
consisting primarily of personnel cost savings.

(h) Reflects forgiveness of principal amount due in 1996 on loans to
management.

(i) Reflects the exclusion of restructuring costs of $2,200.

(j) The following table presents a reconciliation of pro forma interest
expense:

<TABLE>
<CAPTION>
YEAR ENDED
MARCH 29, 1996
--------------
<S> <C>
Historical interest expense.................................. $ 24,334
--------
Add:
Interest on 11 3/4% Senior Notes due 2005................... 23,107
Amortization of deferred financing costs on new debt:
11 3/4% Senior Notes due 2005............................. 479
Revolving Credit Facility................................. 26
Deduct:
Interest on retired 12 3/4% Senior Notes due 2001 and 13
3/4% Senior Subordinated Debentures due 2002............... (10,742)
Interest on Solon revolving credit facility................. (126)
Interest on TCC revolving credit facility................... (3,121)
Interest on 11 3/4% Senior Notes due 2005 from November 30,
1995 to March 29, 1996..................................... (7,529)
Interest of acquired business............................... (517)
Amortization of deferred financing costs on retired debt:
12 3/4% Senior Notes due 2001 and 13 3/4% Senior
Subordinated Debentures due 2002......................... (409)
Original issue discount on 13 3/4% Senior Subordinated
Debentures due 2002...................................... (125)
Solon revolving credit facility........................... (28)
TCC revolving credit facility............................. (383)
Amortization of deferred financing costs on new debt from
November 30, 1995 to March 29, 1996........................ (159)
--------
Pro forma adjustment......................................... 473
--------
Pro forma interest expense................................... $ 24,807
========
</TABLE>

(k) Represents income tax impact of on other pro forma adjustments.

(l) The number of shares used in the calculation of loss per share before
extraordinary item includes (i) the number of shares of Common Stock which
have to be sold at the initial public offering price to pay to non-
management holders of Preferred Shares their Unpaid Yield and Preferred
Investment of approximately $19.1 million and (ii) the 28,315 shares of
Common Stock to be issued to management holders of Preferred Shares in
respect of their Unpaid Yield and Preferred Investment.

20
<PAGE>

SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA

The following tables present summary historical consolidated financial
information of the Company and its subsidiaries. Such tables include the
combined consolidated financial information of the Company for the six month
period ended September 29, 1995 and the six months ended March 29, 1996,
giving effect to the Solon Acquisition, the Coinmach Acquisition, the Merger
and the Refinancing. Also included in such tables is summary historical
consolidated financial information of (i) TCC and its predecessor, including
the two month period ended March 31, 1995, the one month period ended January
31, 1995, and fiscal years ended December 31, 1994, 1993, 1992 and 1991 and
(ii) Solon, including the six month period from October 1, 1994 to April 4,
1995, and fiscal years ended September 30, 1994, 1993, 1992 and 1991. The
financial data set forth below should be read in conjunction with each of
TCC's, Solon's and the Company's audited historical consolidated financial
statements and the related notes thereto presented elsewhere in this
Prospectus and with "Management's Discussion and Analysis of Financial
Condition and Results of Operations."

<TABLE>
<CAPTION>
THE COMPANY(1)
(IN THOUSANDS, EXCEPT RATIOS)
------------------------------------------------
SIX MONTHS SIX MONTHS TWELVE MONTHS
ENDED ENDED ENDED
SEPTEMBER 29, 1995 MARCH 29, 1996 MARCH 29, 1996
------------------ -------------- --------------
<S> <C> <C> <C>
OPERATING DATA:
Revenues..................... $ 89,719 $ 89,070 $178,789
Laundry operating expenses... 62,905 60,536 123,441
General and administrative
expenses.................... 2,351 1,844 4,195
Depreciation and
amortization................ 18,423 18,212 36,635
Restructuring costs.......... 2,200 -- 2,200
-------- -------- --------
Operating income............. 3,840 8,478 12,318
Interest expense............. 11,818 11,999 23,817
Income taxes (benefits)...... (1,862) (998) (2,860)
-------- -------- --------
Loss before extraordinary
item........................ (6,116) (2,523) (8,639)
Extraordinary loss (net of
taxes)(2)................... -- 8,925 8,925
-------- -------- --------
Net loss..................... $ (6,116) $(11,448) $(17,564)
======== ======== ========
Net loss per share........... $ (0.79) $ (1.47) $ (2.26)
BALANCE SHEET DATA (AT END OF
PERIOD):
Property and equipment, net.. $ 80,706 $ 82,699
Total assets................. 241,433 249,148
Total debt................... 176,415 202,765
Stockholders' equity
(deficit)................... 10,140 (1,308)
FINANCIAL RATIOS AND OTHER
DATA (UNAUDITED):
Cash flow from operating
activities.................. $ 12,066 $ 12,337 $ 24,403
Cash used for investing
activities.................. (25,039) (14,162) (39,201)
Cash from financing
activities.................. 12,510 11,372 23,882
EBITDA(3).................... 22,263 26,690 48,953
EBITDA margin(4)............. 24.8% 30.0% 27.4%
Operating margin(5).......... 4.3% 9.5% 6.9%
Capital expenditures(6)...... 13,119 14,219 27,338
</TABLE>
- --------
(1) Historical financial data for each of TCC (and its predecessors) and Solon
(for periods prior to April 5, 1995), in each case the predecessors of
Coinmach Laundry Corporation, are contained in the Selected Historical
Financial Data and the financial statements and related notes thereto
presented elsewhere in this Prospectus.
(2) Extraordinary loss on the early extinguishment of debt on November 30,
1995. Extraordinary loss is $1.18 per share.
(3) EBITDA represents earnings from continuing operations before deductions
for interest, income taxes, depreciation and amortization. Management
believes that EBITDA is widely used in the industry as a measure of a
company's operating performance. Additionally, management believes that
EBITDA is an indicator of the Company's ability to service debt, potential
future increases in debt and capital requirements. However, EBITDA is not
intended to represent cash flows for the period, nor has it been presented
as an alternative to either (i) operating income (as determined by GAAP)
as an indicator of operating performance or (ii) cash flows from
operating, investing and financing activities (as determined by GAAP) as a
measure of liquidity. Given that EBITDA is not a measurement determined in
accordance with GAAP and is thus susceptible to varying calculations,
EBITDA as presented may not be comparable to other similarly titled
measures of other companies. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations."
(4) EBITDA margin represents EBITDA as a percentage of revenues. Management
believes that EBITDA margin is a useful measure to evaluate the Company's
performance over various sales levels. EBITDA margin should not be
considered as an alternative for measurements determined in accordance
with GAAP.
(5) Operating margin represents operating income as a percentage of revenues.
(6) Capital expenditures include additions to property and equipment and
advance rental payments to location owners.

21
<PAGE>

The TCC fiscal year end was March 31. TCC's predecessor had a fiscal year
end of December 31, thus creating a three-month transition period. On January
31, 1995, TCC was formed by certain of the Company's current owners, and
accordingly, periods prior to and after January 31, 1995 are reflected in
their financial statements as predecessor and successor periods, respectively.

<TABLE>
<CAPTION>
THE COINMACH CORPORATION ("TCC")
----------------------------------------------------------------
PREDECESSOR(1) SUCCESSOR(1)
(IN THOUSANDS)
--------------------------------------------------- ------------
ONE MONTH TWO MONTHS
YEARS ENDED DECEMBER 31, ENDED ENDED
-------------------------------------- JANUARY 31, MARCH 31,
1991 1992 1993 1994 1995 1995
-------- -------- -------- -------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
OPERATING DATA:
Revenues................ $ 71,595 $ 72,172 $ 71,859 $ 73,857 $ 5,879 $11,515
Laundry operating
expenses............... 53,289 53,163 52,805 54,737 4,229 8,951
General and
administrative
expenses............... 6,483 5,712 5,570 4,938 450 799
Depreciation and
amortization........... 15,463 16,755 15,256 14,504 980 2,144
-------- -------- -------- -------- -------- -------
Operating income
(loss)................. (3,640) (3,458) (1,772) (322) 220 (379)
Interest expense........ 9,990 9,573 10,509 4,012 395 774
Other expense (income).. (611) -- -- 1,341 -- --
Income taxes............ 12 (4) 17 27 -- 2
-------- -------- -------- -------- -------- -------
Loss before
extraordinary gain..... (13,031) (13,027) (12,298) (5,702) (175) (1,155)
Extraordinary gain(2)... -- -- -- 20,420 -- --
-------- -------- -------- -------- -------- -------
Net income (loss)....... $(13,031) $(13,027) $(12,298) $ 14,718 $ (175) $(1,155)
======== ======== ======== ======== ======== =======
BALANCE SHEET DATA (AT
END OF PERIOD):
Property and equipment,
net.................... $ 21,045 $ 19,030 $ 17,293 $ 16,285 $ 16,120 $24,330
Total assets............ 61,933 52,114 47,443 36,924 36,069 61,035
Total debt.............. 77,945 76,409 75,827 42,184 41,800 42,351
Stockholders' equity
(deficit).............. (39,398) (53,995) (68,003) (13,416) (13,591) 9,729
FINANCIAL RATIOS AND
OTHER DATA (UNAUDITED):
Cash flow from operating
activities............. $ 7,221 $ 7,613 $ 7,736 $ 8,724 $ 1,197 $ 73
Cash used for investing
activities............. (6,187) (5,124) (6,119) (6,577) (611) (990)
Cash from (used for)
financing activities... (1,405) (1,945) (1,405) (2,547) (411) (327)
EBITDA(3)............... 11,823 13,297 13,484 14,182 1,200 1,765
Capital expenditures.... 5,632 4,884 5,879 6,571 576 990
</TABLE>
- --------
(1) The term "Predecessor" refers to the period in time prior to the Coinmach
Acquisition and consists of CIC and TCC. The term "Successor" refers to
the period in time after the Coinmach Acquisition. Successor is presented
on a different basis of accounting and therefore, is not comparable to the
Predecessor. The Successor period reflects the effects of purchase
accounting, whereby assets and liabilities were adjusted to their
estimated fair values at the date of the Coinmach Acquisition.

(2) Extraordinary gain on the early extinguishment of debt in 1994.

(3) EBITDA represents earnings from continuing operations before deductions
for interest, income taxes, depreciation and amortization. Management
believes that EBITDA is widely used in the industry as a measure of a
company's operating performance. Additionally, management believes that
EBITDA is an indicator of the Company's ability to service existing debt,
potential future increases in debt and capital requirements. However,
EBITDA is not intended to represent cash flows for the period, nor has it
been presented as an alternative to either (i) operating income (as
determined by GAAP) as an indicator of operating performance or (ii) cash
flows from operating, investing and financing activities (as determined by
GAAP) as a measure of liquidity. Given that EBITDA is not a measurement
determined in accordance with GAAP and is thus susceptible to varying
calculations, EBITDA as presented may not be comparable to other similarly
titled measures of other companies. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations."

22
<PAGE>

The fiscal year end of Solon was the Friday closest to September 30. On April
5, 1995, the voting stock of Solon was acquired by the Company, and
accordingly, periods prior to and after April 5, 1995 are reflected as
predecessor and successor periods, respectively, in their financial statements.

<TABLE>
<CAPTION>
SOLON(1)
--------------------------------------------------
PREDECESSOR(2)
--------------------------------------------------
(IN THOUSANDS)
OCTOBER 1,
YEARS ENDED SEPTEMBER 30, 1994 TO
-------------------------------------- APRIL 4,
1991 1992(3) 1993 1994 1995
-------- -------- -------- -------- ----------
<S> <C> <C> <C> <C> <C>
OPERATING DATA:
Revenues.................... $105,268 $104,311 $104,888 $104,553 $52,207
Laundry operating expenses.. 67,665 67,138 67,420 66,418 33,165
General and administrative
expenses................... 2,773 3,125 2,576 2,839 1,539
Depreciation and
amortization............... 18,878 20,745 21,002 21,347 10,304
Restructuring costs......... -- -- -- -- --
-------- -------- -------- -------- -------
Operating income............ 15,952 13,303 13,890 13,949 7,199
Interest expense............ 15,888 15,857 17,453 18,105 8,928
-------- -------- -------- -------- -------
Income (loss) before income
taxes and extraordinary
item....................... 64 (2,554) (3,563) (4,156) (1,729)
-------- -------- -------- -------- -------
Provision (benefit) for
income tax:
Currently payable.......... 100 200 400 200 270
Deferred................... 2,412 (616) (1,168) 2,562 (220)
-------- -------- -------- -------- -------
2,512 (416) (768) 2,762 50
-------- -------- -------- -------- -------
Loss before extraordinary
item....................... (2,448) (2,138) (2,795) (6,918) (1,779)
Extraordinary item (net of
tax)(4).................... -- (833) -- -- (848)
-------- -------- -------- -------- -------
Net loss.................... $ (2,448) $ (2,971) $ (2,795) $ (6,918) $(2,627)
======== ======== ======== ======== =======
BALANCE SHEET DATA (AT END
OF PERIOD):
Property and equipment,
net........................ $ 52,123 $ 50,679 $ 50,593 $ 48,727 --
Total assets................ 147,972 155,827 150,402 143,589 --
Total debt.................. 118,315 128,737 128,299 128,487 --
Stockholders' equity
(deficit).................. 2,022 1,004 (1,636) (8,721) --
FINANCIAL RATIOS AND OTHER
DATA (UNAUDITED):
Cash flow from operating
activities................. $ 16,814 $ 11,842 $ 16,547 $ 17,914 $10,216
Cash used for investing
activities................. (7,946) (16,168) (18,500) (16,763) (6,537)
Cash from (used for)
financing activities....... (9,691) 10,272 (636) (270) (1,068)
EBITDA(5)................... 34,830 34,048 34,892 35,296 17,503
Capital expenditures(6)..... 15,919 16,563 18,556 16,779 6,944
</TABLE>
- --------
(1) Certain amounts have been reclassified to conform the presentation above
with TCC.

(2) The term "Predecessor" refers to the period in time prior to the Solon
Acquisition.

(3) Fiscal year 1992 was a 53-week year. All other fiscal years were 52-week
years.

(4) Extraordinary loss on early extinguishment of debt in 1992 and change of
control in the Solon Acquisition on April 5, 1995.

(5) EBITDA represents earnings from continuing operations before deductions for
interest, income taxes, depreciation and amortization. Management believes
that EBITDA is widely used in the industry as a measure of a company's
operating performance. Additionally, management believes that EBITDA is an
indicator of the Company's ability to service existing debt, potential
future increases in debt and capital requirements. However, EBITDA is not
intended to represent cash flows for the period, nor has it been presented
as an alternative to either (i) operating income (as determined by GAAP) as
an indicator of operating performance or (ii) cash flows from operating,
investing and financing activities (as determined by GAAP) as a measure of
liquidity. Given that EBITDA is not a measurement determined in accordance
with GAAP and is thus susceptible to varying calculations, EBITDA as
presented may not be comparable to other similarly titled measures of other
companies. See "Management's Discussion and Analysis of Financial Condition
and Results of Operations."

(6) Capital expenditures include additions to property and equipment and
advance rental payments to location owners.

23
<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

GENERAL

The Company is principally engaged in the business of supplying coin-
operated laundry equipment services for multi-family properties in 28 states
and the District of Columbia with locations throughout the Northeast, Mid-
Atlantic, Southeast, South-Central and Mid-West regions of the United States.

The Company's most significant revenue source is derived from its routes,
which are comprised of over 245,000 coin-operated washing machines and dryers.
The Company provides coin-operated laundry equipment services to locations by
leasing designated laundry rooms in buildings, typically on a long-term,
renewable basis. In return for the exclusive right to provide laundry
equipment services, most of the Company's leases provide for commission
payments to the location owners. Commission expense (also referred to as rent
expense), the largest single expense item, is included in laundry operating
expenses and represents the payments to location owners. Commissions may be
fixed amounts or a percentage of revenues and are generally paid monthly. Also
included in laundry operating expenses are the cost of sales associated with
Super Laundry Equipment Corp. ("Super Laundry"), a wholly-owned subsidiary of
Coinmach and the cost of servicing and collections in the route business,
including payroll, parts, vehicles and other related items.

In addition to commission payments to location owners, many of the Company's
leases require the Company to make advance rental payments or bonuses to the
location owners. These advance payments or bonuses are capitalized and
amortized over the life of the lease.

On January 31, 1995, in connection with the acquisition of Coinmach
Industries and Super Laundry Equipment Co., L.P., certain asset values,
primarily contract rights and fixed assets, were recorded at their then fair
market value, adjusted to reflect a pro rata allocation of the excess of fair
value of net assets acquired, based on an independent appraisal, over the
purchase price.

On November 30, 1995, TCC merged with Solon through an exchange of stock,
whereupon the surviving corporation, changed its name to Coinmach Corporation.
Both Solon and TCC were under common ownership commencing April 5, 1995. The
Merger was accounted for in a manner similar to a pooling of interests.

In connection with the Refinancing, the Company issued a total of
approximately $196.7 million of Senior Notes which enabled the Company to,
among other things, extend the maturity of its debt obligations, retire the
remaining debt of TCC and provide additional working capital. On November 30,
1995, the Company also entered into the Revolving Credit Facility, which
provides for borrowings of up to a maximum of $35 million.

RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with the
condensed consolidated financial statements and related notes thereto included
elsewhere in this Prospectus.

24
<PAGE>

Coinmach Laundry Corporation

SIX MONTHS ENDED MARCH 29, 1996 COMPARED TO SIX MONTHS ENDED MARCH 31, 1995

This discussion below should be read in conjunction with the following table
which combines the predecessor period for the six months ended March 31, 1995
(in thousands):

<TABLE>
<CAPTION>
SIX MONTHS ENDED SIX MONTHS ENDED
MARCH 29, 1996 MARCH 31, 1995
---------------- --------------------------
(SUCCESSOR)(1) (PREDECESSOR)(1),(2)
TCC SOLON COMBINED
------- ------- --------
<S> <C> <C> <C> <C>
Revenues.......................... $ 89,070 $35,789 $52,207 $87,996
Laundry operating expenses........ 60,536 28,253 33,165 61,418
General and administrative
expenses......................... 1,844 1,345 1,539 2,884
Depreciation and amortization..... 18,212 6,009 10,304 16,313
-------- ------- ------- -------
Operating income (loss)........... 8,478 182 7,199 7,381
Interest expense, net............. 11,999 2,464 8,928 11,392
Other expense..................... -- 1,341 -- 1,341
-------- ------- ------- -------
Loss before extraordinary item and
income taxes..................... (3,521) (3,623) (1,729) (5,352)
Income tax (benefit) expense...... (998) 4 50 54
-------- ------- ------- -------
Loss before extraordinary item.... (2,523) (3,627) (1,779) (5,406)
Extraordinary item, net of tax.... (8,925) -- (848) (848)
-------- ------- ------- -------
Net loss.......................... $(11,448) $(3,627) $(2,627) $(6,254)
======== ======= ======= =======
</TABLE>
- --------
(1) The term "Predecessor" refers to the period in time prior to the Solon
Acquisition. The term "Successor" refers to the period in time after the
Solon Acquisition and includes the historical results of Solon which have
been restated to include the pooling of interests of TCC. Successor is
presented on a different basis of accounting and therefore, is not
comparable to the Predecessor.

(2) Certain reclassifications have been made to conform to the 1996
presentation.

Revenues of approximately $89.1 million for the six months ended March 29,
1996 were approximately $1.1 million, or 1.2% higher than combined revenues
for the prior year's corresponding period. The improvement in revenues
consisted primarily of increased revenues from Super Laundry of approximately
$2.5 million. Such improvement was partially offset by a decrease of
approximately $1.4 million in revenues from routes. The average machine base
for the six months ended March 29, 1996 was approximately 1.4% lower than the
average machine base during the six months ended March 31, 1995. The decrease
in the machine base was primarily the result of constraints on available
capital prior to the Merger. From September 30, 1995, through March 29, 1996,
the Company successfully implemented a program to maintain its base of
installed machines and eliminate any additional erosion. The effect of the
decreased number of machines was partially offset by increased revenue per
machine from price increases.

Laundry operating expenses decreased by approximately $0.9 million, or 1.4%,
to approximately $60.5 million. The decrease is primarily the result of
decreased expenses of approximately $0.8 million related to implementation of
cost savings programs in the Company's field operations and a decrease in
commission expense of approximately 2.3%. These decreases were partially
offset by an increase in the cost of sales related to the increased volume of
Super Laundry.

General and administrative expenses decreased by approximately $1.0 million,
or 36.1%, to approximately $1.8 million, primarily due to the consolidation of
corporate staff by closing Solon's Philadelphia, Pennsylvania office and
combining its operations into the Company's existing facility in Roslyn, New
York on September 29, 1995.

Depreciation and amortization increased by approximately $1.9 million or
11.6% due primarily to purchase accounting adjustments resulting from the
Solon Acquisition.

25
<PAGE>

Interest expense increased by approximately $0.6 million or 5.3% to
approximately $12.0 million. Approximately $1.8 million of such increase was
due primarily to the increased debt level that resulted from the Refinancing
on November 30, 1995 and December 14, 1995. Offsetting this increase is
approximately $0.8 million of decrease in interest expense due to the decrease
in the effective interest rate as the result of the Refinancing. The increased
debt resulted in an excess cash balance of approximately $12.3 million, which
excess is contemplated to be used for working capital purposes and for future
acquisition opportunities.

CIC recorded a non-cash charge of $1.3 million in 1994 relating to the
imputed value of an equity conversion feature related to management loans
pursuant to CIC's plan of reorganization. Such feature was surrendered in
connection with the Coinmach Acquisition.

The extraordinary item for the period ending March 29, 1996, consist of
costs related to the extinguishment of debt in connection with the
Refinancing. The extraordinary item for the six months ended March 31, 1995,
consist of costs related to the change in control in connection with the Solon
Acquisition.

EBITDA (earnings before deductions for interest, income taxes, depreciation
and amortization) is used by management and certain investors as an indicator
of a company's historical ability to service debt. Management believes an
increase in EBITDA is an indication of improved ability to service existing
debt, potential future increases in debt or capital requirements. However,
EBITDA is not intended to represent cash flows for the period, nor has it been
presented as an alternative to either (i) operating income (as determined by
GAAP) as an indicator of operating performance or (ii) cash flows from
operating, investing and financing activities (as determined by GAAP) as a
measure of liquidity. Given that EBITDA is not a measurement determined in
accordance with GAAP and is thus susceptible to varying calculations, EBITDA
as presented may not be comparable to other similarly titled measures of other
companies. EBITDA was approximately $26.7 million for the six months ended
March 29, 1996, compared to approximately $23.7 million for the corresponding
period in 1995.

The Company's effective income tax rate differs from the amount computed by
applying the U.S. federal statutory rate to loss before income taxes as a
result of state taxes and permanent book/tax differences (largely goodwill
amortization).

SIX MONTHS ENDED SEPTEMBER 29, 1995 COMPARED TO SIX MONTHS ENDED SEPTEMBER
30, 1994

The discussion below should be read in conjunction with the following table
which combines the Predecessor period for the six months ended September 30,
1994 (in thousands):

<TABLE>
<CAPTION>
SIX MONTHS ENDED SIX MONTHS ENDED
SEPTEMBER 29, 1995 SEPTEMBER 30, 1994
------------------ --------------------------
(SUCCESSOR)(1) (PREDECESSOR)(1),(2)
TCC SOLON COMBINED
------- ------- --------
<S> <C> <C> <C> <C>
Revenues........................ $89,719 $37,154 $51,577 $88,731
Laundry operating expenses...... 62,905 28,576 32,337 60,913
General and administrative
expenses....................... 2,351 1,123 1,444 2,567
Depreciation and amortization... 18,423 7,576 10,966 18,542
Restructuring costs............. 2,200 -- -- --
------- ------- ------- -------
Operating income (loss)......... 3,840 (121) 6,830 6,709
Interest expense, net........... 11,818 2,214 9,053 11,267
------- ------- ------- -------
Loss before income taxes........ (7,978) (2,335) (2,223) (4,558)
Income tax (benefit) expense.... (1,862) 24 3,208 3,232
------- ------- ------- -------
Net Loss........................ $(6,116) $(2,359) $(5,431) $(7,790)
======= ======= ======= =======
</TABLE>
- --------
(1) The term "Predecessor" refers to the period in time prior to the Solon
Acquisition. The term "Successor" refers to the period in time after the
Solon Acquisition and includes the historical results of Solon which have
been restated to include the pooling of interests of TCC. Successor is
presented on a different basis of accounting and therefore, is not
comparable to the Predecessor.

(2) Certain reclassifications have been made to conform to the 1995
presentation.

26
<PAGE>

Revenues of approximately $89.7 million for the six months ended September
29, 1995 were approximately $1.0 million, or 1.1% higher than combined
revenues for the prior year's corresponding period. The improvement in
revenues consisted primarily of increased revenues from Super Laundry of
approximately $1.3 million. Such improvement was partially offset by a
decrease of approximately $0.3 million in revenues from routes, primarily due
to a 2.0% decline in the average number of laundry machines on location, due
to constraints on capital prior to the Merger. The effect of the decreased
number of machines was partially offset by increased revenue per machine of
approximately 1.6% primarily due to price increases.

Laundry operating expenses increased by approximately $2.0 million, or 3.3%,
to $62.9 million. This increase is comprised of a $1.0 million increase in the
cost of sales related to the increase in Super Laundry revenue. The remaining
increase is primarily the result of the method of accounting for installation
costs applied in the Successor period. This increase is the result of
increased cost of sales related to the increased volume of Super Laundry. In
addition, the Company's commission expense decreased by approximately 1.0%.

General and administrative expenses decreased by approximately $0.2 million,
or 8.4% primarily due to a decrease in the corporate staff.

The Company provided for one-time restructuring costs of approximately $2.2
million to cover severance payments to certain of Solon's management,
administrative and regional personnel, costs to relocate Solon's financial and
administrative functions to Roslyn, New York, costs to integrate certain
financial and operating systems, and costs related to the consolidation of
certain of Solon's regional offices.

Interest expense increased by approximately $0.6 million or approximately
4.9%. This increase is primarily due to an increase in the interest rate on
TCC's revolver, which was based on prime rate.

EBITDA (earnings before deductions for interest, income taxes, depreciation
and amortization) is used by management and certain investors as an indicator
of a company's historical ability to service debt. Management believes an
increase in EBITDA is an indication of improved ability to service existing
debt, potential future increases in debt or capital requirements. However,
EBITDA is not intended to represent cash flows for the period, nor has it been
presented as an alternative to either (i) operating income (as determined by
GAAP) as an indicator of operating performance or (ii) cash flows from
operating, investing and financing activities (as determined by GAAP) as a
measure of liquidity. Given that EBITDA is not a measurement determined in
accordance with GAAP and is thus susceptible to varying calculations, EBITDA
as presented may not be comparable to other similarly titled measures of other
companies. EBITDA was approximately $24.5 million, before the deduction for
restructuring costs, for the six months ended September 29, 1995, compared to
approximately $25.3 million for the corresponding period in 1994. The 1995
results include periods prior to the Merger, the closing of the corporate
office and the field reorganization.

TCC (and CIC, its Predecessor)

THREE MONTHS ENDED MARCH 31, 1995 COMPARED TO THREE MONTHS ENDED MARCH 31,
1994

The discussion of three months ended March 31, 1995 is based on management's
combination of the one month ended January 31, 1995 for TCC's predecessor and
the two months ended March 31, 1995 for TCC.

Although the Coinmach Acquisition was completed during this period,
management does not believe there was a material impact on TCC's day to day
operations and thus believes the combination of the two periods is
appropriate. Despite the change in accounting basis, management believes it
can make a meaningful comparison to the prior year's comparable three month
period.

Revenues were $17.4 million for the three month period ended March 31, 1995,
a decrease of $0.9 million or 5.0% compared to the three month period ended
March 31, 1994. This decrease was primarily the result of a decrease in Super
Laundry revenues of approximately $1.2 million, which was due to the timing of
completed contracts. Super Laundry recognizes revenue on a completed contract
basis. During the three months ended March 31, 1995, Super Laundry completed
fewer contracts than in the corresponding period in the prior year.

27
<PAGE>

This shortfall was eliminated in the subsequent quarter. Increases in route
revenues of approximately $0.3 million, primarily due to increased revenue per
machine of approximately 1%, partially offset this shortfall. The increase in
revenue per machine was primarily due to TCC's price review program whereby
vend prices are regularly monitored and price increases or decreases are
instituted with the goal of maximizing revenue per machine.

Laundry operating expenses decreased by $0.4 million or 2.7% to $13.2
million as compared to the three month period ended March 31, 1994. The
decrease in Super Laundry revenues resulted in a corresponding reduction in
laundry operating expenses of approximately $0.8 million. Offsetting this
decrease is an increase in commission expense of approximately $0.2 million,
which is based on increased route revenues. The remaining increase of $0.2
million is due to a general increase in expenses.

General and administrative expenses were generally unchanged for the two
periods.

Depreciation and amortization expense decreased in the three month period
ended March 31, 1995 by $0.5 million compared to the three month period ended
March 31, 1994. The decrease was primarily the result of purchase accounting
adjustments associated with the Coinmach Acquisition.

As a result of the above, operating loss was approximately $0.2 million for
each period.

Interest expense for the three month period ended March 31, 1995 increased
by $0.3 million or 30.9% compared to the three month period ended March 31,
1994, primarily due to an increase in the effective interest rate to
approximately 11% from approximately 8%, due to the increase in the prime
rate.

Income taxes were insignificant in both periods and resulted from state and
local taxes. TCC had no Federal income tax benefit in either period because of
the valuation allowances established against deferred tax assets generated
from net operating losses.

FISCAL YEAR ENDED DECEMBER 31, 1994 COMPARED TO FISCAL YEAR ENDED DECEMBER
31, 1993

Revenues were $73.9 million in fiscal 1994, an increase of $2.0 million or
2.8% compared to fiscal 1993. The favorable change is attributable to
improvements in Super Laundry of approximately $1.5 million and improvements
in route operations of approximately $0.5 million. The increase in Super
Laundry revenue is primarily the result of access to more attractive financing
options for Super Laundry customers. The increase in route revenues is due to
a 3.8% increase in revenue per machine, partially offset by a 1% decrease in
the machine base. The increase in revenue per machine was primarily due to the
Company's price review program.

Laundry operating expenses increased by $1.9 million or 3.7% to $54.7
million as compared to fiscal 1993. The increase is attributed to costs
associated with the increase in Super Laundry revenue and increased laundry
operating expenses of the route operations.

General and administrative expenses decreased by $0.6 million or 11.3% in
fiscal 1994 compared to fiscal 1993 due to decreased salaries, benefits and
professional fees.

Depreciation and amortization expense decreased in fiscal 1994 by $0.8
million or 4.9% compared to fiscal 1993. The decrease was primarily the result
of certain assets acquired in the 1989 Transaction becoming fully depreciated
in fiscal 1994.

As a result, operating loss decreased by $1.5 million to $0.3 million or
81.8% for the year ended December 31, 1994.

Income taxes were insignificant in both periods and resulted from state and
local taxes. CIC had no Federal income tax benefit in either period because of
the valuation allowances established against deferred tax assets generated
from net operating losses.

28
<PAGE>

Interest expense for fiscal 1994 decreased by $6.5 million or 61.8% compared
to fiscal 1993 primarily due to the conversion of subordinated notes to common
stock pursuant to CIC's prepackaged bankruptcy plan of reorganization filed on
December 15, 1993. This decrease was partially offset by an increase of $0.3
million in interest expense resulting from an increase in interest rates on
its long term debt obligations.

CIC recognized an extraordinary gain of $20.4 million on the early
extinguishment of debt in 1994 in connection with CIC's plan of
reorganization.

Solon

FISCAL YEAR ENDED SEPTEMBER 29, 1995 COMPARED TO FISCAL YEAR ENDED SEPTEMBER
30, 1994

The discussion should be read in conjunction with the following table which
combines the Predecessor and Successor periods for fiscal 1995 (in thousands).

<TABLE>
<CAPTION>
FISCAL YEAR ENDED SEPTEMBER 29, 1995
-------------------------------------
APRIL 5, OCTOBER 1, FISCAL YEAR
1995 TO 1994 TO ENDED
SEPTEMBER 29, APRIL 4, SEPTEMBER 30,
1995 1995 TOTAL 1994
------------- -------------- -------- ------------------
SUCCESSOR(1) PREDECESSOR(1) PREDECESSOR(1),(2)
<S> <C> <C> <C> <C>
Revenues................ $89,719 $52,207 $141,926 $104,553
Laundry operating
expenses............... 62,905 33,165 96,070 66,527
Depreciation and
amortization........... 18,423 10,304 28,727 21,347
General and
administrative
expenses............... 2,458 1,539 3,997 2,839
Gain on sale of
equipment.............. -- -- -- (109)
Restructuring costs..... 2,200 -- 2,200 --
------- ------- -------- --------
Operating income........ 3,733 7,199 10,932 13,949
Interest expense, net... 11,541 8,928 20,469 18,105
------- ------- -------- --------
Loss before income taxes
and extraordinary
item................... (7,808) (1,729) (9,537) (4,156)
------- ------- -------- --------
Provision (benefit) for
income taxes:
Currently payable....... 420 270 690 200
Deferred................ (2,282) (220) (2,502) 2,562
------- ------- -------- --------
(1,862) 50 (1,812) 2,762
------- ------- -------- --------
Loss before
extraordinary item..... (5,946) (1,779) (7,725) (6,918)
Extraordinary item, net
of income taxes of $0.. -- 848 848 --
------- ------- -------- --------
Net loss................ $(5,946) $(2,627) $ (8,573) $ (6,918)
======= ======= ======== ========
</TABLE>
- --------
(1) The term "Predecessor" refers to the period in time prior to the Solon
Acquisition. The term "Successor" refers to the period in time after the
Solon Acquisition and includes the historical results of Solon which have
been restated to include the pooling of interests of TCC. Successor is
presented on a different basis of accounting and therefore, is not
comparable to the Predecessor.

(2) Certain reclassifications have been made to conform to the 1995
presentation.

Excluding revenues of TCC of $38.5 million for the Successor period,
revenues of $103.4 million for fiscal 1995 were $1.1 million or 1.1% lower
than revenues for fiscal 1994. A favorable change of approximately $1.8
million in revenues resulting from increases in revenue per machine was offset
by approximately $2.9 million in losses caused by a decline in the average
number of laundry machines on location. The decline in the average

29
<PAGE>

number of laundry machines on location was primarily due to the lack of
available capital prior to the Refinancing. Revenue per machines rose slightly
primarily because of price increases and improved occupancy levels in the
Southeast and South-Central regions.

Excluding laundry operating expenses of TCC of $29.8 million for the
Successor period, laundry operating expenses of $66.3 million for fiscal 1995
were $0.2 million or 0.3% lower than laundry operating expenses for fiscal
1994. Commissions expense decreased by approximately $1.0 million due to lower
revenues and a reduction in the average commissions rate from 44.7% of
revenues during fiscal 1994 to 44.1% of revenues during fiscal 1995. The
decrease in the commissions rate was primarily attributable to Solon's ongoing
commission control programs and a shift away from higher commission locations
primarily in the Washington, D.C. Metropolitan area. Laundry operating
expenses other than commissions expense rose by approximately $0.8 million in
fiscal 1995 compared to fiscal 1994 primarily due to inflationary increases.

Excluding depreciation and amortization expenses of TCC of $5.5 million for
the Successor period, depreciation and amortization increased by $1.9 million
or 8.6% for fiscal 1995, compared to the prior year. The increase was due
primarily to purchase accounting adjustments resulting from the Solon
Acquisition.

Excluding general and administrative expenses of TCC of $0.9 million for the
Successor period, general and administrative expenses of $3.1 million for
fiscal 1995 were $0.3 million or 10.7% higher than such expenses for fiscal
1994. General and administrative expenses include a charge of approximately
$0.3 million for the cost of a severance agreement with the former chief
executive officer of Solon.

Solon provided for one-time restructuring costs of approximately $2.2
million to cover severance payments to certain of Solon's management,
administrative and regional personnel, costs to relocate Solon's financial and
administrative functions to Roslyn, New York, costs to integrate certain
financial and operating systems, and costs related to the consolidation of
certain of Solon's regional offices.

Excluding interest expense of TCC of $2.7 million for the Successor period,
interest expense for fiscal 1995 decreased by $0.3 million or 1.7% compared to
the prior year primarily due to an increase in interest income, and to a
lesser extent, a decrease in interest caused by a repurchase and retirement of
$1.0 million of the Old Senior Notes in November 1994.

Solon's income tax benefit was $1.8 million in fiscal 1995 compared to a tax
provision of $2.8 million for fiscal 1994. As further discussed in the
consolidated financial statements, the tax provision for fiscal 1994 included
a $3.7 million charge to establish a valuation allowance for previously
recorded deferred tax assets. The deferred tax asset of $2.0 million recorded
in the Successor period does not reflect a valuation allowance because the
loss can be utilized against the deferred tax liabilities in the carryforward
periods. In addition to this benefit, Solon's effective income tax rate
differs from the amount computed by applying the U.S. federal statutory rate
to loss before income taxes as a result of state taxes and permanent book/tax
differences.

Solon incurred costs aggregating $0.8 million in connection with the Solon
Acquisition, including a total of $0.4 million in lump sum payments made to
fourteen management employees pursuant to certain contractual arrangements
relating to the acquisition. The total costs have been reflected as an
extraordinary item in the financial statements.

FISCAL YEAR ENDED SEPTEMBER 30, 1994 COMPARED TO FISCAL YEAR ENDED OCTOBER 1,
1993

Revenues were $104.6 million in fiscal 1994, a decrease of $0.3 million or
0.4% compared to fiscal 1993. The unfavorable change in revenues consisted of
approximately a $1.2 million increase due to increases in revenue per machine
offset by a $1.6 million decrease in revenues caused by a decline in the
average number of machines on location. Price increases and improved occupancy
levels in apartment buildings in the Carolinas, Georgia and Texas were the
primary reasons for the increases in revenue per machine. Severe winter
weather in the mid-Atlantic states and more significantly a decline in the
average number of machines on location due primarily to competitive pressures
in the Washington, D.C. Metropolitan area were responsible for the offsetting
decline in revenues.

30
<PAGE>

Laundry operating expenses decreased by $1.0 million or 1.5% to $66.4
million in fiscal 1994 as compared to fiscal 1993. The decline was primarily
the result of lower revenues and a reduction in the average commission rates
as a percentage of revenues from 45.4% in fiscal 1993 to 44.7% in fiscal 1994.
The decrease in the commission rate was primarily attributable to Solon's
ongoing commission control programs. Additionally, a gain on divestiture of
$0.1 million was netted against these expenses in fiscal 1994.

General and administrative expenses increased by $0.3 million or 10.2% in
fiscal 1994 compared to fiscal 1993 primarily due to adjustments totalling
approximately $0.4 million in fiscal 1993 related to a re-evaluation of
certain accrual and other liability balances.

Depreciation and amortization increased in fiscal 1994 approximately $0.3
million or 1.6% compared to fiscal 1993 primarily as a result of a higher
level of capital expenditures in fiscal 1993.

Interest expense for fiscal 1994 increased by $0.7 million or 3.7% compared
to fiscal 1993. The increase was due primarily to the expiration of an
interest rate exchange agreement in fiscal 1993 in which a benefit of $0.5
million was realized in fiscal 1993 reducing Solon's interest expense.
Additionally, borrowing costs on Solon's revolving line of credit were
somewhat higher in fiscal 1994 over fiscal 1993 due to higher average balances
borrowed.

Solon's income tax provision was 2.8 million in 1994 as compared to an
income tax benefit of $0.8 million recorded in 1993. As further discussed in
the consolidated financial statements, the tax provision for 1994 includes a
$3.7 million charge to establish a valuation allowance for previously recorded
deferred tax assets. In addition to this charge, Solon's effective income tax
rate differs from the amount computed by applying the U.S. federal statutory
rate to loss before income taxes as a result of state taxes and permanent
book/tax differences (primarily goodwill amortization).

IMPACT OF RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In March 1995, the Financial Accounting Standards Board issued Statement No.
121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed of", which requires impairment losses to be recorded on
long-lived assets used in operations when indicators of impairment are present
and the undiscounted cash flows estimated to be generated by those assets are
less than the assets' carrying amount. Statement No. 121 also addresses the
accounting for long-lived assets that are expected to be disposed. The Company
will adopt Statement No. 121 in the first quarter of fiscal year 1997 and,
based on current circumstances, does not believe the effect of the adoption
will be material.

Statement of Financial Accounting Standards No. 123, "Accounting for Stock
Based Compensation", is effective for fiscal years beginning after December
15, 1995. Statement No. 123 provides companies with a choice to follow the
provisions of Statement No. 123 in determination of stock-based compensation
expense or to continue with the provisions of APB 25, "Accounting for Stock
Issued to Employees." The Company will continue to follow APB 25 and will
provide pro forma disclosures as required by Statement No. 123 in the March
28, 1997 notes to the consolidated financial statements.

LIQUIDITY AND CAPITAL RESOURCES

The Company continues to have substantial indebtedness and debt service
requirements. At March 29, 1996, the Company had outstanding long-term debt of
approximately $202.8 million and stockholders' deficit after restructuring
charges and writeoffs related to the Merger and the Refinancing of
approximately $1.3 million. As of July 15, 1996, the Company had approximately
$6.1 million outstanding under the Revolving Credit Facility.

31
<PAGE>

FINANCING ACTIVITIES

Coinmach Senior Notes

In connection with the Refinancing, the Company issued 11 3/4% Senior Notes
due 2005 pursuant to the terms of an indenture, dated as of November 30, 1995,
between Coinmach and Shawmut Bank Connecticut, National Association, as
amended by the First Supplemental Indenture, dated as of December 11, 1995,
between Coinmach and Fleet Bank of Connecticut (formerly known as Shawmut Bank
Connecticut, National Association) (as amended, the "Indenture") in an
aggregate principal amount of $196,655,000. In April 1996, pursuant to a
registration statement declared effective by the Commission on March 28, 1996,
the Company consummated a registered exchange offer, which expired on April
29, 1996, pursuant to which all issued and outstanding 11 3/4% Senior Notes
due 2005 were exchanged for Series B 11 3/4% Senior Notes due 2005. The
Company also has $5 million of 12 3/4% Senior Notes due 2001 issued and
outstanding that were not exchanged in the exchange offer.

The Senior Notes, which mature on November 15, 2005, are unsecured senior
obligations of Coinmach and are redeemable, at Coinmach's option, in whole or
in part at any time or from time to time, on and after November 15, 2000, upon
not less than 30 nor more than 60 days notice, at the redemption prices set
forth in the Indenture, plus, in each case, accrued and unpaid interest
thereon, if any, to the date of redemption.

The Indenture contains a number of restrictive covenants and agreements
including covenants with respect to the following matters: (i) limitation on
Indebtedness (as defined in the Indenture); (ii) limitation on restricted
payments (in the form of the declaration or payment of certain dividends or
distributions on the capital stock of Coinmach or its subsidiaries, the
purchase, redemption or other acquisition of any capital stock of Coinmach,
the voluntary prepayment of subordinated Indebtedness, or an Investment (as
defined in the Indenture) in any other person); (iii) limitation on
transactions with affiliates; (iv) limitation on liens; (v) limitation on
sales of assets; (vi) limitation on sale and leaseback transactions; (vii)
limitation on conduct of business; (viii) limitations on dividends and other
payment restrictions affecting subsidiaries; and (ix) limitations on
consolidations, mergers and sales of substantially all of Coinmach's assets.

The events of default under the Indenture include provisions that are
typical of senior debt financings. Upon the occurrence and continuance of
certain events of default, the trustee or the holders of not less than 25% in
aggregate principal amount of outstanding Senior Notes may declare all unpaid
principal and accrued interest on all of the Senior Notes to be immediately
due and payable.

Upon the occurrence of a Change of Control (as defined in the Indenture),
each holder of Senior Notes will have the right to require that Coinmach
purchase all or a portion of such holder's Senior Notes pursuant to the offer
described in the Indenture, at a purchase price equal to 101% of the principal
amount thereof plus accrued and unpaid interest, if any, to the date of
purchase.

Revolving Credit Facility

On November 30, 1995, Coinmach entered into the Revolving Credit Facility
with Heller Financial, Inc. ("Heller"), as amended on December 9, 1995,
pursuant to which Heller agreed, subject to a borrowing base, to lend on a
revolving basis to Coinmach up to a maximum of $35 million for an initial
period of five years. Of that $35 million, Heller may extend up to $3 million
of letter of credit accommodations to Coinmach. Additionally, availability
under the Revolving Credit Facility is reduced by an amount equal to a pro-
rated portion of one semi-annual interest payment on the Senior Notes.

Interest on Coinmach's borrowings under the Revolving Credit Facility is
payable monthly in arrears at a rate per annum of no greater than (i) LIBOR
plus 2.50% or (ii) the Base Rate (as defined in the Revolving Credit Facility)
plus 1.00%. Coinmach is obligated to pay an unused line fee in an amount equal
to 0.5% of unused availability payable monthly in arrears.

32
<PAGE>

Indebtedness under the Revolving Credit Facility is secured by all of the
Company's real and personal property. The Company has guaranteed the
indebtedness under the Revolving Credit Facility and pledged to Heller its
interests in all of the issued and outstanding shares of capital stock of
Coinmach. In addition to customary restrictive covenants and agreements, the
Revolving Credit Facility contains certain covenants including, but not
limited to, a minimum fixed charge coverage ratio, limitations on
indebtedness, guarantees, capital expenditures, mergers and acquisitions,
dividends, stock repurchases, management fees, transactions with affiliates
and investments.

The Revolving Credit Facility contains certain events of default, including
the following: (i) the failure of Coinmach to pay any of its obligations under
the Revolving Credit Facility when due or within five days after the due date;
(ii) certain failures by Coinmach to pay principal or interest on indebtedness
or certain breaches or defaults by Coinmach of certain indebtedness, in each
case after any applicable grace period; (iii) certain defaults by Coinmach in
the performance or observance of the agreements or covenants under the
Revolving Credit Facility or related agreements, beyond any applicable cure
period; (iv) the falsity in any material respect of certain of Coinmach's
representations or warranties under the Revolving Credit Facility; (v) certain
judgments against Coinmach; or (vi) certain events of bankruptcy or insolvency
of Coinmach or the Company.

OPERATING ACTIVITIES

The Company's level of indebtedness will have several important effects on
its future operations including the following: (i) a significant portion of
the Company's cash flow from operations will be required to pay interest on
its indebtedness and will not be available for other purposes; (ii) the
financial covenants and other restrictions contained in certain of the
financing agreements governing the Company's indebtedness will require the
Company to meet certain financial tests and will limit its ability to borrow
additional funds or to dispose of assets; (iii) the Company's ability to
obtain additional financing in the future for working capital, capital
expenditures, acquisitions and general corporate purposes may be impaired; and
(iv) the Company's ability to adapt to changes in the coin-operated laundry
equipment services industry and to economic conditions in general could be
limited. Coinmach Laundry is a holding company that will be dependent upon its
principal operating subsidiary, Coinmach, as its primary source of revenue
subsequent to the Offering. At March 29, 1996, no amounts were outstanding
under the Revolving Credit Facility. The interest rate as of March 29, 1996
was 9.25%.

The expenses of the Company include significant amounts of depreciation and
amortization (approximately $36.6 million for the twelve months ended March
29, 1996) which have the effect of reducing net income but not operating cash
flow. In accordance with generally accepted accounting principles, a
significant amount of the purchase price of businesses acquired by the Company
is allocated to "contract rights", which costs are amortized over periods of
up to 15 years. Although such accounting treatment has a favorable effect on
cash flow by reducing taxes, it also reduces net income. The Company expects
to continue this practice with future acquisitions so as to maximize cash
flows through the recognition of related smaller net income caused by the
increased amortization. Such a practice will be employed until the purchase
price has been fully amortized.

The Company anticipates that it will continue to utilize cash flow from its
operations to finance its capital expenditures and working capital needs,
including interest payments on its outstanding indebtedness. Capital
expenditures for the twelve months ended March 29, 1996 were approximately
$27.3 million, including approximately $2.1 million of non-recurring costs
associated with the consolidation of certain of the Company's facilities and a
capital replacement program designed to offset deficiencies resulting from
prior capital constraints. The Company instituted the capital replacement
program to upgrade certain equipment of the Company formerly maintained by
Solon. The Company is not subject to contractual commitments to vendors with
respect to any material portion of the capital expenditures anticipated for
the next twelve months. Under the terms of the Revolving Credit Facility, the
Company is obligated to incur capital expenditures to maintain and repair
equipment in varying amounts up to $14 million per year after April 1, 1996.
On a pro forma basis, after giving effect to all route acquisitions
consummated through May 1996 as if such transactions occurred at the

33
<PAGE>

beginning of such period, the Company spent $29.0 million on capital
expenditures for the year ended March 29, 1996. The Company anticipates that
capital expenditures, including those relating to maintaining its existing
installed machine base, will be approximately $25 million for the twelve
months ending March 28, 1997. Management believes that the Company has
adequate resources to address such capital requirements in the near future.

The Company's working capital requirements are, and will continue to be,
minimal since a significant portion of the Company's operating expenses are
not paid until after cash is collected from the installed machines. In
connection with the Refinancing, the Company is required to make semi-annual
cash interest payments on the Senior Notes, and will be required to make
monthly interest payments under the Revolving Credit Facility. Management
believes that the Company's future operating activities will generate
sufficient cash flow to repay borrowings under the Senior Notes and the
Revolving Credit Facility or permitted refinancings thereof. An inability of
the Company, however, to comply with covenants or other conditions contained
in the Indenture or in the Revolving Credit Facility could result in an
acceleration of the amounts due thereunder. If the Company is unable to meet
its debt service obligations, it could be required to take certain actions
such as reducing or delaying capital expenditures, selling assets, refinancing
or restructuring its indebtedness, selling additional equity capital or other
actions. There is no assurance that any of such actions could be effected on
commercially reasonable terms, if at all, or on terms permitted under the
Revolving Credit Facility or the Indenture or that the assets of the Company
would be sufficient to repay in full such indebtedness and other indebtedness
of the Company if such indebtedness were to be accelerated.

INFLATION AND SEASONALITY

In general, the Company's laundry operating expenses and general and
administrative expenses are affected by inflation and the effects of inflation
may be experienced by the Company in future periods. Management believes that
such effects have not been nor will be material to the Company. The Company's
business generally is not seasonal.

BUSINESS

OVERVIEW

The Company's existing customer base is comprised of landlords, property
management companies, and owners of rental apartment buildings, condominiums
and cooperatives, university and institutional housing and other multi-family
properties. The Company owns and operates over 245,000 coin-operated washers
and dryers on routes in over 26,000 buildings located in 28 states and the
District of Columbia. The Company's routes are located throughout the
Northeast, Mid-Atlantic, Southeast, South-Central and Mid-West regions of the
United States. Management believes, based on its knowledge of the industry,
that the Company is the second largest supplier of coin-operated laundry
equipment services for multi-family buildings in the United States and the
largest in the eastern United States.

The Company coordinates its regional operations from its headquarters in
Roslyn, New York. While financial and administrative activities of the Company
are located in Roslyn, operating activities, including sales, service and
collections, are conducted through its regional offices. The following table
sets forth certain

34
<PAGE>

information relating to the Company's regional operations on a pro forma basis
for the year ended March 29, 1996:

<TABLE>
<CAPTION>
MID- SOUTH-
NORTHEAST ATLANTIC SOUTHEAST CENTRAL MID-WEST TOTAL
--------- -------- --------- ------- -------- -----
<S> <C> <C> <C> <C> <C> <C>
States.................. NY, NJ, CT D.C., MD, VA, WV, NC, SC, TX, LA, FL, IL, IA, SD, NE
PA, DE GA, KY, AL, TN AK, MS, OK MO, KS, IN, MI
Approximate Revenue (in $76.6
millions).............. $30.8 $24.9 $46.5 $10.6 $189.4
Employees............... 242(2) 87 109 199 52(1) 689(2)
</TABLE>
- --------
(1)Represents employees hired by the Company on April 2, 1996, in connection
with the Allied Acquisition.
(2) Includes 40 executive, financial and administrative personnel at the
Company's headquarters located in Roslyn, New York.

BUSINESS STRATEGY

The Company's business strategy is to increase operating cash flow and
profitability through a combination of internal expansion and selective
acquisitions. Internal expansion is comprised of: (i) increasing the installed
machine base by adding new customers, (ii) converting owner-operated
facilities to Company managed facilities, and (iii) implementing selective
price increases within the Company's operating regions. The Company's
acquisition strategy is to acquire additional local, regional and multi-
regional route businesses from independent operators. Management believes that
by pursuing its business strategy the Company will be positioned to realize:
(i) additional operating leverage and economies of scale associated with
expanding its installed base of machines, (ii) reduced operating expenses
through consolidation of overhead functions and facilities, and (iii) reduced
equipment and parts costs on a per unit basis due to increased purchasing
requirements.

In January 1995, management, with its equity sponsor, GTCR, acquired the
Company's Northeast regional route business and initiated a strategy of growth
through acquisitions. This strategy was designed to increase the installed
machine base in its existing operating regions and to provide the Company with
a leading market position in new regions. Since January 1995, the Company has
grown its installed base from 54,000 machines to 245,000 machines as of May 1,
1996. Revenues and EBITDA (earnings before deductions for income taxes,
depreciation and amortization) have grown from $72.9 million and $13.6
million, respectively, for the twelve months ended March 31, 1995, to $189.4
million and $56.2 million, respectively, for the twelve months ended March 31,
1996, on a pro forma basis. See "Unaudited Pro Forma Financial Data." These
acquisitions have enabled the Company to improve its operating margins and
compete more aggressively for new strategic contracts.

Internal Expansion

New Locations. The Company's aggressive sales and marketing efforts focus on
two areas of expansion within its existing operating regions. The Company's
primary means of internal expansion is by marketing the Company's products and
services to building managers and property owners whose leases with other
laundry equipment servicers are near expiration. Many large customers require
competitive bids for expiring lease contracts. The Company's Integrated
Computer Systems track information on the lease expirations of its
competitors. The Company secures leases with these buildings through effective
data management on competition, its ability to quickly coordinate and target
its marketing efforts, aggressive bidding for new contracts and its long
standing industry reputation for prompt and reliable service.

Conversions. Management believes, based on industry estimates, that there
are approximately 1.0 million machines installed in locations that are managed
by owner-operators. Building owners or managers can forgo significant cash
outlays by contracting with the Company to purchase, service and maintain
laundry equipment. Accordingly, in conjunction with its Integrated Computer
Systems, the Company aggressively pursues building owners and managers to
convert from owner-operated laundry facilities. The Company offers a full
range of services from the design, construction and installation of new
laundry facilities to the refurbishment of existing facilities. Management
believes these services provide a competitive advantage in securing new
customers.

35
<PAGE>

Price Increases. In addition to growing the Company's installed base of
machines, management regularly reviews its pricing policies and procedures
under all existing leases. Management expects that the Company should realize
increases in revenue and cash flow from operations through selective price
increases and other pricing procedures in the forthcoming year, provided,
however, that due to competition and certain other factors beyond the
Company's control, there can be no assurance that such increases will occur.
The leases at 58% of the Company's locations allow price increases without
corresponding adjustments in rental payments or commissions.

Management believes that its strategy of growth within its existing
operating regions will result in additional economies of scale and operating
efficiencies associated with an expanded machine base.

Selective Acquisitions

The Company intends to capitalize on opportunities inherent within the
fragmented laundry services industry through selective acquisitions of local,
regional and multi-regional route businesses. In particular, there are
numerous private, family-owned businesses that may lack the financial
resources to provide advance rental payments, install new equipment, make
laundry room improvements or otherwise compete effectively with larger
independent operators such as the Company to secure new or renewal locations.
Consequently, such independent operators, many of which are undergoing
generational ownership changes, may represent potential acquisition
opportunities for the Company within its operating regions.

Management believes the Company is well positioned to capitalize on such
opportunities for growth and expansion due to its operating efficiencies, its
access to capital resources, and senior management's extensive experience and
relationships in the industry. The Company evaluates potential acquisitions
based on important criteria, including the size of the business (in terms of
revenues and machine base), the geographic concentration of the business,
market penetration, service history, customer relations, existing contract
terms and other potential operating efficiencies and cost savings. The Company
considers three types of acquisition candidates: (i) small local route
operators (including owner-operators); (ii) regional route operators; and
(iii) large, multi-regional route operators.

Local route operators. The purchase of small, local operators (businesses
operating within one of the Company's existing regions) results in lowering
the target's existing cost structure through the complete absorption of the
machine base into the Company's operations. The Company expects to evaluate
opportunities to acquire route businesses from independent operators to
further increase operating leverage within its operating regions. In many
regions, the Company may be able to acquire routes adjacent to its existing
areas of operation without incurring significant incremental operating,
collection, security, service and maintenance costs.

Regional route operators. A regional acquisition provides the opportunity to
improve the Company's cash flow by eliminating duplicative corporate and
administrative functions, reducing capital expenditures through improved
purchasing power and implementing the Company's Integrated Computer Systems.
The Allied Acquisition, completed on April 1, 1996, represented such an
acquisition, which management estimates will result in cost savings of
approximately $0.5 million annually. The Company completed the Allied
Acquisition as part of its acquisition strategy and its plan to establish a
larger market presence in the Midwest. This acquisition increased the
Company's installed machine base by approximately 24,000 machines. On a pro
forma basis for the period ending March 29, 1996, the Allied Acquisition
contributed an increase of approximately $3.3 million of EBITDA (earnings
before deductions for income taxes, depreciation and amortization) and
approximately $10.6 million of consolidated revenue.

Multi-regional route operators. The acquisition of a large, multi-regional
route operator may result in a number of operating efficiencies, including,
significant cost savings through the elimination of duplicative financial and
administrative functions and related fixed costs. In addition, the increased
volume of equipment purchases may result in reduced per unit capital
expenditures. Moreover, as is the case with all types of acquisitions, the
Company's Integrated Computer Systems would be utilized to provide further
operating

36
<PAGE>

efficiencies and related cost savings. The combination of Solon and TCC on
November 30, 1995, is an example of a multi-regional acquisition and has
resulted in approximately $3.7 million of annual cost savings. In addition to
the cost savings, the combination of Solon and TCC enabled the Company to
significantly increase its operating base, add several experienced regional
managers to its management team, penetrate new markets as a leader in each of
the acquired regions and become the second largest supplier of coin-operated
laundry equipment services in the United States.

INDUSTRY

The coin-operated laundry services industry is fragmented nationally with
many small, private and family-owned route businesses continuing to operate
throughout all major metropolitan areas. According to information provided by
the Multi-housing Laundry Association, the industry is comprised of over 280
independent operators. Based upon industry estimates, management believes
there are approximately 3.5 million machines installed throughout the United
States, 2.5 million of which are managed by independent operators such as the
Company and 1.0 million of which are managed by owner-operators. Despite the
overall fragmentation of the industry, there are currently three companies
including the Company with significant operations in multiple regions
throughout the United States. Management believes that its two major multi-
regional competitors are strongest in California and Chicago, Illinois, where
the Company currently has a minimal presence.

The industry is highly capital intensive and requires prompt and reliable
service. The majority of capital costs are incurred upon procurement of new
contracts. Such initial costs include replacing or repairing existing washers
and dryers, refurbishing laundry rooms and making advance rental payments to
secure long-term, renewable leases. After the initial expenditures, ongoing
working capital requirements are minimal, as machines operate for many years
if serviced properly, and variable costs are paid out of revenues collected
from the machines.

Historically, the industry has been characterized by stable demand and has
proven to be resistant to changing market conditions and general economic
cycles. Management believes that this is due to the consistent demand for
laundry services by building occupants. In addition, the Company has
experienced consistent pricing increases of approximately 2-3% per year on a
revenue per machine basis; however, there can be no assurance that the Company
will achieve such increases in the future.

Management believes that the industry's consistent and predictable revenue
and cash flow from operations are primarily due to: (i) the long-term nature
of location leases; (ii) the stable demand for laundry services; and (iii)
minimal ongoing working capital requirements.

DESCRIPTION OF OPERATIONS

The principal aspects of the Company's operations include: (i) location
leasing, (ii) service, (iii) remanufacturing, (iv) security, (v) information
management and (vi) sales and marketing.

Location Leasing

The Company's leases provide the Company the exclusive right to operate and
service the laundry equipment, including repairs and maintenance. The Company
typically sets pricing for the use of the machines on location, and the
property owner or manager maintains the premises and provides utilities such
as gas, electricity and water.

In return for the exclusive right to provide laundry equipment services,
most of the Company's leases provide for monthly commission payments to the
location owners. Under the majority of leases, these commissions are based on
a percentage of the cash collected from the laundry machines. Many of the
Company's leases require the Company to make advance rental payments or
bonuses to the location owner in addition to commissions. The Company's leases
typically include provisions that allow for unrestricted price increases, a

37
<PAGE>

right of first refusal (an opportunity to match competitive bids at the
expiration of the lease term) and termination rights if the Company does not
receive minimum net proceeds from a contract. The Company has some flexibility
in negotiating its leases and, subject to regional competitive factors, may
vary the terms and conditions of a lease, including commission rates and lease
bonuses. The Company evaluates each lease opportunity through its Integrated
Computer Systems which are designed to achieve certain targeted levels of
profitability.

Management estimates that over 89% of its locations are subject to long-term
leases with initial terms of three to ten years. Of the remaining locations
not subject to long term leases, the Company believes that it has retained a
majority of such customers through long-standing relationships and intends to
continue to service such customers. Approximately 67% of the Company's leases
renew automatically, and the Company has a right of first refusal on
termination in approximately 56% of its leases. The Company's automatic
renewal clause typically provides that, if the building owner fails to take
any action prior to the end of the original lease term or any renewal term,
the lease will automatically renew on substantially similar terms. As of March
31, 1996, the Company's leases have an average remaining life to maturity of
42 months.

Management estimates that approximately 13% of its leases expire each year.
Although the timing of lease renewals may not coincide with the applicable
expiration dates of such leases, management believes that, with respect to the
13% of leases scheduled to expire each year, approximately 75% of such leases
are retained by the Company through its lease renewal efforts. Additionally,
with respect to the remaining 25% of such leases scheduled to expire each
year, the Company historically has determined not to pursue approximately one-
half of these leases due to profitability concerns. The remaining half of
these leases scheduled to expire each year (or approximately 1-2% of the
Company's installed machine base) are lost to competitors or owner-operators.
These losses, however, do not take into account the Company's addition of new
locations to its installed base of machines achieved through its sales and
marketing efforts.

Service

The Company's employees deliver, install, service and collect from coin-
operated washers and dryers in laundry facilities at its leased locations.

The Company's fleet of 270 radio-equipped service vehicles allows the quick
dispatch of service technicians in response to both computer-generated (for
preventive maintenance) and customer-generated service calls. On a daily
basis, the Company receives and responds to approximately 1,000 service calls.
Management estimates that less than 1% of the Company's machines are out of
service on any given day. The ability to reduce machine down time, especially
during peak usage, serves to enhance revenue and improve the Company's
reputation with its customers.

In a business that emphasizes prompt and efficient service, management
believes that the Company's Integrated Computer Systems provide a significant
competitive advantage in terms of responding promptly to customer needs.
Computer-generated service calls for preventive maintenance are based on
previous service history, repeat service call analysis and monitoring of all
serviced areas. These operations coordinate the Company's radio-equipped
service vehicles that allow the Company to address customer needs quickly and
efficiently.

Remanufacturing

The Company's remanufacturing operations provide approximately one-third of
its annual machine installation requirements. The Company rebuilds and
reinstalls a portion of its machines at approximately one-third the cost of
acquiring new machines, providing significant cost savings. Remanufactured
machines are restored to virtually new condition with the same estimated
average life and service requirements as new machines. Machines that can no
longer be remanufactured are stripped and added to the Company's inventory of
spare parts, generating additional cost savings.

38
<PAGE>

Since January 1995, the Company has consolidated the number of
remanufacturing facilities from twelve local facilities to three larger,
regional facilities, providing for consistency in machine quality and
efficient operations strategically located to service each of its operating
regions. Management believes the Company will be able to remanufacture a
comparable number of machines despite the reduction in the number of such
facilities.

Security

Management believes that it provides the highest level of security control
in the laundry equipment services industry. The Company utilizes numerous
precautionary procedures with respect to cash collection, including frequent
alteration of collection patterns, extensive monitoring of collections and
other control mechanisms. The Company practices stringent employee standards
and screening procedures with prospective employees. Employees responsible for
or who have access to the collection of funds are tested randomly and
frequently. Additionally, the Company's security department performs trend and
variance analyses of daily collections by location. Security personnel monitor
locations, conduct investigations, and implement additional security
procedures as necessary.

Information Management

Management believes that the Company's proprietary Integrated Computer
Systems significantly enhance its operating efficiencies as well as its sales
and marketing efforts. The Integrated Computer Systems provide speed and
accuracy throughout the entire service cycle by integrating the functions of
service call entry, dispatching service personnel, parts and equipment
purchasing, installation, distribution and collection. Management is able to
obtain daily, monthly, quarterly and annual reports on location performance,
coin collection, service and sales activity by salesperson.

Management also believes that the Integrated Computer Systems enhance the
Company's ability to successfully integrate acquired businesses into its
existing operations. With the Solon Acquisition, the Company initiated a
comprehensive systems review and upgrade throughout the operating regions. To
date, the collection phase of the upgrade, which has the greatest impact on
revenue enhancement and cost reduction, has been implemented over
approximately 50% of the Company's machine base. Management anticipates this
phase of the integration will be completed by September 1996. Management
believes that a regional acquisition, such as the Allied Acquisition, can be
fully integrated within 60-90 days.

In addition to coordinating all aspects of the service cycle, the Company's
Integrated Computer Systems track contract performance which indicate
unreported machine failure or pilferage and provide data to forecast future
equipment failures. Data on machine performance is used by the sales staff to
forecast revenue by location. The purchasing department tracks bids on the
Company's equipment requirements to support an aggressive competitive bidding
process. The Integrated Computer Systems also provide the sales staff with an
extensive database essential to the Company's marketing strategy to obtain new
business through competitive bidding or owner-operator conversion
opportunities.

Sales and Marketing

The Company markets its products and services through a sales staff with an
average industry experience of over ten years. The principal responsibility of
the sales staff is to solicit and negotiate lease arrangements with building
owners and managers. All sales personnel are paid commissions that comprise
50% or more of their annual compensation. Selling commissions are based on a
percentage of a location's annualized earnings before interest and taxes.
Management believes that its sales staff is among the most competent and
effective in the industry. Sales personnel must be proficient with the
application of sophisticated financial analyses to achieve their targeted
goals in securing location contracts and renewals.

The Company's marketing strategy emphasizes service excellence offered by
its experienced, highly skilled personnel and its quality equipment that
maximizes efficiency and revenue and minimizes machine down-time.

39
<PAGE>

Additionally, the Integrated Computer Systems monitor performance, repairs and
maintenance, as well as the profitability of locations on a daily basis. The
Company's sales staff targets potential lease locations by utilizing its
Integrated Computer Systems' extensive database that provides information on
the Company's, as well as its competitors' locations. All sales activity, from
sale entries to data on service and installation is recorded and monitored
daily on a custom-designed, computerized sales planner.

No single customer represents more than 2% of the Company's revenues or
installed machine base. In addition, the Company's ten largest customers taken
together account for less than 10% of the Company's revenues.

COMPETITION

The coin-operated laundry equipment services industry is highly competitive,
capital intensive and requires reliable, quality service. Despite the overall
fragmentation of the industry, there are currently three companies including
the Company with significant operations in multiple regions throughout the
United States. Management believes that the Company's two major multi-regional
competitors, Web Service Company, Inc. and Macke Laundry Service, L.P., are
strongest in California and Chicago, Illinois, respectively, where the Company
currently has a minimal presence.

SUPER LAUNDRY

Super Laundry Equipment Corp., a wholly owned subsidiary of Coinmach, is a
construction and laundromat equipment distribution company. Super Laundry's
business consists of constructing complete turnkey laundromat retail stores,
retrofitting existing laundromat retail stores, distributing exclusive lines
of commercial coin and non-coin machines and parts, and selling service
contracts. The construction of laundromats and related equipment sales
constitute in excess of 95% of the revenues of Super Laundry. Super Laundry's
customers generally enter into sales contracts whereby Super Laundry will
construct and equip a complete laundromat operation, including location
identification, construction, plumbing, electrical wiring and all required
permits. Super Laundry generated $17.2 million in revenues and $2.6 million in
EBITDA (earnings before deductions for income taxes, depreciation and
amortization) for the year ended March 29, 1996.

FACILITIES

As of May 1996, the Company leases 16 offices in its various operating
regions for sales and service activities. The Company presently maintains a
facility that functions as its headquarters in Roslyn, New York, leasing
approximately 40,000 square feet on a month-to-month basis, however, such
leasing arrangement may only be terminated by the Company or its landlord upon
6 months notice. Management believes the Company can readily lease equivalent
office space on similar terms if necessary. The Company's Roslyn facility is
used for general corporate purposes, as well as for remanufacturing and
warehouse space for the Northeast operating region. The Company has the option
to purchase the Roslyn facility, which it presently does not intend to
exercise. The Company also leases approximately 30,000 square feet in
Elkridge, Maryland for sales, and warehouse space for the Mid-Atlantic region.

The Company is in the process of establishing a corporate development office
and relocating certain members of management to Charlotte, North Carolina for
the purpose of pursuing the Company's acquisition strategy.

EMPLOYEES

As of May 1996, the Company employed 689 full time employees. Hourly workers
in the Northeast region are represented by Local 966, affiliated with the
International Brotherhood of Teamsters (the "Union"). Management believes that
the Company has maintained a good relationship with the Union employees and
has never experienced a work stoppage since its inception. The current labor
contract with the Union expires in September 1996.

40
<PAGE>

On June 5, 1996, the International Union of Electronic and Electrical
Workers filed a petition with the National Labor Relations Board ("NLRB")
seeking to represent a unit of approximately 55 Company employees based in
Elkridge, Maryland. The NLRB has scheduled an election on July 24, 1996 to
resolve this representation issue. If such unionization were to occur, the
Company's flexibility in dealing with its employees would be restricted, which
could result in an increase in its labor costs.

The Company has no relationship with other unions.

LEGAL PROCEEDINGS

The Company has been named as a defendant in a number of legal actions
arising in the ordinary course of its business. Although the amount of any
liability that could arise with respect to these actions can not be accurately
predicted, management believes that any such liability, individually or in the
aggregate, will not have a material adverse effect on the Company.

41
<PAGE>

MANAGEMENT

EXECUTIVE OFFICERS AND DIRECTORS

The directors and executive officers of the Company are:

<TABLE>
<CAPTION>
NAME TITLE AGE
---- ----- ---
<S> <C> <C>
Stephen R. Kerrigan............ Chairman of the Board and Chief 42
Executive Officer, Director
Mitchell Blatt................. President, Chief Operating Officer, 44
Director
Robert M. Doyle................ Chief Financial Officer, Senior Vice 39
President Treasurer, Secretary
John E. Denson................. Senior Vice President--Corporate 58
Development
Michael E. Stanky.............. Senior Vice President 44
R. Daniel Osborne.............. Area Vice President 40
David A. Siegel................ Area Vice President 38
Bruce V. Rauner................ Director 40
David A. Donnini............... Director 31
James N. Chapman............... Director 34
</TABLE>

Pursuant to the terms of a Stockholders Agreement (the "SAS Stockholders
Agreement"), dated July 26, 1995, amended and restated as of November 30,
1995, among the Company, GTCR and the stockholders of the Company at such time
(the "SAS Stockholders"), the right of certain of the SAS Stockholders to
elect members of the Board as set forth therein automatically terminates upon
an initial public offering of the Company's common stock having an aggregate
offering value of at least $25 million. Upon the consummation of the Offering,
holders of the Common Stock of the Company prior to the Offering, who, after
consummation of the Offering will own in the aggregate approximately 60.5% of
the outstanding Common Stock, will enter into the Voting Agreement, providing
for, among other things, the designation and nomination of directors of the
Company by such stockholders. Pursuant to the Voting Agreement, each of the
stockholders party to such agreement will agree to vote its shares in favor of
the individuals designated below and to cause such individuals to be selected
as nominees to the Board, in accordance with the Bylaws of the Company, as
amended, with the effect that, at any given time, the directors of the Company
shall initially be comprised of: (i) two individuals designated by GTCR, (ii)
two members of the Company's management or employees or officers of the
Company, in each case, designated by the holders of a majority of the Common
Stock held by the executive officers (the "Executives") of the Company, which
individuals initially shall be Stephen R. Kerrigan (the "Management Director")
and Mitchell Blatt ("Blatt" and, together with the Management Director, the
"Executive Directors") (the designation of the Executive Director that will be
the Management Director shall be determined by the holders of a majority of
the Common Stock held by the Executives), and, (iii) one individual to be
jointly designated by GTCR and the Management Director, who initially shall be
James N. Chapman.

The Board will be divided into three classes as nearly equal in number as
possible. Within 90 days of consummation of the Offering, the Company shall
appoint up to two additional directors who are not employees or affiliates of
the Company. At each annual meeting of stockholders, successors to the class
of directors whose term expires at such meeting will be elected to serve for
three-year terms or until their successors are duly elected and qualified. The
Board has the power to appoint the officers of the Company. Each officer will
hold office for such terms as may be prescribed by the Board and until such
person's successor is chosen and qualified or until such person's death,
resignation or removal.

BACKGROUND AND EXPERIENCE

Mr. Kerrigan has been Chief Executive Officer of the Company since April,
1996, and of Coinmach since November, 1995. Mr. Kerrigan was President and
Treasurer of Solon and the Company from April, 1995 until April, 1996, and
Chief Executive Officer of TCC from January, 1995, until November, 1995. Mr.
Kerrigan was

42
<PAGE>

appointed Chairman of the Board of the Company in April, 1995 and of Coinmach
in November, 1995. Mr. Kerrigan has been a director of the Company's
predecessor, TCC, since January, 1995 and of Solon since April, 1995. Mr.
Kerrigan served as Vice President and Chief Financial Officer of TCC's
predecessor from 1987 until 1994. Mr. Kerrigan was an executive officer of CIC
which filed a voluntary petition for reorganization under Chapter 11 of the
United States Bankruptcy Code in 1993.

Mr. Blatt has been President and Chief Operating Officer of the Company
since April, 1996 and of Coinmach since November, 1995 and its predecessor,
TCC, since January, 1995. Mr. Blatt has been a director of the Company and
Coinmach since November, 1995. Mr. Blatt joined Coinmach's predecessor as Vice
President-General Manager in 1982 and was Vice President and Chief Operating
Officer from January 1988 to February 1994. Mr. Blatt was an executive officer
of CIC, which filed a voluntary petition for reorganization under Chapter 11
of the United States Bankruptcy Code in 1993.

Mr. Doyle has been Chief Financial Officer, Senior Vice President and
Secretary of the Company since April, 1996 and Chief Financial Officer, Senior
Vice President, Treasurer and Secretary of Coinmach since November, 1995. Mr.
Doyle served as Vice President, Treasurer and Secretary of Coinmach's
predecessor since January, 1995. Mr. Doyle joined Coinmach's predecessor in
1987 as Controller. In 1988, he became Director of Accounting, and was
promoted in 1989 to Vice President and Controller. Mr. Doyle was an executive
officer of CIC which filed a voluntary petition for reorganization under
Chapter 11 of the United States Bankruptcy Code in 1993.

Mr. Denson has been Senior Vice President of the Company since April, 1996
and of Coinmach since November, 1995. Mr. Denson was Senior Vice President,
Finance of Solon from June, 1987 until the Merger. He has served as an officer
of Solon under various titles since 1973. He served as a director and Co-Chief
Executive Officer of Solon from November, 1994 to April, 1995.

Mr. Stanky has been Senior Vice President of the Company since April, 1996
and of Coinmach since November, 1995. Mr. Stanky has been Senior Vice
President of Solon since July, 1995. He joined Solon in 1976 as a sales
manager. Mr. Stanky served Solon in various capacities since 1976, and in 1985
was promoted to Area Vice President responsible for the South-Central Region.
Mr. Stanky served as a Co-Chief Executive Officer from November, 1994 to
April, 1995.

Mr. Osborne has been Area Vice President of the Company since April, 1996
and of Coinmach since November, 1995. Mr. Osborne has served Solon in various
capacities since 1987. In July, 1995, he was promoted to Area Vice President
responsible for the Southeast Region.

Mr. Siegel has been Area Vice President of the Company since April, 1996 and
of Coinmach since November, 1995. Mr. Siegel joined Solon in 1985 as a sales
manager. Mr. Siegel served Solon in various capacities since 1985, and in
August, 1995 was promoted to Area Vice President responsible for the Mid-
Atlantic Region.

Mr. Rauner has been a Director of the Company since April, 1995, Coinmach
since November, 1995 and its predecessor, TCC, since January, 1995. Mr. Rauner
serves as a director of ERO, Inc., COREStaff, Inc. and Polymer Group, Inc. Mr.
Rauner has been a Principal and General Partner with GTCR since 1984, where he
is responsible for originating and making new investments, monitoring
portfolio companies and recruiting and training associates.

Mr. Donnini has been a Director of the Company since April, 1995, Coinmach
since November 1995 and its predecessor, TCC, since January, 1995. Mr. Donnini
serves as a director of Polymer Group, Inc. Mr. Donnini has been a Principal
of GTCR since 1993. From 1991 to 1993, Mr. Donnini was an Associate with GTCR.

Mr. Chapman has been a Director of the Company since April, 1995, Coinmach
since November 1995 and its predecessor, TCC, since January, 1995. Mr. Chapman
was a Principal of Fieldstone Private Capital Group, L.P. from its inception
in 1990 through May 30, 1996.

43
<PAGE>

EXECUTIVE COMPENSATION

The following table sets forth information concerning the compensation of
the Chief Executive Officer and the other four most highly compensated
executive officers (the "Named Executive Officers") of the Company whose total
annual compensation and bonus exceeded $100,000 during the fiscal years ended
September 30, 1994 and 1995 in the case of Solon, and December 31, 1994 and
1995, in the case of TCC, each a predecessor of the Company, and the fiscal
year ended March 29, 1996, in the case of the Company.

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
ANNUAL COMPENSATION
--------------------
FISCAL ALL OTHER
NAME AND PRINCIPAL OCCUPATION YEAR(1) SALARY ($) BONUS ($) COMPENSATION(2)
----------------------------- ------- ---------- --------- ---------------
<S> <C> <C> <C> <C>
Stephen R. Kerrigan............ 1996 215,000 400,000 13,024(3)
Chief Executive Officer 1995 195,607 91,250 12,478(3)
1994 202,481 -- 15,705(3)
Mitchell Blatt................. 1996 215,000 112,500 22,849(4)
President, Chief Operating Of-
ficer 1995 194,469 91,250 19,254(4)
1994 198,506 -- 21,505(4)
Robert M. Doyle................ 1996 110,577 62,500 2,338(5)
Senior Vice President 1995 96,069 25,000 1,781(5)
1994 80,351 -- 3,723(5)
John E. Denson................. 1996 125,300 25,000 2,233(6)
Senior Vice President 1995 125,299 -- 68,867(6)
1994 124,500 33,590 4,136(6)
Michael E. Stanky.............. 1996 141,425 37,500 1,253(7)
Senior Vice President 1995 129,646 -- 65,255(7)
1994 125,100 57,256 2,360(7)
</TABLE>
- --------
(1) Due to a change in the Company's fiscal year in 1995, fiscal year 1996 has
been pro-rated as necessary to reflect the applicable compensation for
such period.

(2) The Company has not previously offered and presently does not have a long
term incentive program. The Company does not presently intend to offer any
such program to its executive officers or other employees.

(3) Includes club membership fees for fiscal years 1996, 1995 and 1994 of
$4,600 each year; expense allowances for fiscal years 1996, 1995 and 1994
of $3,596, $3,052 and $8,705, respectively; use of a company car for
fiscal years 1996, 1995 and 1994 of $2,688, $2,688 and $2,400,
respectively; and contribution by TCC to the Company Profit Sharing Plan
for fiscal years 1996 and 1995 of $2,140 and $2,138, respectively; in each
case for Mr. Kerrigan.

(4) Includes club membership fees for fiscal years 1996, 1995 and 1994 of
$10,000 each year; expense allowances for fiscal years 1996, 1995 and 1994
of $7,310 and $6,091 and $10,105, respectively; use of a company car for
fiscal years 1996, 1995 and 1994 of $3,417, $1,025 and $1,400,
respectively; and contribution by TCC to the Company Profit Sharing Plan
for fiscal years 1996 and 1995 of $2,122 and $2,138, respectively; in each
case for Mr. Blatt.

(5) Includes use of a company car for fiscal years 1996, 1995 and 1994, of
$1,004, $712 and $3,723, respectively; and contribution by TCC to the
Company Profit Sharing Plan for fiscal years 1996 and 1995 of $1,334 and
$1,069, respectively; in each case for Mr. Doyle.

(6) Includes use of a company car for fiscal years 1996, 1995 and 1994, of
$1,150, $4,200 and $4,136, respectively; and contributions by Solon to the
Solon Retirement Savings Plan for fiscal years 1996 and 1995 of $1,083 and
$2,167, respectively; in each case for Mr. Denson. It also includes a
$62,500 lump sum payment to Mr. Denson on April 6, 1995 due to a change in
control of Solon.

(7) Includes contributions by Solon to the Solon Retirement Savings Plan for
fiscal years 1996, 1995 and 1994 of $1,253, $2,505 and $2,360,
respectively, for Mr. Stanky. It also includes a $62,750 lump sum payment
to Mr. Stanky on April 6, 1995 due to a change in control of Solon.

44
<PAGE>

EMPLOYMENT CONTRACTS

Employment Agreements of Stephen R. Kerrigan, Mitchell Blatt and Robert M.
Doyle. On January 31, 1995, TCC and each of Stephen R. Kerrigan, Mitchell
Blatt and Robert M. Doyle (each, a "Senior Manager"), entered into Senior
Management Agreements (the "Senior Management Agreements"). In connection with
the Merger, the obligations of TCC under the Senior Management Agreements were
assumed by the Company and certain amendments to such agreements were effected
pursuant to the Omnibus Agreement, dated as of November 30, 1995 (the "Omnibus
Agreement"). The Senior Management Agreements provide for annual base salaries
of $225,000, $225,000 and $100,000 for each of Messrs. Kerrigan, Blatt and
Doyle, respectively, which amounts are reviewed annually by the Board. In
1996, the Board approved increases in annual salaries for each of Messrs.
Kerrigan, Blatt and Doyle to $350,000, $250,000 and $150,000, respectively.
The Board, in its sole discretion, may grant each Senior Manager an annual
bonus. Each Senior Management Agreement is terminable at the will of the
Senior Managers or in the discretion of the Board. Senior Managers are
entitled to severance pay upon termination of their employment. If employment
is terminated by the Company without Cause (as defined in such agreement) and
no Event of Default (as defined in such agreement) has occurred and is
continuing under the Revolving Credit Facility or the Indenture, Senior
Managers are entitled to receive severance pay in an amount equal to 1.5 times
their respective annual base salaries then in effect, payable in 18 equal
monthly installments. If employment is terminated by the Company and an Event
of Default under the Revolving Credit Facility or Indenture has occurred and
is continuing, Senior Managers are entitled to receive severance pay in an
amount equal to their respective annual base salaries then in effect, payable
in 12 equal monthly installments. Under limited circumstances, Senior Managers
are entitled to receive half of the severance pay to which they are otherwise
entitled if employment with the Company is terminated by them.

Employment Agreement of John E. Denson. The Company entered into an
employment agreement with Mr. Denson on August 4, 1995 for a term of eight
months, subject to certain renewal options for Solon. The Company renewed Mr.
Denson's employment agreement through May 1996. The Company has agreed to
enter into an employment agreement with Mr. Denson commencing July 1996 for a
term of one year which is automatically renewable each year for successive
one-year terms. Such agreement provides for an annual base salary of $110,000,
commencing September 1, 1996, which amount is to be reviewed each December by
the Board, and, in the discretion of the Board, a performance-based annual
bonus. The agreement is terminable at the will of Mr. Denson or at the
discretion of the Board. Under the terms of such employment agreement, Mr.
Denson is entitled to receive severance pay upon termination of employment in
an amount equal to one-quarter of his annual base salary then in effect if
employment is terminated by him. If employment is terminated by the Company
without Cause (as defined in such agreement), however, Mr. Denson is entitled
to receive severance pay in an amount equal to the greater of $110,000 or his
annual base salary then in effect.

Employment Agreement of Michael E. Stanky. On July 1, 1995, the Company
entered into an employment agreement with Mr. Stanky providing for an annual
base salary of $150,000. The terms and conditions of Mr. Stanky's employment
agreement are substantially similar to the Senior Management Agreements.

COINMACH PROFIT SHARING AND RETIREMENT SAVINGS PLAN

The Company offers a profit sharing and retirement savings plan (the "Profit
Sharing Plan") to all current eligible employees of the Company (other than
those employees employed by Solon prior to the Merger) who have completed one
year of service. Pursuant to the Profit Sharing Plan, eligible employees may
defer from 2% up to 15% of their salaries up to a maximum level imposed by
applicable federal law ($9,240 in 1995). The percentage of compensation
contributed to the plan is deducted from each eligible employee's salary and
considered tax-deferred savings under applicable federal income tax law.
Pursuant to the Profit Sharing Plan, the Company contributes increasing
matching contribution amounts, based upon the number of years of service
completed by eligible participants, up to a maximum contribution of 1.5% of an
eligible employee's salary (subject to the Internal Revenue Code limitation on
compensation taken into account for such purpose). Matching contribution
percentages range from 5% for one to two years of service up to 25% for five
or more years of service. Eligible participants become vested with respect to
matching contributions made by the Company

45
<PAGE>

pursuant to a vesting schedule based upon an eligible employee's years of
service. After two years of service, an eligible employee is 20% vested in all
matching contributions made to the Profit Sharing Plan. Such employee becomes
vested in equal increments thereafter through the sixth year of service, at
which time such employee becomes 100% vested. Eligible participants are always
100% vested in their own contributions, including investment earnings on such
amounts.

The Company made the following matching contributions during its fiscal year
ended March 29, 1996 to the Named Executive Officers and directors appearing
in the Summary Compensation Table above: Mr. Kerrigan $2,140; Mr. Doyle
$1,334; and Mr. Blatt $2,122.

SOLON PROFIT SHARING AND RETIREMENT SAVINGS PLAN

The Company offers a profit sharing retirement savings plan (the "Solon
Retirement Savings Plan") to all current eligible employees who were employed
by Solon prior to the Merger and who have completed one year of service.
Participation in the Solon Retirement Savings Plan is voluntary and enables
eligible employees to contribute from 1% to 8% of annual compensation,
provided, such contributions do not exceed certain levels imposed by
applicable federal law ($9,240 in 1995). A discretionary matching contribution
is determined annually by the Company. Eligible participants become vested
with respect to matching contributions made by the Company pursuant to a
vesting schedule based upon an eligible employee's years of service. After
three years of service, an eligible employee is 50% vested in all matching
contributions made to the Solon Retirement Savings Plan. After four and five
years of service, an eligible employee is 75% and 100% vested, respectively,
in all such matching contributions. Eligible participants are always 100%
vested in their own contributions, including investment earnings on such
amounts.

The Company made the following matching contributions during its last
completed fiscal year to the Named Executive Officers and directors appearing
in the Summary Compensation Table above: Mr. Denson $1,083; and Mr. Stanky
$1,253.

In connection with the Merger, the Company is in the process of integrating
benefits to be provided to all its current employees, including those employed
by Coinmach prior to the Merger.

1996 EMPLOYEE STOCK OPTION PLAN

Prior to consummation of the Offering, the Company shall adopt, subject to
stockholder approval, the 1996 Stock Option Plan. The 1996 Stock Option Plan
will be administered by disinterested members of the Compensation Committee of
the Board. Any person who is a full-time, salaried employee of the Company
(excluding non-management directors) will be eligible to participate in the
1996 Stock Option Plan (a "Participant"). Subject to the terms of the 1996
Stock Option Plan, the Compensation Committee will select the Participants and
determine the terms and conditions of the options, including the type of award
granted, number of shares granted, vesting schedule, type of consideration to
be paid by the Company upon exercise of the options and the term of each
option. The 1996 Stock Option Plan provides for the issuance of options to
Participants covering 1,103,419 shares of Common Stock, subject to certain
adjustments reflecting changes in the Company's capitalization. Options
granted under the 1996 Stock Option Plan may be either incentive stock options
("ISOs") or such other forms of non-qualified stock options ("NQOs") as the
Board may determine. ISOs are intended to qualify as "incentive stock options"
within the meaning of Section 422 of the Internal Revenue Code of 1986, as
amended (the "Code"). The exercise price of the options will be at least 100%
of the fair market value of a share of Common Stock on the date of grant.

Options granted under the 1996 Stock Option Plan may be subject to time
vesting and certain other restrictions at the Compensation Committee's sole
discretion. Subject to certain exceptions, the right to exercise an option
generally terminates at the earlier of (i) the first date on which the grantee
of such option is not employed by the Company for any reason other than
termination without cause, death, voluntary retirement or permanent disability
or (ii) the expiration date of the option. If the grantee of an option dies or
suffers a

46
<PAGE>

permanent disability while still employed by the Company, the right to
exercise all unexpired installments of such option may be accelerated and
shall accrue as of the date of such death or the later of the date of such
permanent disability or the discovery of such permanent disability, and such
option may be exercisable, subject to certain exceptions, for 90 days after
such date in the case of death and for one year in the case of disability. If
the employee voluntarily retires, the option may be exercisable for up to
three years following the date of retirement, as long as the employee does not
engage in conduct that the Compensation Committee determines to be not in the
best interest of the Company. If the employment of the grantee of an option is
terminated without cause, to the extent the option has been vested, such
option shall be exercisable for 30 days after such date.

The 1996 Stock Option Plan provides that the total number of shares covered
by such plan, the number of shares covered by each option and the exercise
price per share may be proportionately adjusted by the Board or the
Compensation Committee in the event of a stock split, reverse stock split,
stock dividend or similar capital adjustment effected without receipt of
consideration by the Company. Upon a change in control of the Company, the
Compensation Committee may take any actions it deems appropriate with regard
to stock options outstanding under such plan. Such actions may include, but
are not limited to accelerating exercisability of options and requiring the
optionee to surrender options held for certain consideration described in such
plan. In the event of recapitalization or reorganization in which the Company
is not the surviving corporation, the Compensation Committee may adjust the
number, type, or price of options to reflect the restructuring event.

The Board generally has the power and authority to amend the 1996 Stock
Option Plan at any time without the approval of the Company's stockholders;
provided that, without the approval of the Company's stockholders, the Board
shall not amend such plan to cause any outstanding ISOs to no longer qualify
as ISOs. In addition, the Board shall not amend the 1996 Stock Option Plan to
materially and adversely affect the rights of an option holder under such
option without the consent of such option holder. The 1996 Stock Option Plan
will terminate on the tenth anniversary of its adoption unless sooner
terminated by the Board.

The Company does not expect to grant any options under the 1996 Stock Option
Plan to executive officers or other employees of the Company concurrently with
the Offering. There are 1,103,419 shares of Common Stock reserved for issuance
under the 1996 Stock Option Plan (representing approximately 9% of the
outstanding shares of Common Stock and Non-Voting Common Stock, on a fully
diluted basis).

GRANT OF OPTIONS

In connection with the Offering, the Board shall approve the granting of (i)
the MCS Capital Options, representing options to purchase up to 306,505 shares
of Common Stock (representing approximately 2.5% of the Common Stock and Non-
Voting Common Stock outstanding after giving effect to the Offering, on a
fully diluted basis) and (ii) the Additional Options, representing options to
purchase up to an aggregate of 429,107 shares of Common Stock (representing an
aggregate of approximately 3.5% of the Common Stock and Non-Voting Common
Stock outstanding after giving effect to the Offering, on a fully diluted
basis). Twenty percent (20%) of each of the MCS Capital Options and the
Additional Options to be granted upon the consummation of the Offering shall
vest at such time, with an additional twenty percent (20%) thereof vesting on
each successive anniversary of the date of grant. The MCS Capital Options and
Additional Options are exercisable at any time after vesting at a per share
price representing a 15% discount of the initial public offering price in the
Offering.

SOLON 1987 INCENTIVE STOCK OPTION PLAN

Solon's Incentive Stock Option Plan (the "Solon Stock Option Plan") was
terminated by the Board on May 3, 1996. In connection with the Merger, the
Company purchased all outstanding options under the Solon Stock Option Plan
for approximately $34,000.

COMPENSATION OF DIRECTORS

Upon consummation of the Offering, each non-employee director shall receive
a $15,000 annual retainer, which shall cover attendance at four quarterly
meetings of the Board, and $500 for any committee meeting

47
<PAGE>

attended on a day other than a Board meeting. Outside directors are also
reimbursed for out-of-pocket expenses incurred in connection with attending
meetings. Directors who are employees of the Company receive no director's
compensation.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The Company did not have a compensation committee during fiscal 1995. The
functions of a compensation committee were performed by the Board. The
compensation for the executive officers for fiscal 1995 and for the year ended
March 29, 1996 was fixed by employment agreements between such executive
officers and the Company and/or by the Board. Messrs. Kerrigan and Blatt, each
of whom are executive officers of the Company, served on the Board and
participated in deliberations of the Board concerning executive officer
compensation, except with respect to their own compensation. See "--Committees
of the Board."

COMMITTEES OF THE BOARD OF DIRECTORS

Following the consummation of the Offering, the Board will establish an
Audit Committee and a Compensation Committee.

Audit Committee

The Audit Committee shall consist of three directors, two of whom shall be
independent directors. The Audit Committee will be responsible for policies,
procedures and other matters relating to accounting, internal financial
controls and financial reporting, including the engagement of independent
auditors and the planning, scope, timing and cost of any audit and any other
services they may be asked to perform, and will review with the auditors their
report on the Company's financial statements following completion of each such
audit.

Compensation Committee

The Compensation Committee shall consist of three directors, two of whom
shall be independent directors. The Compensation Committee is responsible for
policies, procedures and other matters relating to compensation and benefits
of the executive officers as a group and the chief executive officer
individually.

48
<PAGE>

PRINCIPAL STOCKHOLDERS

Prior to the Offering, the Company's authorized capital stock consisted of:
(i) 85,000 shares of Class A common stock, par value $.01 per share ("Class A
Common Stock"), 77,388 of which were issued and outstanding; (ii) 15,000
shares of Class B common stock, par value $0.01 per share ("Class B Common
Stock"), 14,929 of which were issued and outstanding; (iii) 13,243 shares of
Class C common stock, par value $0.01 per share ("Class C Common Stock"),
13,242.915 of which were issued and outstanding; (iv) 13,243 shares of Class D
common stock, par value $.01 per share ("Class D Common Stock"), no shares of
which were issued and outstanding; (v) 7,612 shares of Class E common stock,
par value $.01 per share (the "Class E Common Stock"), 7,612 of which were
issued and outstanding; (vi) 133,901 shares of Class F common stock, par value
$.01 per share (the "Class F Common Stock"), 133,900.585 of which were issued
and outstanding; (vii) 26,833 shares of Class G common stock, par value $.01
per share ("Class G Common Stock"), 25,100.95 of which were issued and
outstanding; and (viii) 10,000 shares of preferred stock, no shares of which
were issued and outstanding.

The following table sets forth certain information regarding the beneficial
ownership of the Company's equity securities as of the date of this Prospectus
(x) prior to giving effect to the Offering and (y) after giving effect to the
Offering, in each case: (i) by each person who is known by the Company to own
beneficially more than 5% of the Common Stock, (ii) by each current director
of the Company, (iii) by each Named Executive Officer, and (iv) by all
officers and directors of the Company as a group. The numbers of shares shown
for each listed stockholder are based on the initial public offering price of
$14.00 per share. The allocation of the aggregate number of outstanding shares
of Common Stock among the various stockholders will depend upon the actual
initial public offering price and the actual closing date, which may vary from
such assumptions. Except as otherwise indicated below, management believes
that each of the persons named in the table below has sole voting and
investment power with respect to the securities beneficially owned by it or
him as set forth opposite its or his name.

<TABLE>
<CAPTION>
COMMON STOCK COMMON STOCK
BENEFICIAL OWNERSHIP BENEFICIAL OWNERSHIP
PRIOR TO THE OFFERING(1) AFTER THE OFFERING(2)
----------------------------- ----------------------
NAE AND ADDRESS OFM NUMBER OF NUMBER OF
ENEFICIAL OWNERB SHARES PERCENT SHARES PERCENT
- ------------------- -------------- ----------- ------------ ---------
<S> <C> <C> <C> <C>
Golder, Thoma, Cressey, 4,556,114 72.31% 4,556,114 43.72%
Rauner Fund IV, L.P....
6100 Sears Tower
Chicago, IL 60606
Stephen R. Kerrigan(3).. 442,712(4) 7.03% 504,013 4.84%
c/o Coinmach Laundry
Corporation
55 Lumber Road
Roslyn, NY 11576
Mitchell Blatt.......... 396,292(5) 6.29% 396,292 3.80%
c/o Coinmach Laundry
Corporation
55 Lumber Road
Roslyn, NY 11576
Robert M. Doyle......... 109,190(6) 1.73% 123,494 1.19%
c/o Coinmach Laundry
Corporation
55 Lumber Road
Roslyn, NY 11576
John E. Denson.......... -- -- 5,721 *
c/o Coinmach Laundry
Corporation
55 Lumber Road
Roslyn, NY 11576
</TABLE>

49
<PAGE>

<TABLE>
<CAPTION>
COMMON STOCK COMMON STOCK
BENEFICIAL OWNERSHIP BENEFICIAL OWNERSHIP
PRIOR TO THE OFFERING(1) AFTER THE OFFERING(2)
-------------------------- ----------------------
NAE AND ADDRESS OFM NUMBER OF NUMBER OF
ENEFICIAL OWNERB SHARES PERCENT SHARES PERCENT
- ------------------- -------------- ----------- ------------ ---------
<S> <C> <C> <C> <C>
Michael E. Stanky.......... 46,866 * 67,463 *
c/o Coinmach Laundry
Corporation
55 Lumber Road
Roslyn, NY 11576
Bruce V. Rauner(7)......... 4,556,114 72.31% 4,556,114 43.72%
Golder, Thoma, Cressey,
Rauner Fund IV, L.P.
6100 Sears Tower
Chicago, IL 60606
David A. Donnini(8)........ 4,556,114 72.31% 4,556,114 43.72%
Golder, Thoma, Cressey,
Rauner Fund IV, L.P.
6100 Sears Tower
Chicago, IL 60606
James N. Chapman........... 18,883 * 24,604 *
c/o Coinmach Laundry
Corporation
55 Lumber Road
Roslyn, NY 11576
All directors and executive
officers as a group (ten
persons).................. 5,570,057 88.40% 5,689,143 54.59%
</TABLE>
- --------
* Represents less than 1% of the outstanding Common Stock of the Company.

(1) Based on 6,301,174 shares of Common Stock and Non-Voting Common Stock
outstanding prior to the Offering and after giving effect to the
Reclassification and Stock Split.

(2) Based on 10,421,174 shares of Common Stock and Non-Voting Common Stock
outstanding after the Offering without giving effect to any shares of
Common Stock that may be issued pursuant to the Underwriters' over-
allotment option. Includes, for each party listed, such party's portion of
the Additional Options or MCS Capital Options, as applicable, which are
currently vested and exercisable.

(3) Mr. Kerrigan owns his shares beneficially through MCS Capital, Inc.

(4) Includes 32,612 shares of Class B Common Stock, as adjusted for the Stock
Split, issued to MCS Capital, Inc. subsequent to fiscal 1996 year end.

(5) Includes 32,612 shares of Class B Common Stock, as adjusted for the Stock
Split, issued to Mr. Blatt subsequent to fiscal 1996 year end.

(6) Includes 13,805 shares of Class B Common Stock, as adjusted for the Stock
Split, issued to Mr. Doyle subsequent to fiscal 1996 year end.

(7) All such shares are held by GTCR of which GTCR IV is the general partner.
Mr. Rauner is a principal of Golder, Thoma, Cressey, Rauner, Inc., the
general partner of GTCR IV. Mr. Rauner disclaims beneficial ownership of
such shares.

(8) All such shares are held by GTCR of which GTCR IV is the general partner.
Mr. Donnini is a principal of Golder, Thoma, Cressey, Rauner, Inc., the
general partner of GTCR IV. Mr. Donnini disclaims beneficial ownership of
such shares.

50
<PAGE>

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

MANAGEMENT AND CONSULTING SERVICES AGREEMENTS

On July 26, 1995, the Company and GTCR IV entered into a Management and
Consulting Services Agreement (the "Company Management Agreement"), pursuant
to which the Company engaged GTCR IV as a financial and management consultant
to consult with the Board on such business and financial matters as may have
been reasonably requested from time to time by the Board, including corporate
strategy, budgeting, corporate investments, acquisition and divestiture
strategies and debt and equity financings. The Company was required to pay to
GTCR IV an annual management fee in the amount of $100,000 per year, which
amount was subject to increase from time to time until GTCR IV ceased to own
at least 33% of the outstanding common stock of the Company. Prior to the
Merger, TCC and GTCR IV entered into a Management and Consulting Services
Agreement (the "TCC Management Agreement") on the same terms and conditions as
the Company Management Agreement. In connection with the Merger on November
30, 1995, (i) the TCC Management Agreement was terminated and (ii) the Company
Management Agreement was amended and restated to provide, among other things,
for an annual management fee of $200,000. GTCR has agreed to terminate the
Company Management Agreement in exchange for $500,000.

STOCKHOLDER AGREEMENTS OF TCC AND THE COMPANY

On January 31, 1995, TCC and the stockholders of TCC at such time entered
into a Stockholders Agreement (the "TCC Stockholders Agreement"). Effective
November 30, 1995, (i) such stockholders received shares of capital stock of
the Company in accordance with the terms and conditions of the Agreement and
Plan of Merger, dated November 30, 1995 (the "Merger Agreement"), and (ii) the
TCC Stockholders Agreement was terminated. The terms of the TCC Stockholders
Agreement were substantially similar to the terms of the SAS Stockholders
Agreement entered into by the Company, GTCR and the SAS Stockholders. The SAS
Stockholders Agreement will terminate upon consummation of the Offering. See
"Management."

In connection with the Offering, the holders of Common Stock of the Company
prior to the Offering, who, after consummation of the Offering will own in the
aggregate approximately 60.5% of the outstanding Common Stock will enter into
the Voting Agreement, providing for, among other things, the designation and
nomination of directors of the Company by such stockholders. See "Management."
Under the Voting Agreement, each of the stockholders party to the Voting
Agreement will agree to vote its shares in favor of the individuals designated
below and to cause such individuals to be selected as nominees to the Board,
in accordance with the Bylaws of the Company, as amended, with the effect
that, at any given time, the directors of the Company shall initially be
comprised of: (i) two individuals designated by GTCR, (ii) two members of the
Company's management or employees or officers of the Company, in each case,
designated by the holders of a majority of the Common Stock held by the
executive officers (the "Executives") of the Company, which individuals
initially shall be Stephen R. Kerrigan (the "Management Director") and
Mitchell Blatt ("Blatt" and together with the Management Director, the
"Executive Directors") (the designation of the Executive Director that will be
the Management Director shall be determined by the holders of a majority of
the Common Stock held by the Executives), and (iii) one individual to be
jointly designated by GTCR and the Management Director, who initially shall be
James N. Chapman. Each director nominated by parties to the Voting Agreement
may be removed only at the request of the party who nominated such director.
The Voting Agreement terminates at such time as GTCR and its affiliates cease
to own at least 20% of the Common Stock. The stockholders who are parties to
the Voting Agreement will hold, in the aggregate, a substantial amount of the
voting power of the Company and thus, if acting in unison or in various
combinations, could likely be able to elect a majority of the directors of the
Company even if the Voting Agreement were not in place.

REGISTRATION RIGHTS AGREEMENTS OF TCC AND THE COMPANY

On July 26, 1995, the SAS Stockholders and the Company entered into a
registration rights agreement (the "Company Registration Agreement") pursuant
to which the SAS Stockholders were granted certain rights with respect to the
registration under the Securities Act, for resale to the public, of their
respective Registrable Securities (as defined in the Company Registration
Agreement). The Company Registration Agreement provides

51
<PAGE>

that, among other things, at any time after the Company has completed an
Initial Public Offering (as defined in the Company Registration Agreement),
GTCR has the right to "demand" registrations under the Securities Act with
respect to all or a portion of GTCR's Registrable Securities. The Company
Registration Agreement also provides for customary provisions regarding: (i)
the priority among holders of securities with respect to the number of shares
to be registered pursuant to any demand or piggyback registration; and (ii)
indemnification by the Company of the holders of Registrable Securities.

Other holders of Registrable Securities are entitled to include in such
registration all Registrable Securities with respect to which the Company has
received written requests for inclusion therein, subject to certain
limitations, including priority provisions (the "Piggyback Rights"). In
connection with the Offering and conditioned upon the consummation thereof,
the holders of the Registrable Securities have agreed to waive their Piggyback
Rights under the Company Registration Agreement. Additionally, each holder of
Registrable Securities has agreed not to effect any public sale or
distribution of such securities during the seven days prior to and the 180-day
period commencing on the effective date of the Offering (the "Lock-up Period")
without the consent of the Underwriters.

Prior to the Merger, TCC, GTCR and the SAS Stockholders entered into a
Registration Agreement (the "TCC Registration Agreement"), dated as of January
31, 1995. The TCC Registration Agreement provided the parties thereto the same
rights on the same terms and conditions with respect to TCC that such parties
have under the Company Registration Agreement with respect to the Company. In
connection with the Merger, the shareholders of TCC received shares of capital
stock of the Company in accordance with the terms and conditions of the Merger
Agreement, and the TCC Registration Agreement was terminated on November 30,
1995.

CERTAIN LOANS TO MEMBERS OF MANAGEMENT OF SOLON AND TCC

In order to finance, in part, their purchase of shares of Common Stock
(prior to the Reclassification), certain executive officers of the Company
obtained loans from the Company.

On January 31, 1995, promissory notes in the principal amount of $140,000
were executed by each of MCS Capital, Inc. (which was guaranteed by Mr.
Kerrigan) and Mr. Blatt (the "TCC Executive Notes"), in favor of the Company
in connection with the purchase by each of them of 6,000 shares of common
stock (prior to the Reclassification), each as amended by the Omnibus
Agreement. Pursuant to the TCC Executive Notes, each of MCS Capital, Inc. and
Mr. Blatt are obligated to repay such notes in four equal annual installments
commencing June 1, 1996. Interest on the TCC Executive Notes accrues at a rate
equal to 8% per annum and is payable at such time as the principal of such
notes become due and payable.

On July 26, 1995, promissory notes in the principal amount of $52,370 were
executed by each of MCS Capital, Inc. (which was guaranteed by Mr. Kerrigan)
and Mr. Blatt (the "Company Executive Notes") in favor of the Company in
connection with the purchase by each of them of 4,000 shares of common stock
(prior to the Reclassification), each as amended by the Omnibus Agreement.
Pursuant to the Company Executive Notes, each of MCS Capital, Inc. and Mr.
Blatt are obligated to repay such notes in eight equal annual installments
commencing July 26, 1996. Interest on the Company Executive Notes accrues at a
rate equal to 8% per annum and is payable at such time as the principal of
such notes become due and payable.

The Board has determined that upon consummation of the Offering, the Company
shall forgive the first of the four equal annual installments of the
indebtedness evidenced by the TCC Executive Notes and the first of the eight
equal annual installments of the indebtedness evidenced by the Company
Executive Notes, including the accrued and unpaid interest thereon, which
indebtedness, including accrued and unpaid interest thereon, aggregates
approximately $89,740.

52
<PAGE>

CERTAIN LOANS TO MEMBERS OF MANAGEMENT OF THE COMPANY

In order to finance the establishment of the Company's corporate development
office in Charlotte, North Carolina, the Board may approve loans to Mr.
Kerrigan (in an amount not to exceed $500,000) and to certain other members of
management to cover moving and other related expenses.

GRANT OF OPTIONS

In connection with the Offering, the Board shall approve the granting of (i)
the MCS Capital Options to MCS Capital, Inc., an entity beneficially owned by
Mr. Kerrigan, to purchase up to 306,505 shares of Common Stock (representing
approximately 2.5% of the Common Stock and Non-Voting Common Stock outstanding
after giving effect to the Offering, on a fully diluted basis), and (ii) the
Additional Options to Messrs. Doyle, Stanky, Denson, Siegel, Osborne and
Chapman to purchase up to 71,518; 102,985; 28,607; 28,607; 28,607; and 28,607,
shares of Common Stock, respectively (representing an aggregate of
approximately 2.4% of the Common Stock and Non-Voting Common Stock outstanding
after giving effect to the Offering, on a fully diluted basis). Twenty percent
(20%) of each of the MCS Capital Options and the Additional Options granted
upon the consummation of the Offering will vest on such date, with an
additional twenty percent (20%) of such options vesting on each successive
anniversary of the date of grant. The MCS Capital Options and Additional
Options are exercisable at any time after vesting at a per share price
representing a 15% discount to the initial public offering price in the
Offering.

INTERCOMPANY LOAN

On July 26, 1995, as part of the financing for the Solon Acquisition, TCC
loaned the Company $2.0 million at the then-applicable interest rate contained
in the Company's then existing credit facility. As of March 29, 1996, the
principal balance outstanding under the Company's loan was approximately $1.4
million.

THE COMPANY AND TCC STOCK PURCHASE AGREEMENTS

On January 31, 1995 and July 26, 1995, TCC and the Company, respectively,
entered into Equity Purchase Agreements with GTCR, pursuant to which GTCR
became a securityholder of more than five percent of TCC's and the Company's
voting securities (the "GTCR Purchase Agreements"). In consideration for the
issuance of such voting securities, GTCR paid approximately $10,500,000 to TCC
and approximately $5,517,582 to the Company. In connection with the Merger,
the GTCR Purchase Agreements were subsequently amended by the Omnibus
Agreement, whereby, among other things, (i) obligations of TCC thereunder were
assigned to and assumed by the Company, and (ii) such agreements were in all
other respects amended appropriately to contemplate the transactions effected
in connection with the Merger and Refinancing.

Additionally, the GTCR Purchase Agreements contain certain restrictions on
the Company's ability to, among other things, pay any dividends or make any
distributions upon any of its equity securities or redeem, purchase or acquire
any of the Company's equity securities without the prior written consent of
the holders of a majority of the holders of Investor Stock (as defined in the
GTCR Purchase Agreements). The Company has obtained contents from such holders
in connection with each of the transactions contemplated by the Offering.

On January 31, 1995, TCC, GTCR and each of MCS Capital, Inc., a Delaware
corporation controlled by Mr. Kerrigan ("MCS"), MCS Capital Management, Inc.,
a Delaware corporation controlled by Mr. Kerrigan ("MCS Management") and
President and Fellows of Harvard College ("Harvard") entered into Investor
Purchase Agreements, pursuant to which such parties became securityholders of
capital stock of TCC (collectively, the "TCC Management Purchase Agreements").
In consideration for the issuance of such capital stock, MCS, MCS Management
and Harvard paid $38,805.43, $176,362.00 and $349,972.85, respectively. On
July 26, 1995, the Company, GTCR and the SAS Stockholders entered into an
Investor Purchase Agreement, pursuant to which such parties became
securityholders of capital stock of the Company (the "Investor Purchase
Agreement", together with the TCC Management Purchase Agreements, the
"Management Purchase Agreements"). In consideration for the issuance of such
capital stock pursuant to the Investor Purchase

53
<PAGE>

Agreement, Heller, Jackson National Life Insurance Company and MCS paid
$291,047.06, $261,911.77 and $113,100, respectively. In connection with the
Merger, the Management Purchase Agreements were subsequently amended by the
Omnibus Agreement, whereby, among other things, (i) obligations of TCC
thereunder were assigned to and assumed by the Company, and (ii) such
agreements were in all other respects amended appropriately to contemplate the
transactions effected in connection with the Merger and Refinancing.

ISSUANCE OF PREFERRED STOCK AND COMMON STOCK IN THE RECLASSIFICATION

As part of the reclassification of the Company's issued and outstanding
capital stock in connection with the Offering, holders of Class A Common
Stock, Class E Common Stock and Class F Common Stock will be issued shares of
Preferred Stock (or, in the case of such holders who are members of the
Company's management, Common Stock) representing: (i) the Unpaid Yield with
respect to the Preferred Shares in an aggregate amount of $1,793,439 (assuming
a closing of the Offering on June 30, 1996); plus (ii) the Preferred
Investment with respect to the Preferred Shares in an aggregate amount of
$17,339,062. See "Description of Capital Stock--The Reclassification and Stock
Split." Set forth below are the number of shares of Preferred Stock and Common
Stock, after giving effect to the Reclassification and the Stock Split, to be
issued to the holders listed below of the Preferred Shares:

<TABLE>
<CAPTION>
Stockholder Preferred Stock Common Stock
<S> <C> <C>
GTCR............................................ 924.5 --
Heller Financial, Inc........................... 16.4 --
Jackson National Life Insurance Company......... 16.4 --
James N. Chapman................................ 3.8 --
MCS Capital, Inc................................ -- 16,732
Mitchell Blatt.................................. -- 6,969
Robert M. Doyle................................. -- 2,114
Michael E. Stanky............................... -- 2,500
</TABLE>

54
<PAGE>

DESCRIPTION OF CAPITAL STOCK

GENERAL MATTERS

Upon completion of the Offering, the total amount of authorized capital
stock of the Company will consist of (i) 1,000,000 shares of Preferred Stock,
of which 1,000 will be issued and outstanding immediately prior to the
Offering and subsequently redeemed in connection with the Offering, see "Use
of Proceeds," (ii) 15,000,000 shares of Common Stock, of which 9,940,526
shares will be issued and outstanding, and (iii) 1,000,000 shares of Non-
Voting Common Stock, of which 480,648 shares will be issued and outstanding
prior to giving effect to the exercise of any options to purchase Non-Voting
Common Stock granted by the Company. The Company's Third Amended and Restated
Certificate of Incorporation and Second Amended and Restated Bylaws, upon
stockholder approval, will become effective upon consummation of the Offering.
The discussion herein describes the Company's capital stock and certain
material provisions of the Third Amended and Restated Certificate of
Incorporation and the Second Amended and Restated Bylaws anticipated to be in
effect upon consummation of the Offering. The following discussion does not
purport to be complete and is subject to, and qualified in its entirety by,
the Third Amended and Restated Certificate of Incorporation and the Second
Amended and Restated Bylaws of the Company that are included as exhibits to
the Company's Form S-1 Registration Statement filed under the Securities Act
(the "Registration Statement") of which this Prospectus forms a part and by
the provisions of applicable law.

PREFERRED STOCK

As part of the reclassification of the Company's issued and outstanding
capital stock to take place immediately prior to the Offering, the Company
shall issue an aggregate of 1,000 shares of Preferred Stock, having the
rights, preferences and limitations set forth in the Company's Certificate of
Powers, Designations, Preferences and Relative, Participating, Optional and
other Special Rights of Preferred Stock and Qualifications, Limitations and
Restrictions thereof. Holders of Preferred Stock are entitled to (i)
cumulative dividends, based upon an 8% yield on the stated amount of such
Preferred Stock, before any dividends may be paid on the Common Stock and (ii)
a liquidation preference equal to the stated amount of such Preferred Stock
upon liquidation of the Company. The shares of Preferred Stock are redeemable
at the Company's option at any time and are expected to be redeemed by the
Company from a portion of the net proceeds received by the Company from the
Offering in an aggregate amount of $19,132,501 (assuming a closing of the
Offering on June 30, 1996).

In accordance with the provisions of the Company's Third Amended and
Restated Certificate of Incorporation, the Board may, without further action
by the Company's stockholders, from time to time, direct the issuance of
shares of preferred stock in one or more series and may, at the time of
issuance, determine the rights, preferences and limitations of each series.
Satisfaction of any dividend preferences of outstanding shares of preferred
stock (including the Preferred Stock to the extent not fully redeemed after
the Offering) would reduce the amount of funds available for the payment of
dividends on shares of Common Stock and Non-Voting Common Stock. Holders of
shares of preferred stock (including the Preferred Stock) to the extent not
fully redeemed after the Offering) may be entitled to receive a preference
payment in the event of any liquidation, dissolution or winding-up of the
Company before any distribution is made to the holders of shares of Common
Stock and Non-Voting Common Stock. Under certain circumstances, the issuance
of shares of preferred stock may render more difficult or tend to discourage
or delay a merger, tender offer or proxy contest, the assumption of control by
a holder of a large block of the Company's securities or the removal of
incumbent management. The Board, without stockholder approval, may issue
shares of preferred stock with voting and conversion rights which could
adversely affect the holders of Common Stock and Non-Voting Common Stock. The
Company has no present intention of issuing any shares of preferred stock in
the foreseeable future.

COMMON STOCK

Holders of Common Stock are entitled to one vote per share in the election
of directors and on all other matters submitted to a vote of stockholders and
do not have cumulative voting rights. Holders of a majority of

55
<PAGE>

the shares of Common Stock voting for the election of directors therefore can
elect all of the directors of the Company.

Following consummation of the Offering, the shares of Common Stock will not
be redeemable, and the holders thereof will have no preemptive or conversion
rights or other subscription rights to purchase any securities of the Company.
There are also no redemption or sinking fund provisions applicable to the
Common Stock. All shares of Common Stock to be outstanding upon completion of
the Offering contemplated by this Prospectus will be validly issued, fully
paid and non-assessable.

Subject to preferences that may be applicable to any outstanding preferred
stock, the holders of Common Stock are entitled to receive ratably such
dividends, if any, as may be declared from time to time by the Board out of
funds legally available therefor. See "Dividend Policy." In the event of
liquidation, dissolution or winding up of the Company, the holders of Common
Stock are entitled to receive, after payment of the Company's debts and
liabilities, the remaining assets of the Company on a ratable basis. This
right, however, is subject to: (i) any prior liquidation rights of preferred
stock then outstanding (to the extent such rights are designated by the Board)
and (ii) any rights of holders of preferred stock to share ratably with
holders of Common Stock in all assets remaining after payment of liabilities
and liquidation preferences (to the extent such rights are designated by the
Board).

The Company has applied to list the Common Stock for quotation on the Nasdaq
National Market under the trading symbol "WDRY." Prior to the Offering, there
has been no public market for the Common Stock, and no assurance can be given
that a significant public market for the Common Stock will develop or be
sustained after the Offering.

NON-VOTING COMMON STOCK

Except as required by applicable law, the holders of Non-Voting Common Stock
are not entitled to vote in the election of directors or on any other matters
submitted to a vote of stockholders. Except for the restrictions on ownership,
voting and conversion, the Non-Voting Common Stock is substantially similar to
the Common Stock.

THE RECLASSIFICATION AND STOCK SPLIT

Prior to the consummation of the Offering, the Company shall approve a
reclassification (the "Reclassification") of its capital stock pursuant to
which all seven classes of the issued and outstanding capital stock prior to
the Offering will be converted into a class of Preferred Stock, a class of
Common Stock and a class of Non-Voting Common Stock, in each case, in the
manner set forth in a reclassification agreement among the Company and its
stockholders. Pursuant to such Reclassification, (i) holders of all classes of
the Company's common stock outstanding shall receive shares of either Common
Stock or Non-Voting Common Stock in an amount equal to the aggregate number of
shares of all classes of common stock held by such holder; and (ii) holders of
certain classes of the Company's common stock shall also receive shares of
Preferred Stock or additional shares of Common Stock as more fully described
below.

Pursuant to the Company's certificate of incorporation in effect prior to
the Offering, holders of Class A Common Stock, Class E Common Stock and Class
F Common Stock (together, the "Preferred Shares") were entitled to receive
distributions (any such distribution, a "Distribution") on such Preferred
Shares in the following manner: (i) first, an amount equal to the accrued
yield (at a rate of 8% per annum, compounded quarterly) on the respective
unreturned original value (original basis in investment) of such Preferred
Shares on the date such Distribution is made (the "Unpaid Yield"); (ii)
second, an amount equal to the respective unreturned original value (original
basis in investment) of such Preferred Shares (the "Preferred Investment");
and (iii) third, the balance, if any, of such Distribution ratably with all
other classes of the Company's common stock.

In order to enable holders of Preferred Shares (other than members of the
Company's management) to realize the value of the Unpaid Yield and the
Preferred Investment to which such holders are entitled, the Company shall
issue to such holders shares of Preferred Stock in an amount equal to the sum
of: (i) the Unpaid

56
<PAGE>

Yield, in an aggregate amount of $1,793,439 (assuming a closing of the
Offering on June 30, 1996); plus (ii) the Preferred Investment, in an
aggregate amount of $17,339,062. Such holders of Preferred Shares shall
realize the economic value of the Unpaid Yield and the Preferred Investment
through a redemption of the Preferred Stock from a portion of the proceeds of
the Offering. See "Use of Proceeds." Holders of Preferred Shares who are
members of the Company's management shall receive shares of Common Stock in an
amount equal to (a) the sum of their Unpaid Yield plus their Preferred
Investment, divided by (b) the initial offering price of the Common Stock.

In connection with the Reclassification, the Company shall also approve an
approximate 23.0-to-1 stock split (the "Stock Split"), effected in the form of
a stock dividend, payable to stockholders of record on July 12, 1996. Without
giving effect to the Offering, and as adjusted by the Reclassification and
Stock Split, there shall be issued and outstanding (i) 1,000 shares of
Preferred Stock, (ii) 5,713,182 shares of Common Stock, and (iii) 480,648
shares of Non-Voting Common Stock.

PAYMENT OF DIVIDENDS ON THE COMMON STOCK

Subject to the prior rights of the holders of any Preferred Stock, the
holders of outstanding shares of Common Stock and Non-Voting Common Stock are
entitled to receive dividends out of assets legally available therefor at such
times and in such amounts as the Board may from time to time determine. See
"Dividend Policy."

CERTAIN PROVISIONS OF THE THIRD AMENDED AND RESTATED CERTIFICATE OF
INCORPORATION AND SECOND AMENDED AND RESTATED BYLAWS AND STATUTORY PROVISIONS

The Third Amended and Restated Certificate of Incorporation to be effective
upon consummation of the Offering and the Second Amended and Restated Bylaws
of the Company contain provisions that could have an anti-takeover effect.
These provisions are intended to enhance the likelihood of continuity and
stability in the composition of the Board and in the policies formulated by
the Board and to discourage certain types of transactions which may involve an
actual or threatened change of control of the Company. The provisions are
designed to reduce the vulnerability of the Company to an unsolicited takeover
proposal that does not contemplate the acquisition of all its outstanding
shares or an unsolicited proposal for the restructuring or sale of all or part
of the Company.

The Third Amended and Restated Certificate of Incorporation will provide
that the Board will be divided into three classes, with each class, after a
transitional period, serving for three years, and one class being elected each
year. A majority of the remaining directors then in office, though less than a
quorum, or the sole remaining director, will be empowered to fill any vacancy
on the Board which arises during the term of a director. The provision for a
classified Board may be amended, altered or repealed only upon the affirmative
vote of the holders of at least 80% of the outstanding shares of the voting
stock of the Company. The classification of the Board may discourage a third
party from making a tender offer or otherwise attempting to gain control of
the Company and may have the effect of maintaining the incumbency of the
Board. Since the Board has the power to retain and discharge officers of the
Company, these provisions could also make it more difficult for existing
shareholders or another party to effect a change in management.

The Third Amended and Restated Certificate of Incorporation will require
that any action required or permitted to be taken by the Company's
stockholders must be effected at a duly called annual or special meeting of
stockholders and may not be effected in lieu thereof by written consent unless
a majority of the Board approves the use of such written consent with respect
to the taking of such action. This provision makes it difficult for
stockholders to initiate or effect an action by written consent, and thereby
effect an action opposed by the Board. Additionally, the Third Amended and
Restated Certificate of Incorporation will require that special meetings of
the stockholders of the Company be called by the chairman of the Board, the
president of the Corporation or the Board pursuant to a resolution adopted by
the affirmative vote of at least two members of the Board then in office.

The Second Amended and Restated Bylaws will provide that stockholders
seeking to bring business before or to nominate directors at any annual
meeting of stockholders must provide timely notice thereof in writing. To be
timely, a stockholder's notice must be delivered to, or mailed and received
at, the principal executive offices

57
<PAGE>

of the Company not less than 60 days nor more than 90 days prior to such
meeting or, if less than 70 days' notice was given for the meeting, within 10
days following the date on which such notice was given. The Second Amended and
Restated Bylaws also will specify certain requirements for a stockholder's
notice to be in proper written form. These provisions will restrict the
ability of stockholders to bring matters before the stockholders or to make
nominations for directors at meetings of stockholders.

The Third Amended and Restated Certificate of Incorporation further provides
that the Board, by a majority vote, may adopt, alter, amend or repeal
provisions of the Second Amended and Restated Bylaws. However, stockholders
may only adopt, alter, amend or repeal provisions of the Second Amended and
Restated Bylaws by a vote of 66 2/3% or more of the outstanding Common Stock,
except for certain provisions which shall require a vote of 75% or more of the
outstanding Common Stock.

Following the consummation of the Offering, the Company will be subject to
the "business combination" provisions of the Delaware General Corporation Law.
In general, such provisions prohibit a publicly held Delaware corporation from
engaging in various "business combination" transactions with any Interested
Stockholder (defined as a person who, together with its affiliates and
associates, owns (or within the three prior years did own) 15% or more of the
corporation's outstanding voting stock) for a period of three years after the
date of the transaction in which the person became an Interested Stockholder,
unless (i) the transaction is approved by the Board prior to the date the
Interested Stockholder obtained such status, (ii) upon consummation of the
transaction which resulted in the stockholder becoming an Interested
Stockholder, the Interested Stockholder owned at least 85% of the voting stock
of the corporation outstanding at the time the transaction commenced,
excluding for purposes of determining the number of shares outstanding those
shares owned by (a) persons who are directors and also officers and (b)
employee stock plans in which employee participants do not have the right to
determine confidentially whether shares held subject to the plan will be
tendered in a tender or exchange offer, or (iii) on or subsequent to such date
the "business combination" is approved by the Board and authorized at an
annual or special meeting of stockholders by the affirmative vote of at least
66 2/3% of the outstanding Common Stock which is not owned by the Interested
Stockholder. A "business combination" is defined to include mergers, asset
sales and other transactions resulting in financial benefit to a stockholder.
The statute could prohibit or delay mergers or other takeover or change in
control attempts with respect to the Company and, accordingly, may discourage
attempts to acquire the Company. See "Risk Factors--Anti-Takeover
Considerations."

TRANSFER AGENT AND REGISTRAR

The Transfer Agent and Registrar for the Common Stock is The Bank of New
York.

58
<PAGE>

SHARES ELIGIBLE FOR FUTURE SALE

Upon the closing of the Offering, there will be 9,940,526 shares of Common
Stock and 480,648 shares of Non-Voting Common Stock outstanding prior to
giving effect to the exercise of the options granted by the Company. The
4,120,000 shares of Common Stock sold in the Offering will be freely tradeable
without restriction or further registration under the Securities Act, unless
held by an "affiliate" of the Company as that term is defined in Rule 144
under the Securities Act, which shares will be subject to the resale
limitations of Rule 144. Of the outstanding shares of Common Stock and Non-
Voting Common Stock, 6,301,174 will not have been registered under the
Securities Act and may not be sold unless they are registered or unless an
exemption from registration is available such as the exemption provided by
Rule 144 or, to the extent applicable, Rule 701. All of such unregistered
shares would be eligible for sale on expiration of a 180 day lockup period,
subject to certain volume and other resale limitations under Rule 144.

In general, under Rule 144 as currently in effect, a stockholder (or
stockholders whose shares are aggregated) who has beneficially owned shares
constituting "restricted securities" (generally defined as securities acquired
from the Company or an affiliate of the Company in a non-public transaction)
for at least two years is entitled to sell within any three-month period a
number of shares that does not exceed the greater of (i) one percent of then
outstanding Common Stock and Non-Voting Common Stock (104,212 shares of Common
Stock immediately after the Offering without giving effect to additional
shares issued pursuant to the Underwriters' over-allotment option) or (ii) the
average weekly reported trading volume in the Common Stock during the four
calendar weeks preceding the date on which notice of such sale is filed
pursuant to Rule 144. Sales under Rule 144 are also subject to certain
provisions regarding the manner of sale, notice requirements and the
availability of current public information about the Company. A stockholder
(or stockholders whose shares are aggregated) who is not an affiliate of the
Company for at least 90 days prior to a sale and who has beneficially owned
"restricted securities" for at least three years is entitled to sell such
shares under Rule 144 without regard to the limitations described above. In
June 1995, the Commission proposed shortening such three-year holding period
to two years and the two-year holding period to one year.

In general, under Rule 701 under the Securities Act, as currently in effect,
any employee, officer, or director of or consultant to the Company who
purchased his or her shares pursuant to a written compensatory plan or
contract is entitled to rely on the resale provisions of Rule 701. Such
provisions permit nonaffiliates to sell their Rule 701 shares without having
to comply with the public information, holding period, volume limitation, or
notice provisions of Rules 144 and permit affiliates to sell their Rule 701
shares without having to comply with the Rule 144 holding period restrictions.

The Company, its executive officers and directors, its pre-Offering
stockholders and certain other members of management of the Company who are
stockholders have agreed not to offer, sell, contract to sell or otherwise
dispose of any shares of Common Stock or rights to acquire such shares or
securities convertible into or exchangeable for Common Stock other than sales
contemplated hereby or issued or to be issued pursuant to employee stock
option plans or in connection with other employee incentive compensation
arrangements or agreements, in each case in effect on the date of this
Prospectus, for a period of 180 days after the date of this Prospectus,
without the prior written consent of Lehman Brothers, Inc., as a
representative of the Underwriters.

Pursuant to the Company Registration Agreement, the pre-Offering
stockholders of the Company, who will hold in the aggregate 6,301,174 shares
of Registrable Securities following the Offering, are entitled to certain
registration rights. At any time following the Offering, GTCR may request
registration of all or a portion of the Registrable Securities it holds on
Form S-1 (a "Long-Form Registration") and may request registration on Form S-2
or S-3 ("Short-Form Registration"), if available. GTCR is entitled to request
up to four Long-Form Registrations and an unlimited number of Short-Form
Registrations. The Company is responsible for all registration expenses in
connection with all such registrations. Additionally, if the Company proposes
to register any of its Common Stock under the Securities Act, whether for its
own account or otherwise, all holders of Registrable Securities are entitled
to notice of such registration and, subject to certain priority provisions,
are entitled to include their Registrable Securities in such registration. The
registration expenses of the holders of

59
<PAGE>

Registrable Securities would be paid by the Company in all such registrations.
The holders of Registrable Securities have agreed to waive their rights under
the Company Registration Agreement to include their Registrable Securities in
the Offering. Additionally, each holder of Registrable Securities has agreed
not to effect any public sale or distribution of such securities during the
Lock-up Period.

Prior to the Offering, there has been no public market for shares of Common
Stock, and no assurance can be given that such a market will develop or, if it
develops, will be sustained after the Offering or that the purchasers of the
shares will be able to resell such shares at a price higher than the initial
public offering price or otherwise. If such a market develops, no prediction
can be made as to the effect, if any, that future sales of shares, or the
availability of shares for future sale, to the public will have on the market
price of the Common Stock prevailing from time to time. Sales of substantial
amounts of Common Stock in the public market, whether such shares are
presently outstanding or subsequently issue, or the perception that such sales
could occur, could adversely affect prevailing market prices for the Common
Stock and could impair the Company's ability to raise capital in the future
through an offering of its equity securities. The Company cannot predict when
or how many of such additional shares of Common Stock may be offered for sale
or sold to the public in the future. See "Risk Factors--Shares Eligible for
Future Sale."

60
<PAGE>

UNDERWRITING

The underwriters of the Offering of the Common Stock (the "Underwriters"),
for whom Lehman Brothers Inc., Dillon, Read & Co. Inc., Lazard Freres & Co.
LLC and Fieldstone FPCG Services, L.P. are serving as representatives, have
severally agreed, subject to the terms and conditions of the Underwriting
Agreement (the "Underwriting Agreement") (the form of which is filed as an
exhibit to the Registration Statement of which this Prospectus is a part), to
purchase from the Company and the Company has agreed to sell to each
Underwriter, the aggregate number of shares of Common Stock set forth opposite
their respective names below:

<TABLE>
<CAPTION>
NUMBER
UNDERWRITERS OF SHARES
------------ ---------
<S> <C>
Lehman Brothers Inc............................................. 707,250
Dillon, Read & Co. Inc.......................................... 707,250
Lazard Freres & Co. LLC......................................... 707,250
Fieldstone FPCG Services, L.P................................... 707,250
Alex. Brown & Sons Incorporated................................. 103,000
A.G. Edwards & Sons, Inc. ...................................... 103,000
Everen Securities, Inc. ........................................ 103,000
Goldman, Sachs & Co. ........................................... 103,000
Merrill Lynch, Pierce, Fenner & Smith Incorporated.............. 103,000
Morgan Stanley & Co. Incorporated............................... 103,000
Smith Barney Inc. .............................................. 103,000
Robert W. Baird & Co. Incorporated.............................. 57,000
Doft & Co., Inc. ............................................... 57,000
Fahnestock & Co., Inc. ......................................... 57,000
Gilford Securities Incorporated................................. 57,000
McDonald & Company Securities, Inc. ............................ 57,000
Nesbitt Burns Securities Inc. .................................. 57,000
Raymond James & Associates, Inc. ............................... 57,000
Stifel, Nicolaus & Company, Incorporated........................ 57,000
Sutro & Co. Incorporated........................................ 57,000
Unterberg Harris................................................ 57,000
---------
Total....................................................... 4,120,000
=========
</TABLE>

The Underwriting Agreement provides that the obligations of the Underwriters
to purchase shares of Common Stock are subject to certain conditions and that
if any of the shares of Common Stock are purchased by the Underwriters
pursuant to the Underwriting Agreement, all shares of Common Stock agreed to
be purchased by the Underwriters pursuant to the Underwriting Agreement must
be so purchased.

The Company has been advised that the Underwriters propose to offer the
shares of Common Stock directly to the public initially at the public offering
price set forth on the cover page of this Prospectus and to certain selected
dealers (who may include the Underwriters) at such public offering price, less
a selling concession not in excess of $.56 per share. The Underwriters may
allow, and the selected dealers may reallow, a concession not in excess of
$.10 per share to certain other brokers and dealers. After the initial public
offering of the Common Stock, the concession to selected dealers and the
reallowance to other dealers may be changed by the Underwriters.

The Company has granted to the Underwriters an option to purchase up to an
additional 618,000 shares of Common Stock at the public offering price less
the aggregate underwriting discounts and commissions shown on the cover page
of this Prospectus solely to cover over-allotments, if any. The option may be
exercised at any time up to 30 days after the date of this Prospectus. To the
extent that the Underwriters exercise such option, the Underwriters will be
committed (subject to certain conditions) to purchase a number of option
shares proportionate to such Underwriter's initial commitment.

61
<PAGE>

Of the shares of Common Stock offered hereby, 200,000 shares have been
reserved (the "Reserved Shares") for sale to certain individuals, including
employees of the Company and members of their families. The Reserved Shares
will be sold at a price per share equal to the Price to Public set forth on
the cover page of this Prospectus. The number of shares available to the
general public will be reduced to the extent those persons purchase Reserved
Shares. Any shares not so purchased will be offered in the Offering at the
Price to Public set forth on the cover page of this Prospectus.

The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act, or to contribute
to payments that the Underwriters may be required to make in respect thereof.

The shares of Common Stock have been authorized for listing on the Nasdaq
National Market under the trading symbol "WDRY."

The Underwriters have informed the Company that they do not intend to
confirm sales to any account over which they exercise discretionary authority.

The Company, its existing stockholders and each of the directors and
executive officers of the Company have agreed not to offer, sell or contract
to sell, or otherwise dispose of, or announce the offering of, any shares of
Common Stock, or any securities convertible into, or exchangeable for, shares
of Common Stock, except the shares of Common Stock offered hereby, for a
period of 180 days from and after the date of this Prospectus without the
prior written consent of Lehman Brothers Inc.

From time to time, certain of the Underwriters or their affiliates may
provide investment banking services to the Company. Lazard Freres & Co. LLC
served as dealer manager and initial purchaser in connection with the exchange
offer and debt offering for the Refinancing in November 1995, for which it
received customary fees. Fieldstone FPCG Services, L.P. ("Fieldstone") served
as dealer manager in connection with the exchange offer, for which it received
customary fees. Fieldstone also has provided, and may continue to provide,
financial advisory services to the Company. Upon consummation of the Offering,
a member of Fieldstone will receive from the Company a portion of the
Additional Options to purchase an aggregate of 28,607 shares of Common Stock.

James N. Chapman, a former principal of Fieldstone who resigned from
Fieldstone effective May 30, 1996, is a director of the Company. See
"Management"; "Principal Stockholders"; and "Certain Relationships and Related
Transactions--Grant of Options; Issuance of Preferred Stock and Common Stock
in the Reclassification."

Prior to this Offering there has been no public market for the Common Stock.
The initial public offering price for the Common Stock offered hereby will be
determined by negotiation between the Company and the Underwriters and will be
based on, among other things, the Company's financial and operating history
and condition, the prospects of the Company and its industry in general, the
management of the Company and the market prices of securities of companies
engaged in businesses similar to those of the Company.

LEGAL MATTERS

The validity of the shares of Common Stock offered hereby have been passed
upon for the Company by Anderson Kill & Olick, P.C., New York, New York and
for the Underwriters by Cahill Gordon & Reindel (a partnership including a
professional corporation), New York, New York. Upon consummation of the
Offering, a member of Anderson Kill & Olick, P.C. will receive a portion of
the Additional Options from the Company to purchase 57,214 shares of Common
Stock.

62
<PAGE>

EXPERTS

The combined consolidated financial statements of the Company as of March
29, 1996 and for the six month transition period then ended and as of
September 29, 1995 and for the period from April 5, 1995 to September 29,
1995, and the combined and consolidated financial statements of Coinmach
(formerly Solon) at September 29, 1995 and for the year then ended included in
this Prospectus and Registration Statement have been audited by Ernst & Young
LLP, independent auditors, as set forth in their reports thereon appearing
elsewhere herein, and are included in reliance upon such reports given upon
the authority of such firm as experts in accounting and auditing.

The financial statements of CIC as of December 31, 1994 and for each of the
years in the two-year period ended December 31, 1994, and as of and for the
one month period ended January 31, 1995, and the financial statements of TCC
as of and for the two-month period ended March 31, 1995, included in this
Prospectus have been audited by KPMG Peat Marwick LLP, independent certified
public accountants, as indicated in their reports with respect thereto and are
included in this Prospectus and Registration Statement in reliance upon such
reports given upon the authority of such firm as experts in accounting and
auditing.

The financial statements of Solon as of September 30, 1994, and for each of
the two fiscal years then ended, included in this Prospectus have been audited
by Arthur Andersen LLP, independent public accountants, as indicated in their
report with respect thereto and is included in this Prospectus and in the
Registration Statement in reliance upon such report given upon the authority
of such firm as experts in accounting and auditing.

AVAILABLE INFORMATION

The Company has filed with the Commission the Registration Statement
relating to the Common Stock being offered hereby. This Prospectus does not
contain all the information set forth in the Registration Statement and the
exhibits and schedules thereto, certain items of which are omitted in
accordance with the rules and regulations of the Commission. Statements
contained in this Prospectus concerning the provisions of documents filed with
the Registration Statement as exhibits are necessarily summaries of such
documents, and each such statement is qualified in its entirety by reference
to the applicable document filed as an exhibit to the Registration Statement.
For further information with respect to the Company and the shares of Common
Stock offered hereby, reference is made to the Registration Statement,
including the exhibits and schedules thereto. Copies of the Registration
Statement, including the exhibits and schedules thereto, can be inspected and
copied at the public reference facilities maintained by the Commission at 450
Fifth Street, N.W., Room 1024, Washington, D.C. 20549; at its Chicago Regional
Office, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511; and
at its New York Regional Office, Seven World Trade Center, 13th Floor, New
York, New York 10048. Copies of such material can be obtained from the public
reference section of the Commission, 450 Fifth Street, N.W., Washington, D.C.
20549, upon payment of the prescribed rates. For further information
pertaining to the Company and the Common Stock being offered hereby, reference
is made to the Registration Statement, including the exhibits thereto and the
financial statements, notes and schedules filed as a part thereof.

As a result of the Offering, the Company will become subject to the
informational and reporting requirements of the Securities Exchange Act of
1934, as amended, and in accordance therewith will file periodic reports,
proxy statements and other information with the Commission.

63
<PAGE>

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
COINMACH LAUNDRY CORPORATION
Combined consolidated balance sheets of Coinmach Laundry Corporation and
Subsidiaries as of March 29, 1996 and September 29, 1995, and the
related combined consolidated statements of operations, shareholders'
equity (deficit), and cash flows for the six-month transition period
ended March 29, 1996 and the period from April 5, 1995 to September 29,
1995 with accompanying notes and Report of Independent Auditors
thereon................................................................ F-2
COINMACH CORPORATION (FORMERLY SOLON AUTOMATED SERVICES, INC.)
Combined and consolidated balance sheets of Coinmach Corporation
(formerly Solon) as of September 29, 1995 and September 30, 1994 and
related combined and consolidated statements of operations,
shareholders' equity (deficit) and cash flows for each of the years in
the three years ended September 29, 1995 with accompanying notes and
Reports of Independent Auditors thereon................................ F-19
TCC (AS SUCCESSOR TO CIC)
Consolidated balance sheets of CIC as of December 31, 1994 and related
consolidated statements of operations, stockholders' equity
(deficiency) and cash flows for each of the years in the two-year
period ended December 31, 1994 with accompanying notes and Independent
Auditors' Report thereon............................................... F-38
Consolidated balance sheet of CIC as of January 31, 1995 and related
consolidated statements of operations and accumulated deficit and cash
flows for the month ended January 31, 1995 with accompanying notes and
Independent Auditors' Report thereon................................... F-51
Consolidated balance sheet of TCC as of March 31, 1995 and related
consolidated statements of operations and accumulated deficit and cash
flows for the two months ended March 31, 1995 with accompanying notes
and Independent Auditors' Report thereon............................... F-63
</TABLE>

F-1
<PAGE>

REPORT OF INDEPENDENT AUDITORS

To the Board of Directors of
Coinmach Laundry Corporation

We have audited the accompanying combined consolidated balance sheets of
Coinmach Laundry Corporation and Subsidiaries (the "Company") as of March 29,
1996 and September 29, 1995, and the related combined consolidated statements
of operations, shareholders' equity (deficit), and cash flows for the six-
month transition period ended March 29, 1996 and the period from April 5, 1995
to September 29, 1995. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with 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 financial statements referred to above present fairly, in
all material respects, the combined consolidated financial position of
Coinmach Laundry Corporation and Subsidiaries at March 29, 1996 and September
29, 1995, and the combined consolidated results of its operations and its cash
flows for the six-month transition period ended March 29, 1996 and for the
period from April 5, 1995 to September 29, 1995, in conformity with generally
accepted accounting principles.

/s/ Ernst & Young LLP

Melville, NY
May 3, 1996, except for
Note 11, as to which the
date is July 17, 1996

F-2
<PAGE>

COINMACH LAUNDRY CORPORATION AND SUBSIDIARIES

COMBINED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS OF DOLLARS)

<TABLE>
<CAPTION>
MARCH 29, SEPTEMBER 29,
1996 1995
--------- -------------
<S> <C> <C>
ASSETS
Cash and cash equivalents............................ $ 19,858 $ 10,311
Receivables, less allowance of $454 and $360......... 5,758 4,392
Inventories.......................................... 4,443 3,902
Prepaid expenses..................................... 2,641 2,084
Advance rental payments.............................. 20,320 19,772
Property and equipment:
Laundry equipment and fixtures..................... 89,394 81,599
Land, building and improvements.................... 10,965 8,027
Trucks and other vehicles.......................... 1,849 1,400
-------- --------
102,208 91,026
Less accumulated depreciation...................... 19,509 10,320
-------- --------
Net property and equipment....................... 82,699 80,706
Contract rights, net of accumulated amortization of
$8,925 and $4,869................................... 59,745 63,801
Goodwill, net of accumulated amortization of $2,386
and $1,226.......................................... 44,071 45,231
Other assets, principally debt issuance costs........ 9,613 11,234
-------- --------
Total assets..................................... $249,148 $241,433
======== ========
LIABILITIES AND SHAREHOLDERS' (DEFICIT) EQUITY
Accounts payable..................................... 6,085 6,278
Accrued commissions.................................. 7,380 8,456
Accrued interest..................................... 7,745 4,551
Other accrued expenses............................... 7,557 10,316
Deferred income taxes................................ 18,924 25,277
12 3/4% senior notes................................. 5,000 99,000
11 3/4% senior notes................................. 196,655 --
13 3/4% senior subordinated debentures, net of unam-
ortized discount of $1,326.......................... -- 28,674
Long-term credit facility............................ -- 42,880
Other long-term debt................................. 1,110 5,861
Shareholders' equity:
Common stock....................................... 62 22
Capital in excess of par value..................... 17,841 17,881
Accumulated deficit................................ (18,719) (7,271)
-------- --------
(816) 10,632
Receivables from shareholders........................ (492) (492)
-------- --------
Total shareholders' (deficit) equity................. (1,308) 10,140
-------- --------
Total liabilities and shareholders' (deficit) equi-
ty.................................................. $249,148 $241,433
======== ========
</TABLE>

See accompanying notes.

F-3
<PAGE>

COINMACH LAUNDRY CORPORATION AND SUBSIDIARIES

COMBINED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS OF DOLLARS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
SIX-MONTH
TRANSITION APRIL 5, 1995
PERIOD ENDED TO
MARCH 29, SEPTEMBER 29,
1996 1995
------------ -------------
<S> <C> <C>
Revenues........................................... $ 89,070 $89,719
Costs and expenses:
Laundry operating expenses....................... 60,536 62,905
Depreciation and amortization.................... 18,212 18,423
General and administrative....................... 1,844 2,351
Restructuring costs.............................. -- 2,200
-------- -------
80,592 85,879
-------- -------
Operating income................................... 8,478 3,840
Interest expense, net.............................. 11,999 11,818
-------- -------
Loss before income taxes and extraordinary item.... (3,521) (7,978)
-------- -------
Provision (benefit) for income taxes:
Currently payable................................ 50 420
Deferred......................................... (1,048) (2,282)
-------- -------
(998) (1,862)
-------- -------
Loss before extraordinary item..................... (2,523) (6,116)
Extraordinary item, net of income tax benefit of
$5,305............................................ (8,925) --
-------- -------
Net loss........................................... $(11,448) $(6,116)
======== =======
Pro forma loss per share:
Before extraordinary item........................ $ (.32) $ (.79)
Extraordinary item............................... (1.15) --
-------- -------
Pro forma net loss per share....................... $ (1.47) $ (.79)
======== =======
</TABLE>

See accompanying notes.

F-4
<PAGE>

COINMACH LAUNDRY CORPORATION AND SUBSIDIARIES

COMBINED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT)
(IN THOUSANDS OF DOLLARS, EXCEPT PAR VALUE AND SHARES)

<TABLE>
<CAPTION>
BALANCE BALANCE RECAPITALIZATION BALANCE
APRIL 5, NET SEPTEMBER 29, NET OF COMMON MARCH 29,
1995 LOSS 1995 LOSS STOCK 1996
-------- ------- ------------- -------- ---------------- ---------
<S> <C> <C> <C> <C> <C> <C>
Class A common stock,
par value $.01:
Authorized shares--
1,959,021
Issued shares, end of
period--1,959,021 and
1,783,584............. $ 19 $ -- $ 19 $ -- $ (1) $ 18
Class B common stock,
par value $.01:
Authorized shares--
345,710
Issued shares, end of
each period--265,044.. 3 -- 3 -- -- 3
Class C common stock,
par value $.01:
Authorized shares--
305,212
Issued shares, end of
period--0 and
305,212............... -- -- -- -- 3 3
Class D common stock,
par value $.01:
Authorized shares--
305,212
Issued shares, end of
each period--0........ -- -- -- -- -- --
Class E common stock,
par value $.01:
Authorized shares--
175,436
Issued shares, end of
period--0 and
175,436............... -- -- -- -- 2 2
Class F common stock,
par value $.01:
Authorized shares--
3,086,045
Issued shares, end of
period--0 and
3,086,045............. -- -- -- -- 30 30
Class G common stock,
par value $.01:
Authorized shares--
618,428
Issued shares, end of
period--0 and
578,509............... -- -- -- 6 6
Preferred stock, par
value $.01:
10,000 authorized, none
issued................ -- -- -- -- --
Capital in excess of par
value.................. 17,881 -- 17,881 -- (40) 17,841
Accumulated deficit..... (1,155) (6,116) (7,271) (11,448) -- (18,719)
------- ------- ------- -------- ----- --------
16,748 (6,116) 10,632 (11,448) -- (816)
Receivables from
shareholders........... (492) -- (492) -- -- (492)
------- ------- ------- -------- ----- --------
Total shareholders'
equity (deficit)....... $16,256 $(6,116) $10,140 $(11,448) $ -- $ (1,308)
======= ======= ======= ======== ===== ========
</TABLE>

See accompanying notes.

F-5
<PAGE>

COINMACH LAUNDRY CORPORATION AND SUBSIDIARIES

COMBINED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS OF DOLLARS)

<TABLE>
<CAPTION>
SIX-MONTH
TRANSITION APRIL 5, 1995
PERIOD ENDED TO
MARCH 29, SEPTEMBER 29,
1996 1995
------------ -------------
<S> <C> <C>
OPERATING ACTIVITIES
Net loss........................................... $(11,448) $ (6,116)
Adjustments to reconcile net loss to net cash pro-
vided by operating activities:
Depreciation and amortization.................... 18,212 18,423
Deferred income taxes............................ (1,048) (2,000)
Amortization of debt discount and deferred issue
costs........................................... 508 735
Extraordinary item, net of taxes................. 8,925 --
Decrease (increase) in other assets.............. 24 (1,054)
Increase in receivables, net..................... (1,489) (197)
(Increase) decrease in inventories and
prepayments..................................... (1,100) 930
Decrease in accounts payable..................... (6) (610)
Increase (decrease) in accrued interest.......... 3,193 (25)
(Decrease) increase in other accrued expenses,
net............................................. (3,434) 1,980
-------- --------
Net cash provided by operating activities.......... 12,337 12,066
-------- --------
INVESTING ACTIVITIES
Additions to property and equipment................ (10,757) (9,550)
Advance payments to location owners................ (3,462) (3,569)
Acquisition of net assets of Solon................. -- (11,925)
Sales of property and equipment.................... 57 5
-------- --------
Net cash used in investing activities.............. (14,162) (25,039)
-------- --------
FINANCING ACTIVITIES
Proceeds from issuance of 11 3/4% senior notes..... 65,835 --
Net (repayments) borrowings of bank and other
borrowings........................................ (48,053) 6,126
Principal payments of capitalized lease obliga-
tions............................................. (262) (143)
Deferred debt issuance costs....................... (5,397) --
Debt extinguishment costs.......................... (751) --
Loans to shareholders.............................. -- (154)
Sale of common stock............................... -- 6,681
-------- --------
Net cash provided by financing activities.......... 11,372 12,510
-------- --------
Net increase (decrease) in cash and cash equiva-
lents............................................. 9,547 (463)
Cash and cash equivalents, beginning of period..... 10,311 10,774
-------- --------
Cash and cash equivalents, end of period........... $ 19,858 $ 10,311
======== ========
</TABLE>

See accompanying notes.

F-6
<PAGE>

COINMACH LAUNDRY CORPORATION AND SUBSIDIARIES

NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 29, 1996

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF COMBINATION AND CONSOLIDATION

The accompanying consolidated financial statements of Coinmach Laundry
Corporation (formerly SAS Acquisitions, Inc.) and Subsidiaries (the
"Company"), include the accounts of its wholly-owned subsidiary, Coinmach
Corporation and Subsidiaries, formerly Solon Automated Services, Inc.
("Solon") combined with the consolidated accounts of The Coinmach Corporation
("TCC"). The Company was formed on April 5, 1995, at which time it acquired
Solon, and is controlled by Golder Thoma Cressey Rauner ("GTCR"). TCC was
formed in January 1995 by an investor group, comprised principally of the same
investors who formed the Company, and acquired Coinmach Industries Co.
("Industries") and Super Laundry Equipment Co. L.P. ("Super Laundry") on
January 31, 1995 (the "TCC Acquisition"). Both the Solon Acquisition and the
TCC Acquisition were accounted for as purchases and, accordingly, the acquired
assets and liabilities were recorded at their estimated fair values at the
respective acquisition dates.

As described in Note 2, Solon completed a merger with TCC on November 30,
1995. This transaction was accounted for in a manner similar to a pooling of
interests. As a result of the common investor group's control over both Solon
and TCC, the accompanying consolidated financial statements have been prepared
to reflect the accounts of the Company, Solon and TCC and their wholly-owned
subsidiaries on a combined basis since the date of common control, April 5,
1995.

The Company is primarily engaged in providing coin-operated laundry equipment
services to multi-family housing complexes throughout much of the United
States. The Company owns and operates over 220,000 coin-operated washers and
dryers on routes in over 20,000 multi-family housing units in 20 states and
the District of Columbia. Such routes are located throughout the Northeast,
Mid-Atlantic, Southeast, South-Central and Mid-West regions of the United
States. The Company, through its subsidiary, Super Laundry, also is a supplier
of coin-operated laundromat equipment and turnkey laundromat retail stores in
the New York Metropolitan area.

All material intercompany accounts and transactions have been eliminated in
combination and consolidation.

FISCAL YEAR

Prior to the merger of Solon and TCC, the Company's fiscal year was the fifty-
two or fifty-three week period which ended on the Friday nearest September
30th. Effective with the merger of Solon and TCC, the Company changed its
fiscal year end to the Friday in March nearest to March 31. The period from
April 5, 1995 to September 29, 1995 is referred to as "1995", while the period
from September 30, 1995 to March 29, 1996 is referred to as "1996T."

RECOGNITION OF LAUNDRY REVENUES

The Company has agreements with various property owners which provide for the
Company's installation and operation of laundry machines at various locations
in return for a commission. These agreements provide for both contingent
(percentage of revenues) and fixed commission payments. The Company reports
revenues from laundry machines on the accrual basis and has accrued the cash
computed to be in the machines at the end of the fiscal period.

F-7
<PAGE>

COINMACH LAUNDRY CORPORATION AND SUBSIDIARIES

NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

when all costs have been incurred and either the installation is operating
according to specifications or has been accepted by the customer. The duration
of such contracts is normally less than six months. Sales of laundromats were
approximately $7.8 million and $7.9 million in 1996T and 1995, respectively.

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 amounts reported in the financial statements and accompanying
notes. Actual results could differ from those estimates.

CASH EQUIVALENTS

The Company considers all highly liquid investments with original maturities
of three months or less to be cash equivalents.

INVENTORIES

Inventories are valued at the lower of cost (first-in, first-out) or market
and consist of the following (in thousands):

<TABLE>
<CAPTION>
MARCH 29, SEPTEMBER 29,
1996 1995
--------- -------------
<S> <C> <C>
Machine repair parts................................. $2,384 $1,941
Laundry equipment.................................... 2,059 1,961
------ ------
$4,443 $3,902
====== ======
</TABLE>

PROPERTY AND EQUIPMENT

Property and equipment are carried at cost and are depreciated on a straight-
line basis over the following estimated useful lives:

<TABLE>
<S> <C>
Laundry equipment and fixtures................................. 3 to 10 years
Improvements................................................... 4 to 10 years
Trucks and other vehicles...................................... 3 to 4 years
</TABLE>

Upon sale or retirement of property and equipment, the cost and related
accumulated depreciation are eliminated from the respective accounts, and the
resulting gain or loss is included in income. Maintenance and repairs are
charged to operations currently, and replacements of laundry machines and
significant improvements are capitalized.

Depreciation expense was $9.4 million and $9.5 million for 1996T and 1995,
respectively.

GOODWILL

Goodwill represents the excess of cost over fair value of net assets acquired
arising from the purchase of Solon on April 5, 1995 (see Note 2) and is being
amortized over 20 years. Management periodically evaluates the realizability
of the goodwill balance based upon the Company's expectations of nondiscounted
cash flows and operating income. Based upon present operations and strategic
plans, management believes that no impairment of goodwill has occurred.

CONTRACT RIGHTS

Contract rights represent amounts expended for location contracts arising from
the acquisition of laundry machines on location. These amounts, which arose
solely from purchase price allocations, are amortized on a straight-line basis
over the period of expected benefit ranging from 3 to 15 years based on
independent appraisals.

F-8
<PAGE>

COINMACH LAUNDRY CORPORATION AND SUBSIDIARIES

NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

ADVANCE RENTAL PAYMENTS

Advance payments to location owners are amortized on a straight-line basis
over the contract term, which generally ranges from 5 to 10 years.

INTEREST EXPENSE

Interest expense is reported net of interest income of $277,000 and $148,000
for 1996T and 1995, respectively.

PRO FORMA LOSS PER SHARE

Pro forma loss per share was calculated based upon the weighted average number
of common shares outstanding giving effect to the transactions discussed in
Note 11. Weighted average shares outstanding were 7,774,107 for 1996T and
1995.

INCOME TAXES

The Company accounts for income taxes under Statement of Financial Accounting
Standards No. 109, "Accounting for Income Taxes" ("Statement 109"). Statement
109 requires the asset and liability method of accounting for income taxes.
Under the asset and liability method of Statement 109, deferred tax assets and
liabilities are recognized for the future tax consequences attributable to
differences between the financial statement carrying amounts of existing
assets and liabilities and their respective tax bases. Statement 109 requires
that any tax benefits recognized for net operating loss carryforwards and
other items be reduced by a valuation allowance where it is more likely than
not that the benefits may not be realized. Deferred tax assets and liabilities
are measured using enacted tax rates expected to apply to taxable income in
the years in which those temporary differences are expected to be recovered or
settled. Under Statement 109, the effect on deferred tax assets and
liabilities of a change in tax rates is recognized in income in the period
that includes the enactment date.

IMPAIRMENT OF LONG-LIVED ASSETS

In March 1995, the Financial Accounting Standards Board issued Statement No.
121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to Be Disposed Of" ("Statement 121"), which requires impairment losses
to be recorded on long-lived assets used in operations when indicators of
impairment are present and the undiscounted cash flows estimated to be
generated by those assets are less than the assets' carrying amount. Statement
121 also addresses the accounting for long-lived assets that are expected to
be disposed of. The Company was required to adopt Statement 121 effective for
the year beginning March 30, 1996 and, based on current circumstances, does
not believe the effect of adoption is material.

2. BUSINESS COMBINATIONS

THE SOLON ACQUISITION

F-9
<PAGE>

COINMACH LAUNDRY CORPORATION AND SUBSIDIARIES

NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

an option pursuant to a Letter Agreement dated April 4, 1995. As of April 5,
1995, Ford beneficially owned, and had the sole power to dispose of, the
Shares. The Shares beneficially owned by Ford represented 100% of the
outstanding Common Stock and approximately 97% of the outstanding Class A
Common Stock.

Pursuant to the Stock Purchase Agreement with Ford, the Company purchased from
Ford all of the outstanding shares of Ford's non-voting Class A Common Stock
(the "Ford Non-Voting Common Stock"). The purchase price for the Ford Non-
Voting Common Stock was of $11.4 million. The sources of the funds used by the
Company for the Ford Non-Voting Common Stock were certain shareholders of TCC,
including GTCR. As of April 5, 1995, the Company beneficially owns, and has
the sole power to dispose of, 1,000 shares of the Ford Non-Voting Common
Stock.

Pursuant to the Letter Agreement dated April 4, 1995, with the Ford Holders
and TCC, the Ford Holders granted to the Company, among other things, an
option (the "Option") to purchase from the Ford Holders, subject to the terms
and conditions contained therein, all of the voting shares of Ford's Common
Stock (the "Ford Voting Common Stock"), for an aggregate purchase price of
$100,000. On April 28, 1995, the Company exercised the Option. The sources of
funds used by the Company to exercise the Option were substantially the same
sources used to purchase the Ford Non-Voting Common Stock. As of April 28,
1995, the Company beneficially owns, and has the sole power to vote and
dispose of, ten shares of the Ford Voting Common Stock.

The Stock Purchase Agreement was accounted for as a purchase and, as of April
5, 1995, Solon adjusted its consolidated assets and liabilities to their
estimated fair values, based on preliminary independent appraisals,
evaluations, estimations and other studies. Reflected below is a summary of
these adjustments (in thousands):

<TABLE>
<S> <C>
Increase in property and equipment............................... $ 9,065
Increase in contract rights...................................... 34,063
Increase in goodwill............................................. 1,268
Increase in deferred income taxes................................ (19,465)
Other............................................................ (1,515)
--------
Increase in shareholders' equity................................. $ 23,416
========
</TABLE>

THE TCC ACQUISITION

TCC was incorporated in January 1995 and was capitalized primarily through an
equity investment by an investor group led by the majority shareholder, GTCR,
and senior management and bank financing.

TCC is a holding company which was formed to acquire partnership interests in
Industries and Super Laundry. On January 31, 1995, TCC acquired its
partnership interests in Industries and Super Laundry from CIC I Acquisition
Corp. ("CIC I"). The transaction resulted in TCC owning 100% interests in both
Industries and Super Laundry. The aggregate purchase price for these interests
was $8.57 million, paid in cash. The acquisition was accounted for using the
purchase method of accounting. The fair value of assets acquired (based on an
independent appraisal for certain assets) less liabilities assumed exceeded
the purchase price by approximately $7.7 million. The excess was allocated
against property, equipment and intangible assets ratably based on their
respective fair values.

THE MERGER WITH TCC

On November 30, 1995, Solon completed a merger ("Merger") with TCC through an
exchange of stock. Shares of common stock of the Company were issued in
exchange for all of the issued and outstanding shares of common stock of TCC.
The Company then contributed its stock of TCC to Solon. Solon became the
surviving

F-10
<PAGE>

COINMACH LAUNDRY CORPORATION AND SUBSIDIARIES

NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

corporation after the merger, whereupon it changed its name to Coinmach
Corporation. Details of the results of operations of TCC and Solon for the
periods prior to the merger are as follows (in thousands):

<TABLE>
<CAPTION>
APRIL 5, 1995 SEPTEMBER 30,
TO 1995 TO
SEPTEMBER 29, NOVEMBER 29,
1995 1995
------------- -------------
<S> <C> <C>
REVENUES
Solon......................................... $51,256 $17,909
TCC........................................... 38,463 13,018
------- -------
Combined.................................... $89,719 $30,927
======= =======
NET INCOME (LOSS)
Solon......................................... $(5,496) $ (525)
TCC........................................... (450) 49
------- -------
Combined.................................... $(5,946) $ (476)
======= =======
</TABLE>

The combined financial results presented above include an adjustment to
decrease TCC's net loss by approximately $180,000 in 1995 and $70,000 for the
period from September 30, 1995 to November 29, 1995, to conform its accounting
policy for the capitalization of machine installation costs to that of Solon.
Intercompany transactions between the two companies for the period presented
were not material.

3. RECEIVABLES

Receivables consist of the following (in thousands):

<TABLE>
<CAPTION>
MARCH 29, SEPTEMBER 29,
1996 1995
--------- -------------
<S> <C> <C>
Trade receivables.................................... $3,431 $1,653
Notes receivable..................................... 1,811 1,783
Finance lease receivables............................ 625 905
Other................................................ 345 411
------ ------
6,212 4,752
Allowance for doubtful accounts...................... 454 360
------ ------
$5,758 $4,392
====== ======
</TABLE>

Notes receivable, which arise from the sale of laundromats, bear interest at a
weighted average rate of approximately 10% per annum and mature through 1998.
The notes are collateralized by the underlying laundry equipment. The Company
periodically sells notes receivable arising from the sale of laundromats to
third party finance companies. Included in other receivables are finance
reserves, which arise when the Company sells notes and a portion of the
proceeds are retained by the finance company. As the notes are collected, the
finance companies remit a portion of the collections to the Company. Many of
the notes receivable are sold with recourse to the Company (see Note 10).
Control of the notes sold with recourse is surrendered by the Company on the
date of transfer. The Company generally sells its receivables with recourse at
cost, recognizing no gain or loss.

Finance lease receivables relate to lease agreements that the Company has
entered into with one customer. Pursuant to the agreements, the Company
installs and services laundry equipment at apartment complexes owned and
operated by the customer. The difference between the aggregate lease rentals
and the cost of the related equipment is earned over the terms of the leases,
which range from 40 to 60 months. Annual future payments

F-11
<PAGE>

COINMACH LAUNDRY CORPORATION AND SUBSIDIARIES

NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

due under these leases at March 29, 1996, are as follows (in thousands);
1997--$258; 1998--$177; 1999--$146; and 2000--$44.

4. RESTRUCTURING COSTS

Restructuring charges consist of one-time costs aggregating approximately $2.2
million, which include approximately $1.3 million of severance payments for 55
of Solon's management, administrative and regional personnel, approximately
$300,000 of costs to relocate Solon's financial and administrative functions
to Roslyn, New York, approximately $100,000 of costs to integrate certain
financial and operating systems, and approximately $500,000 of costs related
to the consolidation of certain of Solon's regional offices. Of the total
restructuring costs of $2.2 million, approximately $300,000 was paid during
the period ended September 29, 1995, approximately $1.3 million was paid
during the six months ended March 29, 1996, and the remaining portion of
approximately $600,000 is expected to be paid during the fiscal year ending
March 28, 1997. The 55 employee terminations include 5 management employees,
17 corporate staff financial and administrative employees and 33 regional
laundry operational employees. Notifications to employees were made on various
dates through September 1995.

5. DEBT

On June 18, 1992, Solon sold in concurrent private offerings (i) $100 million
principal amount of 12 3/4% Senior Notes due 2001 (the "Senior Notes") and
(ii) $30 million principal amount of 13 3/4% Senior Subordinated Debentures
due 2002 (the "Debentures") and effective November 6, 1992, exchanged such
securities for securities with similar terms and form which were registered
under the Securities Act of 1933.

Interest was payable semiannually on January 15 and July 15 for the Senior
Notes and April 15 and October 15 for the Subordinated Debentures. The Senior
Notes were entitled to mandatory sinking fund payments of $15 million on July
15, 1998 and July 15, 1999, and $20 million on July 15, 2000. In addition,
Solon was obligated annually to offer to purchase Senior Notes at par in an
amount equal to 75% of its excess cash flow (as defined) and the proceeds of
asset dispositions ("Annual Mandatory Purchases"). Solon would have received
credit against Annual Mandatory Purchases for any amounts paid in open market
or other purchases. Solon would have received a credit against the sinking
fund payment requirements for the principal amount of Senior Notes acquired.
The Debentures had no mandatory principal repayment requirements until they
matured on October 15, 2002.

The Senior Notes were redeemable at Solon's option at a price equal to 106
3/8% after January 15, 1997, declining to par if redeemed after January 15,
1999. The Subordinated Debentures were redeemable at a price equal to 106 7/8%
after October 15, 1997, declining to par if redeemed after October 15, 1999.

Debt issue costs totaling $5.4 million incurred in connection with the 1992
debt offerings were included in other assets and were being amortized over the
term of the Senior Notes and Debentures. Accumulated amortization was $2.2
million at September 29, 1995.

On November 30, 1995, Solon completed an exchange offer with substantially all
the holders of the Senior Notes and Subordinated Debentures. Through December
14, 1995, Solon issued a total of $196.7 million of 11 3/4% Senior Notes due
2005 (the "Notes") which enabled Solon to complete this exchange offer,
consummate the merger with TCC and retire its remaining debt, and provide
additional working capital. Solon incurred costs of $4.0 million, net of
income taxes, related to a 5.5% premium paid to retire its Senior Notes and
Subordinated Debentures, wrote-off the unamortized balance of the related
original issue discount and deferred finance costs of approximately $1.3
million and $1.8 million, net of income taxes, respectively, and also incurred
costs related to the retirement of a revolving credit facility of TCC of
approximately $1.8 million, net of income taxes. The

F-12
<PAGE>

COINMACH LAUNDRY CORPORATION AND SUBSIDIARIES

NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

aggregate of the foregoing items totaling $8.9 million, net of income taxes,
is shown as an extraordinary item in 1996T.

Interest on the Notes is payable semi-annually on May 15 and November 15. The
Notes are redeemable at the option of Coinmach Corporation at any time after
November 15, 2000 at a price equal to 105 7/8% declining to par if redeemed
after November 15, 2002. The Notes contain certain financial covenants and a
registration rights agreement, whereby such debt has been registered under the
Securities Act of 1933. Additionally, the Notes restrict the payment of
dividends, distributions or other payments from Coinmach Corporation to the
Company.

The estimated fair value of the Notes at March 29, 1996, based upon limited
quoted market activity, approximated its recorded value.

On December 30, 1992, Solon entered into a loan and security agreement ("Solon
Credit Facility") which provided for a three-year revolving line of credit in
the amount of up to $5 million. Interest on the borrowing was based on prime
plus 2.875%, but in no event would the interest be less than the greater of 8%
per annum or $15,000 per month. Solon was also required to pay a monthly
service fee of $2,000 and an annual facility fee of 1% of the $5 million
available under the Solon Credit Facility. Borrowings under the Solon Credit
Facility were secured by accounts receivable, bank deposit accounts, equipment
and general intangibles of Solon. Additionally, Solon was required to maintain
a joint cash depository account with the lender. All cash collections were
required to be deposited in this account before being transferred to Solon's
account. Amounts borrowed and repaid during fiscal 1995 totaled $2.0 million.
No borrowings were outstanding under the Solon Credit Facility at
September 29, 1995.

Debt outstanding under the long-term credit facility of TCC (the "TCC Credit
Facility") as of September 29, 1995, consisted of the following (in
thousands):

<TABLE>
<S> <C>
Revolving line of credit, due January 31, 2000. Interest at prime
plus 1.25% (10.25% at September 29, 1995).......................... $ 2,880
Term loan A, quarterly payments of $250 commencing April 1, 1996,
and increasing to $500 April 1, 1997, $1,250 April 1, 1998 and
$1,500 April 1, 1999. Interest at prime plus 1.25% (10.25% at
September 29, 1995)................................................ 14,000
Term loan B, quarterly payments of $1,750 commencing April 1, 2000
and increasing to $2,000 April 1, 2001 with the final two payments
of $1,750 on April 1, 2002 and July 1, 2002. Interest at prime plus
1.75% (10.75% at September 29, 1995)............................... 18,500
Term loan C, due July 1, 2002. Interest at 12.5%.................... 7,500
-------
$42,880
=======
</TABLE>

The TCC Credit Facility provided for $40 million in term loans and $10 million
in the aggregate for revolving line of credit and acquisition loan facilities.
The revolving line of credit facility provided for up to $5 million in
borrowings, including letters of credit up to a maximum of $1 million. There
was a one-half of one percent fee per annum on the unused portion of this
facility and a two percent letter of credit fee. The acquisition loan facility
provided up to $5 million in borrowings. The acquisition loans were to be used
to finance acquisitions or capital expenditures attributed to growth. Any
amounts outstanding under the acquisition line as of January 31, 2000 were to
be repaid in equal quarterly installments through July 1, 2002. The interest
rate on borrowings under the acquisition line was at prime plus 1.75%. There
were no acquisition loans outstanding as of September 29, 1995.

The financing agreement relating to the TCC Credit Facility required TCC,
among other things, to maintain certain financial ratios and restricted
additional investments and indebtedness. Loans outstanding under this

F-13
<PAGE>

COINMACH LAUNDRY CORPORATION AND SUBSIDIARIES

NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

agreement were subject to prepayment upon the occurrence of certain events
such as asset dispositions, public offerings and the generation of excess cash
flow, as defined. Industries and Super Laundry were the borrowers under this
agreement and it was guaranteed by TCC. Borrowings were secured by all of the
assets of TCC.

On November 30, 1995, Coinmach Corporation entered into a new revolving credit
facility, ("Credit Facility"), which provides up to a maximum of $35 million
and which replaced the Solon Credit Facility and the TCC Credit Facility.
Availability under the Credit Facility is limited by an amount equal to one
semi-annual interest payment on the Notes. Interest on the borrowings is
payable monthly at a rate per annum no greater than the sum of LIBOR plus
2.50%. The Company is obligated to pay an unused line fee in an amount equal
to 0.5% of the unused availability payable monthly in arrears. Borrowings
under the Credit Facility are secured by real and personal property of the
Company and also require the Company, among other things, to maintain certain
financial ratios and restrict additional investments and indebtedness. At
March 29, 1996, there were no amounts outstanding under the Credit Facility.

In addition, at September 29, 1995, the Company had $5 million outstanding
under a loan agreement with a financial institution, which was repaid in
connection with the exchange offer on November 30, 1995.

As of March 29, 1996 all of the Company's outstanding senior notes will become
due after five years from the date of the balance sheet, or March 2001.

The Company made cash payments for interest of $8.5 million and $10.9 million
for 1996T and 1995, respectively.

6. RETIREMENT SAVINGS PLAN

TCC has established a defined contribution plan for substantially all of its
employees. TCC's contributions to the plan for 1996T and 1995 amounted to
approximately $43,000 in each period.

The Company does not provide any other postretirement benefits.

7. STOCK OPTION PLAN

Solon adopted a stock option plan (the "Plan") in September 1987. The Plan
authorized the granting of incentive stock options, nonqualified options, or a
combination of the foregoing, to certain key employees and directors.

Under the terms of the Plan, 1,250,000 common shares were reserved for
issuance upon exercise of options. Shares for options that had expired or had
been surrendered or canceled without having been exercised may again have been
optioned under the Plan.

Each option granted was exercisable into one common share of Solon. In
general, 50% of stock options granted became exercisable five years after the
date of grant, with 12 1/2% of the options becoming exercisable in each of the
subsequent four years.

F-14
<PAGE>

COINMACH LAUNDRY CORPORATION AND SUBSIDIARIES

NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

As of September 29, 1995, there was a total of 212,000 stock options
outstanding, exercisable at prices between $.98 and $1.23 per common share. No
options had been exercised since Solon adopted the Plan. As a result of the
merger with TCC, the Plan was canceled; participants in the Plan received in
aggregate consideration of approximately $34,000.

8. INCOME TAXES

The components of the Company's net deferred tax liabilities were as follows
(in thousands):

<TABLE>
<CAPTION>
MARCH 29, SEPTEMBER 29,
1996 1995
--------- -------------
<S> <C> <C>
Deferred tax liabilities:
Accelerated tax depreciation....................... $28,920 $26,804
Other, net......................................... 1,449 3,355
------- -------
30,369 30,159
------- -------
Deferred tax assets:
Net operating loss carryforwards................... 8,549 4,600
Book over tax depreciation......................... 2,383 742
Other.............................................. 973 --
Valuation allowance for deferred tax assets........ (460) (460)
------- -------
11,445 4,882
------- -------
Net deferred tax liabilities......................... $18,924 $25,277
======= =======
</TABLE>

As of April 5, 1995, the deferred tax asset and related valuation allowance
relating to Solon were netted and reduced to $2.6 million to reflect the net
operating loss available pursuant to limitations imposed under provisions of
the Internal Revenue Code regarding changes in ownership. In addition, as of
April 5, 1995, TCC had recorded a deferred tax asset of $460,000 with a
valuation allowance of the same amount. The deferred tax assets recorded
subsequently do not reflect a valuation allowance because the loss can be
utilized against the deferred tax liabilities in the carryforward period. The
net operating loss carryforwards, which expire between fiscal years 2001
through 2007, consist of approximately $7 million (after the limitation)
relating to the predecessor of Solon and approximately $13.7 million relating
to the Company.

The provision (benefit) for income taxes consists of (in thousands):

<TABLE>
<CAPTION>
SIX-MONTH
TRANSITION APRIL 5, 1995
PERIOD ENDED TO
MARCH 29, SEPTEMBER 29,
1996 1995
------------ -------------
<S> <C> <C>
Federal........................................... $(758) $(1,760)
State............................................. (240) (102)
----- -------
$(998) $(1,862)
===== =======
</TABLE>

Deferred taxes relate primarily from timing differences resulting from using
accelerated depreciation for tax purposes and straight-line depreciation for
financial reporting purposes.

F-15
<PAGE>

COINMACH LAUNDRY CORPORATION AND SUBSIDIARIES

NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

The effective income tax rate differs from the amount computed by applying the
U.S. federal statutory rate to loss before taxes as a result of state taxes
and permanent book/tax differences as follows (in thousands):

<TABLE>
<CAPTION>
SIX-MONTH
TRANSITION APRIL 5, 1995
PERIOD ENDED TO
MARCH 29, SEPTEMBER 29,
1996 1995
------------ -------------
<S> <C> <C>
Expected tax benefit.............................. $(1,201) $(2,655)
State tax benefit, net of federal taxes........... (170) (320)
Permanent book/tax differences:
Goodwill and other.............................. 373 1,113
------- -------
Recorded tax provision/(benefit).................. $ (998) $(1,862)
======= =======
</TABLE>

The Company made cash payments for income taxes of approximately $36,000, and
$494,000 for 1996T and 1995, respectively.

9. COMMON STOCK

The Company's classes of common stock contain various privileges which are
summarized as follows:

Holders of Common Stock Classes A, B, D, F and G are each entitled to one vote
per share on all matters to be voted on by the Company. Holders of Common
Stock Classes C and E have certain voting rights in connection with mergers or
consolidations of the Company.

Holders of Common Stock Classes A, E and F are entitled to certain rights upon
liquidation, dissolution or winding up of the Company, with respect to
distributions and unpaid yields. Holders of common stock Classes B and G are
entitled to similar but subordinate privileges.

Holders of Common Stock Class C are entitled to convert their shares into the
same number of shares of Common Stock Class D upon the occurrence of a
conversion event, as defined. Holders of Common Stock Classes A, D and E are
entitled to convert their shares at any time into the same number of Common
Stock Classes E, C and A, respectively, with certain limitations, as defined.

Holders of Common Stock Classes A, E and F are entitled to unpaid yields upon
the occurrence of certain events, as defined (see Note 11).

Certain of the Company's shares of common stock have been purchased by
shareholders through loans made by the Company. Such loans are presented as a
reduction of stockholder's equity.

10. COMMITMENTS AND CONTINGENCIES

Rental expense for all operating leases, which principally cover office
facilities and vehicles, was $1,235,000, and $1,139,000 for 1996T and 1995,
respectively.

The following is a schedule of the future minimum rental commitments under all
noncancelable leases as of March 29, 1996 (in thousands):

<TABLE>
<S> <C>
1997.............................................................. $1,683
1998.............................................................. 1,096
1999.............................................................. 759
2000.............................................................. 460
2001 and future periods........................................... 1,143
------
$5,141
======
</TABLE>

F-16
<PAGE>

COINMACH LAUNDRY CORPORATION AND SUBSIDIARIES

NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

The Company is contingently liable on receivables sold with recourse to
finance companies by TCC. The total amount of such receivables outstanding as
of March 29, 1996 is approximately $3.7 million.

The Company is party to various legal proceedings incidental to its business.
Although the ultimate disposition of these proceedings is not presently
determinable, management does not believe that adverse determinations in any
or all such proceedings would have a material adverse effect upon the
financial condition or results of operations of the Company.

In connection with insurance coverages, which include workers compensation,
general liability and other coverages, annual premiums are subject to limited
retroactive adjustment based on actual loss experience.

11. SUBSEQUENT EVENTS

Through June 1996, the Company completed certain acquisitions of businesses,
or assets of businesses, with the purchase price aggregating approximately
$16.8 million, utilizing cash on hand.

The Company is in the process of filing a Registration Statement with the
Securities and Exchange Commission in connection with the offering by the
Company of 4,120,000 shares of a new class of common stock for sale to the
public (the "Offering"). In contemplation of the Offering, subsequent to year
end, the Company issued an additional 79,029 shares of its Class B Common
Stock to certain members of management. These shares were purchased through
loans made by the Company totalling approximately $56,000. The difference
between the estimated fair value of the stock (which management believes to be
85% of the initial offering price in the Offering) and the amount paid for
such stock will be accounted for as compensation expense. In addition,
approximately $103,000 of receivables from shareholders outstanding at March
29, 1996 were forgiven.

The Offering contemplates the issuance of shares of a new class of preferred
stock to the current non-management holders of Class A, E and F Common Stock,
whereby approximately $19.1 million from the proceeds of the Offering will be
used to retire such shares of preferred stock. In addition, the Offering
contemplates the issuance of approximately 28,300 shares of new Common Stock
to holders of Class A, E and F Common Stock who are members of management. The
following table presents unaudited pro forma dividend and shareholders'
deficit at March 29, 1996:

<TABLE>
<CAPTION>
PRO FORMA
DIVIDEND AND
SHAREHOLDERS'
DEFICIT
MARCH 29, MARCH 29,
1996 1995
------------- ---------
<S> <C> <C>
Dividend payable.................................. $ 19,133 $ --
Shareholders' equity:
Common stock.................................... $ 61 $ 61
Capital in excess of par value.................. 903 17,842
Accumulated deficit............................. (29,013) (18,719)
-------- --------
(19,949) (816)
Receivables from stockholders..................... (492) (492)
-------- --------
Total shareholders' (deficit) equity.............. $(20,441) $ (1,308)
======== ========
</TABLE>

The Offering also contemplates the Company will grant options to purchase
735,612 shares of common stock at 85% of the Offering price to management and
certain officers of the Company. The Company will record such 15% discount as
compensation expense over the applicable four year vesting period.

In addition, the Offering contemplates a management stock option plan for the
issuance of up to 9% of the Company's stock at an exercise price equal to the
prevailing market price on the grant date. These options will contain a
vesting schedule to be determined prior to the Offering.

F-17
<PAGE>

COINMACH LAUNDRY CORPORATION AND SUBSIDIARIES

NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

The Company's Board of Directors has also approved an approximate 23.0 to 1
stock split. All common share data has been restated to reflect the stock
split.

The weighted average shares outstanding reflect as outstanding for all periods
presented the shares issued and options granted discussed above using the
treasuring stock method and the shares which would have been sold at the
assumed Offering price of $14.00 to fund the cash paid and common shares
issued to retire the preferred stock.

F-18
<PAGE>

REPORT OF INDEPENDENT AUDITORS

To the Board of Directors of
Coinmach Corporation

We have audited the accompanying combined consolidated balance sheet of
Coinmach Corporation and Subsidiaries (formerly Solon Automated Services,
Inc., which was combined with The Coinmach Corporation and Subsidiaries, a
company under common control, beginning April 5, 1995) (the "Company") as of
September 29, 1995, and the related combined consolidated statements of
operations, shareholders' equity (deficit), and cash flows for the period from
April 5, 1995 to September 29, 1995 ("Successor period") and the related
consolidated statements of operations, shareholders' equity (deficit) and cash
flows for the period from October 1, 1994 to April 4, 1995 ("Predecessor
period"). These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the combined consolidated financial position of
Coinmach Corporation and Subsidiaries at September 29, 1995, and the combined
consolidated results of its operations and its cash flows for the Successor
period from April 5, 1995 to September 29, 1995 and the consolidated results
of its operations and its cash flows for the Predecessor period from October
1, 1994 to April 4, 1995, in conformity with generally accepted accounting
principles.

As more fully described in Note 2 to the combined consolidated financial
statements, SAS Acquisitions Inc. purchased Solon Automated Services, Inc.
("Solon") as of April 5, 1995 in a business combination accounted for as a
purchase. Subsequent thereto, on November 30, 1995, The Coinmach Corporation,
a company under common control with Solon, was merged into Solon, who
thereupon changed its name to Coinmach Corporation, in a business combination
accounted for as though it were a pooling of interests. As a result, the
combined and consolidated financial statements for the Successor are presented
on a different basis of accounting than that of the Predecessor and,
therefore, are not comparable.

/s/ Ernst & Young LLP

Melville, NY
March 20, 1996

F-19
<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Solon Automated Services, Inc.:

We have audited the consolidated balance sheets of Solon Automated Services,
Inc. (a Delaware corporation) and subsidiaries as of September 30, 1994 and
the related consolidated statements of operations, shareholders' equity
(deficit) and cash flows for each of the two fiscal years in the period ended
September 30, 1994. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Solon Automated Services,
Inc. and subsidiaries as of September 30, 1994, and the results of their
operations and their cash flows for each of the two fiscal years in the period
ended September 30, 1994, in conformity with generally accepted accounting
principles.

As further discussed in Note 1 to the consolidated financial statements,
effective October 2, 1993, the Company implemented the provisions of Statement
of Financial Accounting Standards No. 109, "Accounting for Income Taxes".

/s/ Arthur Andersen LLP

Philadelphia, Pa.,
December 19, 1994

F-20
<PAGE>

COINMACH CORPORATION AND SUBSIDIARIES
(FORMERLY SOLON AUTOMATED SERVICES, INC.)

COMBINED AND CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS OF DOLLARS, EXCEPT PAR VALUE)

<TABLE>
<CAPTION>
SEPTEMBER 29 SEPTEMBER 30
1995 1994
------------ ------------
SUCCESSOR PREDECESSOR
<S> <C> <C>
ASSETS
Cash and cash equivalents........................... $ 9,282 $ 7,241
Receivables, less allowance of $360 and $34......... 4,268 1,702
Inventories......................................... 3,902 1,257
Prepaid expenses.................................... 2,084 833
Advance rental payments............................. 19,772 17,646
Property and equipment:
Laundry equipment and fixtures.................... 81,599 84,576
Land, building and improvements................... 8,027 13,239
Trucks and other vehicles......................... 1,400 254
-------- --------
91,026 98,069
Less accumulated depreciation................... 10,320 49,342
-------- --------
Net property and equipment...................... 80,706 48,727
Contract rights, net of accumulated amortization of
$4,869 and $15,171................................. 63,801 15,432
Goodwill, net of accumulated amortization of $1,226
and $9,694......................................... 45,231 45,881
Other assets, principally debt issuance costs....... 10,897 4,870
-------- --------
Total assets.................................... $239,943 $143,589
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
Accounts payable.................................... $ 6,220 $ 3,186
Accrued commissions................................. 8,456 4,553
Accrued interest.................................... 4,551 4,657
Other accrued expenses.............................. 10,241 3,395
Deferred income taxes............................... 25,277 8,032
12 3/4% senior notes................................ 99,000 100,000
13 3/4% senior subordinated debentures, net of
unamortized discount of
$1,326 and $1,513.................................. 28,674 28,487
Long-term credit facility........................... 43,477
Other long-term debt................................ 264
Shareholders' equity (deficit)
Common stock, par value $.01:
Authorized shares--1,000 and 20,000,000
Issued shares--100 and 12,174,257................. -- 122
Class A common stock, par value $.01:
3,247,885 shares authorized and issued in 1994.... -- 33
Capital in excess of par value...................... 23,222 14,221
Accumulated deficit................................. (7,101) (23,097)
-------- --------
16,121 (8,721)
Receivables from shareholders....................... (2,338) --
-------- --------
Total shareholders' equity (deficit)................ 13,783 (8,721)
-------- --------
Total liabilities and shareholders' equity (defi-
cit)............................................... $239,943 $143,589
======== ========
</TABLE>

See accompanying notes.

F-21
<PAGE>

COINMACH CORPORATION AND SUBSIDIARIES
(FORMERLY SOLON AUTOMATED SERVICES, INC.)

COMBINED AND CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS OF DOLLARS, EXCEPT PER SHARE DATA)

See accompanying notes.

F-22
<PAGE>

COINMACH CORPORATION AND SUBSIDIARIES
(FORMERLY SOLON AUTOMATED SERVICES, INC.)

COMBINED AND CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT)
(IN THOUSANDS OF DOLLARS)

<TABLE>
<CAPTION>
CAPITAL IN
COMMON CLASS A COMMON EXCESS OF ACCUMULATED RECEIVABLES FROM TOTAL SHAREHOLDERS'
STOCK STOCK PAR VALUE DEFICIT SHAREHOLDER EQUITY (DEFICIT)
------ -------------- ---------- ----------- ---------------- -------------------
<S> <C> <C> <C> <C> <C> <C>
Balance, October 2,
1992................... $ 123 $ 33 $14,232 $(13,384) $ -- $ 1,004
Net loss................ -- -- -- (2,795) -- (2,795)
Repurchase of 10,000
shares of common
stock.................. -- -- (10) -- -- (10)
Contribution to
retirement savings
plan................... 1 -- 164 -- -- 165
-------------------------------------------------------------------------------------
Balance, October 1,
1993................... 124 33 14,386 (16,179) -- (1,636)
Net loss................ -- -- -- (6,918) -- (6,918)
Repurchase of 270,000
shares of common
stock.................. (3) -- (267) -- -- (270)
Contribution to
retirement savings
plan................... 1 -- 102 -- -- 103
-------------------------------------------------------------------------------------
Balance, September 30,
1994................... 122 33 14,221 (23,097) -- (8,721)
Net loss--Predecessor
period................. -- -- -- (2,627) -- (2,627)
Repurchase of 45,459
shares of common
stock.................. -- -- (68) -- -- (68)
Purchase accounting
adjustments............ -- -- (2,308) 25,724 -- 23,416
Recapitalization of
common stock........... (122) (33) 155 -- -- --
Merger of TCC........... -- -- 11,222 (1,155) (338) 9,729
Advance to SAS.......... -- -- -- -- (2,000) (2,000)
Net loss--Successor
period................. -- -- -- (5,946) -- (5,946)
-------------------------------------------------------------------------------------
Balance, September 29,
1995................... $ -- $ -- $23,222 $ (7,101) $(2,338) $13,783
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
</TABLE>

See accompanying notes.

F-23
<PAGE>

COINMACH CORPORATION AND SUBSIDIARIES
(FORMERLY SOLON AUTOMATED SERVICES, INC.)

COMBINED AND CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS OF DOLLARS)

<TABLE>
<CAPTION>
APRIL 5, 1995 OCTOBER 1, YEAR ENDED
TO 1994 TO -------------------------
SEPTEMBER 29, APRIL 4, SEPTEMBER 30, OCTOBER 1,
1995 1995 1994 1993
------------- ----------- ------------- -----------
SUCCESSOR PREDECESSOR PREDECESSOR PREDECESSOR
<S> <C> <C> <C> <C>
OPERATING ACTIVITIES
Net loss.................. $ (5,946) $(2,627) $ (6,918) $ (2,795)
Adjustments to reconcile
net loss to net cash
provided by operating
activities:
Depreciation and
amortization........... 18,423 10,304 21,347 21,002
Deferred income taxes... (2,000) (220) 2,649 (1,168)
Amortization of debt
discount and deferred
issue costs............ 735 440 878 867
Deferred debt issuance
cost................... -- -- -- (178)
Decrease (increase) in
other assets........... (717) 106 (233) (609)
Decrease (increase) in
receivables, net....... (73) 164 78 631
Decrease (increase) in
inventories and
prepayments............ 930 (676) 2,074 (392)
Increase (decrease) in
accounts payable....... (668) 1,725 (2,173) (766)
Decrease in accrued
interest............... (25) (81) (24) (267)
Increase in other
accrued expenses, net.. 1,980 1,081 236 222
-------- ------- -------- --------
Net cash provided by
operating activities..... 12,639 10,216 17,914 16,547
-------- ------- -------- --------
INVESTING ACTIVITIES
Additions to property and
equipment................ (9,550) (4,815) (11,224) (12,993)
Advance payments to
location owners.......... (3,569) (2,129) (5,555) (5,525)
Additions to assets from
acquisitions............. -- -- -- (38)
Sales of property and
equipment................ 5 407 16 56
-------- ------- -------- --------
Net cash used in investing
activities............... (13,114) (6,537) (16,763) (18,500)
-------- ------- -------- --------
FINANCING ACTIVITIES
Advance to SAS............ (2,000) -- -- --
Repurchase of senior
notes.................... -- (1,000) -- --
Net borrowings
(repayments) of bank and
other borrowings......... 1,126 -- -- (626)
Principal payments of
capitalized lease
obligations.............. (143) -- -- --
Repurchases of common
stock.................... -- (68) (270) (10)
-------- ------- -------- --------
Net cash used in financing
activities............... (1,017) (1,068) (270) (636)
-------- ------- -------- --------
Net increase (decrease) in
cash..................... (1,492) 2,611 881 (2,589)
Cash and cash equivalents,
beginning of period...... 10,774 7,241 6,360 8,949
-------- ------- -------- --------
Cash and cash equivalents,
end of period............ $ 9,282 $ 9,852 $ 7,241 $ 6,360
======== ======= ======== ========
</TABLE>

See accompanying notes.

F-24
<PAGE>

COINMACH CORPORATION AND SUBSIDIARIES
(FORMERLY SOLON AUTOMATED SERVICES, INC.)

NOTES TO COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 29, 1995

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF COMBINATION AND CONSOLIDATION

The accompanying successor financial statements combine the consolidated
accounts of Coinmach Corporation and Subsidiaries, formerly Solon Automated
Services, Inc. ("Solon") with the consolidated accounts of The Coinmach
Corporation ("TCC") (collectively, the "Company") for the periods under common
control. The Predecessor financial statements reflect the consolidated
accounts of Solon only. Solon was acquired on April 5, 1995 by SAS
Acquisitions, Inc. ("SAS") (the "Solon Acquisition") a company controlled by
Golder Thoma Cressey Rauner ("GTCR"). TCC was formed in January 1995 by an
investor group, comprised principally of the same investors who formed SAS,
and acquired Coinmach Industries Co. and Super Laundry Equipment Co. L.P. on
January 31, 1995 (the "TCC Acquisition"). Both the Solon Acquisition and the
TCC Acquisition were accounted for as purchases and, accordingly, the acquired
assets and liabilities were recorded at their estimated fair values at the
respective acquisition dates.

As described in Note 2, Solon completed a merger with TCC on November 30,
1995. This transaction was accounted for in a manner similar to a pooling of
interests. As a result of the common investor groups control over both Solon
and TCC, the accompanying financial statements have been prepared to reflect
the accounts of Solon and TCC and their wholly-owned subsidiaries on a
combined basis since the date of common control, April 5, 1995.

References to the Successor refer to the Company during the common control
period, while references to the Predecessor refer to Solon for prior periods.
The Predecessor period from October 1, 1994 to April 4, 1995 is referred to as
1995P while the Successor period from April 5, 1995 to September 29, 1995 is
referred to as 1995S. As a result of the acquisition of Solon by SAS and the
subsequent merger with TCC, the combined consolidated financial statements for
the Successor are presented on a different basis of accounting than that for
the Predecessor and therefore, are not comparable.

The Company is primarily engaged in providing coin-operated laundry equipment
services to multi-family housing complexes throughout much of the United
States. The Company owns and operates over 220,000 coin-operated washers and
dryers on routes in over 20,000 multi-family housing units in 20 states and
the District of Columbia. Such routes are located throughout the New York
Metropolitan, Mid-Atlantic, Southeast and South-Central regions of the United
States. The Company, through its subsidiary, Super Laundry, also is a supplier
of coin-operated laundromat equipment and turnkey laundromat retail stores in
the New York Metropolitan area.

Certain reclassifications have been made to the 1994 and 1993 financial
statements to conform to the 1995 presentation.

All material intercompany accounts and transactions have been eliminated in
consolidation.

FISCAL YEAR

Prior to the merger with TCC, Solon's fiscal year was the fifty-two or fifty-
three week period which ended on the Friday nearest September 30th. The fiscal
years ended September 29, 1995, September 30, 1994 and October 1, 1993 are
fifty-two week periods. Effective with the merger of Solon and TCC, the
Company has changed its fiscal year end to the Friday nearest to March 31.

F-25
<PAGE>

COINMACH CORPORATION AND SUBSIDIARIES
(FORMERLY SOLON AUTOMATED SERVICES, INC.)

NOTES TO COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

RECOGNITION OF LAUNDRY REVENUES

Super Laundry's customers generally sign sales contracts pursuant to which
Super Laundry constructs and equips complete laundromat operations, including
location identification, construction, plumbing, electrical wiring and all
required permits. Revenue is recognized on the completed contract method. A
contract is considered complete when all costs have been incurred and either
the installation is operating according to specifications or has been accepted
by the customer. The duration of such contracts is normally less than six
months. Sales of laundromats were approximately $7.9 million for 1995S.

USE OF ESTIMATES

CASH EQUIVALENTS

The Company considers all highly liquid investments with original maturities
of three months or less to be cash equivalents.

INVENTORIES

Inventories are valued at the lower of cost (first-in, first-out) or market
and consist of the following (in thousands):

<TABLE>
<CAPTION>
SEPTEMBER 29, 1995 SEPTEMBER 30, 1994
------------------ ------------------
SUCCESSOR PREDECESSOR
<S> <C> <C>
Machine repair parts................. $1,941 $1,257
Laundry equipment.................... 1,961 --
------ ------
$3,902 $1,257
====== ======
</TABLE>

PROPERTY AND EQUIPMENT

Property and equipment are carried at cost and are depreciated on a straight-
line basis over the following estimated useful lives:

<TABLE>
<S> <C>
Laundry equipment and fixtures............................... 3 to 10 years
Improvements................................................. 4 to 10 years
Trucks and other vehicles.................................... 3 to 4 years
</TABLE>

F-26
<PAGE>

COINMACH CORPORATION AND SUBSIDIARIES
(FORMERLY SOLON AUTOMATED SERVICES, INC.)

NOTES TO COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

Depreciation expense was $9.5 million, $6.2 million, $13.0 million and $12.9
million for 1995S, 1995P, and fiscal years 1994 and 1993, respectively.

On April 5, 1995, TCC revised its estimate of the useful life of its laundry
equipment from 5 to 8 years. The effect of this change in estimate was to
decrease loss before extraordinary item and net loss for the Successor period
by approximately $470,000.

GOODWILL

Goodwill as of September 30, 1994 represents the excess of cost over fair
value of net assets acquired, arising primarily as a result of the purchase of
Solon in 1987 by an investor group. Goodwill as of September 29, 1995
represents the excess of cost over fair value of net assets acquired arising
from the purchase of Solon on April 5, 1995 (see Note 2). Goodwill was
amortized on a straight-line basis over 40 years for the Predecessor and is
being amortized over 20 years for the Successor. Management periodically
evaluates the realizability of the goodwill balance based upon the Company's
expectations of nondiscounted cash flows and operating income. Based upon
present operations and strategic plans, management believes that no impairment
of goodwill has occurred.

CONTRACT RIGHTS

Contract rights represent amounts expended for location contracts arising from
the acquisition of laundry machines on location. These amounts, which arose
solely from purchase price allocations, are amortized on a straight-line basis
over the period of expected benefit of approximately 13 years for the
Predecessor, and ranging from 3 to 15 years for the Successor based on
independent appraisals.

ADVANCE RENTAL PAYMENTS

Advance payments to location owners are amortized on a straight-line basis
over the contract term, which generally ranges from 5 to 10 years.

INTEREST EXPENSE

Interest expense is reported net of interest income of $148,000, $112,000,
$75,000 and $106,000 for 1995S, 1995P, and fiscal years 1994 and 1993,
respectively.

LOSS PER SHARE

In the 1995P period and in fiscal 1994 and 1993, loss per share for the
Predecessor company was calculated based upon the weighted average number of
common shares and Class A common shares outstanding. Stock options
outstanding, which are common stock equivalents, have not been included as
they are antidilutive. Weighted average shares outstanding were 15,455,000 for
1995P, 15,559,000 for fiscal 1994 and 15,640,000 for fiscal 1993. Loss per
share data is not presented for the 1995S period as Solon became a wholly-
owned subsidiary of GTCR.

TRANSACTIONS WITH AFFILIATES

During 1995S, the Company reimbursed its parent company $114,000 for certain
restructuring costs.

A former principal shareholder provided certain administrative and clerical
services to Solon through October 1, 1993. Charges for such services,
including office rental, were $270,000 for fiscal year 1993.

F-27
<PAGE>

COINMACH CORPORATION AND SUBSIDIARIES
(FORMERLY SOLON AUTOMATED SERVICES, INC.)

NOTES TO COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

INCOME TAXES

Effective October 2, 1993, Solon implemented the provisions of Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes"
("Statement 109"). The accounting change had an immaterial effect on the
consolidated financial statements. Statement 109 requires the asset and
liability method of accounting for income taxes. Under the asset and liability
method of Statement 109, deferred tax assets and liabilities are recognized
for the future tax consequences attributable to differences between the
financial statement carrying amounts of existing assets and liabilities and
their respective tax bases. Statement 109 requires that any tax benefits
recognized for net operating loss carryforwards and other items be reduced by
a valuation allowance where it is more likely than not that the benefits may
not be realized. Deferred tax assets and liabilities are measured using
enacted tax rates expected to apply to taxable income in the years in which
those temporary differences are expected to be recovered or settled. Under
Statement 109, the effect on deferred tax assets and liabilities of a change
in tax rates is recognized in income in the period that includes the enactment
date.

IMPAIRMENT OF LONG-LIVED ASSETS

In March 1995, the Financial Accounting Standards Board issued Statement No.
121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to Be Disposed Of" ("Statement 121"), which requires impairment losses
to be recorded on long-lived assets used in operations when indicators of
impairment are present and the undiscounted cash flows estimated to be
generated by those assets are less than the assets' carrying amount. Statement
121 also addresses the accounting for long-lived assets that are expected to
be disposed of. The Company is required to adopt Statement 121 effective March
30, 1996 and, based on current circumstances, does not believe the effect of
adoption will be material.

2. BUSINESS COMBINATIONS

THE SOLON ACQUISITION

Solon entered into a Stock Purchase Agreement, dated as of March 7, 1995, with
Ford Coin Laundries, Inc. ("Ford"), Kwik Wash Laundries, Inc. ("Kwik Wash"),
and certain stockholders of the Predecessor company (the "Sellers"), whereby
Ford purchased from the Sellers all of the Solon's outstanding Common Stock
(the "Common Stock") and substantially all of the Solon's Class A Common Stock
(the "Class A Common Stock") (collectively, the "Shares"). The purchase price
for the Shares was $.7457 per share, for an aggregate purchase price of $11.5
million. The foregoing transaction closed and the purchase price was funded on
April 5, 1995. The source of funds used by Ford for the Shares was the cash
proceeds from the sales by Ford to (i) SAS of the Ford Non-Voting Common
Stock, pursuant to a Stock Purchase Agreement, dated April 4, 1995, and (ii)
to the holders of the Ford Voting Common Stock (collectively, the "Ford
Holders"), an option pursuant to a Letter Agreement dated April 4, 1995. As of
April 5, 1995, Ford beneficially owned, and had the sole power to dispose of,
the Shares. The Shares beneficially owned by Ford represented 100% of the
outstanding Common Stock and approximately 97% of the outstanding Class A
Common Stock.

Pursuant to the Stock Purchase Agreement with Ford, SAS purchased from Ford
all of the outstanding shares of Ford's non-voting Class A Common Stock (the
"Ford Non-Voting Common Stock"). The purchase price for the Ford Non-Voting
Common Stock was $11,400 per share, for an aggregate purchase price of $11.4
million. The sources of the funds used by SAS for the Ford Non-Voting Common
Stock were certain shareholders of TCC, including Golder Thoma Cressey Rauner
Fund IV, L.P. ("GTCR"). As of April 5, 1995, SAS beneficially owns, and has
the sole power to dispose of, 1,000 shares of the Ford Non-Voting Common
Stock.

F-28
<PAGE>

COINMACH CORPORATION AND SUBSIDIARIES
(FORMERLY SOLON AUTOMATED SERVICES, INC.)

NOTES TO COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

Pursuant to the Letter Agreement dated April 4, 1995, with the Ford Holders
and TCC, the Ford Holders granted to SAS, among other things, an option (the
"Option") to purchase from the Ford Holders, subject to the terms and
conditions contained therein, all of the voting shares of Ford's Common Stock
(the "Ford Voting Common Stock"), for an aggregate purchase price of $100,000.
On April 28, 1995, SAS exercised the Option. The sources of funds used by SAS
to exercise the Option were substantially the same sources used to purchase
the Ford Non-Voting Common Stock. As of April 28, 1995, SAS beneficially owns,
and has the sole power to vote and dispose of, ten shares of the Ford Voting
Common Stock.

Current shareholders of TCC and their affiliates were entitled to participate
in the equity of entities that control Solon on a pro rata basis generally in
accordance with their respective equity interests in TCC.

Solon incurred costs aggregating $848,000 in connection with the foregoing
transactions (collectively, the "Change of Control"), including a total of
$387,000 in lump sum payments made to fourteen management employees pursuant
to certain contractual arrangements relating to the Change of Control. The
total costs have been reflected as an extraordinary item in the accompanying
financial statements.

The Stock Purchase Agreement was accounted for as a purchase and, according to
a practice known as "push-down" accounting, as of April 5, 1995, Solon
adjusted its consolidated assets and liabilities to their estimated fair
values, based on preliminary independent appraisals, evaluations, estimations
and other studies. Reflected below is a summary of these adjustments (in
thousands):

THE TCC ACQUISITION

TCC was incorporated in January 1995 and was capitalized primarily through an
equity investment by an investor group led by the majority shareholder, GTCR,
and senior management and bank financing.

TCC is a holding company which was formed to acquire partnership interests in
Coinmach Industries Co. ("Industries") and Super Laundry Equipment Co. L.P.
("Super Laundry"). On January 31, 1995, TCC acquired its partnership interests
in Industries and Super Laundry from CIC I Acquisition Corp. ("CIC I"). The
transaction resulted in TCC owning 100% interests in both Industries and Super
Laundry. The aggregate purchase price for these interests was $8.57 million,
paid in cash. The acquisition was accounted for using the purchase method of
accounting. The fair value of assets acquired (based on an independent
appraisal for certain assets) less liabilities assumed exceeded the purchase
price by approximately $7.7 million. The excess was allocated to property,
equipment and intangible assets ratably based on their respective fair values.

F-29
<PAGE>

COINMACH CORPORATION AND SUBSIDIARIES
(FORMERLY SOLON AUTOMATED SERVICES, INC.)

NOTES TO COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

THE MERGER WITH TCC

On November 30, 1995, Solon completed a merger ("Merger") with TCC and Solon
through an exchange of stock. Shares of common stock of SAS were issued in
exchange for all of the issued and outstanding shares of common stock of TCC.
SAS then contributed its stock of TCC to Solon. Solon became the surviving
corporation after the merger, whereupon it changed its name to Coinmach
Corporation. Details of the results of operations of TCC and Solon for the
period prior to the merger are as follows (in thousands):

<TABLE>
<CAPTION>
APRIL 5, 1995 TO SEPTEMBER 29, 1995
----------------------------------------
SOLON TCC COMBINED
----------- ----------- --------------
<S> <C> <C> <C>
Revenues............................. $ 51,256 $ 38,463 $ 89,719
Operating income..................... 1,410 2,323 3,733
Net loss............................. (5,496) (450) (5,946)
</TABLE>

The combined financial results presented above include an adjustment to
decrease TCC's net loss by approximately $185,000, to conform its accounting
policy for the capitalization of machine installation costs to that of Solon.
Intercompany transactions between the two companies for the period presented
were not material.

3. RECEIVABLES

Receivables consist of the following (in thousands):
<TABLE>
<CAPTION>
SEPTEMBER 29, 1995 SEPTEMBER 30, 1994
------------------ ------------------
SUCCESSOR PREDECESSOR
<S> <C> <C>
Trade receivables...................... $1,529 $ 236
Notes receivable....................... 1,783 --
Finance lease receivables.............. 905 816
Other.................................. 411 684
------ ------
4,628 1,736
Allowance for doubtful accounts........ 360 34
------ ------
$4,268 $1,702
====== ======
</TABLE>

Notes receivable, which arise from the sale of laundromats, bear interest at a
weighted average rate of approximately 10% per annum and mature through 1998.
The notes are collateralized by the underlying laundry equipment. The Company
periodically sells notes receivable arising from the sale of laundromats to
third party finance companies. Included in other receivables are finance
reserves, which arise when the Company sells notes and a portion of the
proceeds are retained by the finance company. As the notes are collected, the
finance companies remit a portion of the collections to the Company. Many of
the notes receivable are sold with recourse to the Company (see Note 7).
Control of the notes sold with recourse is surrendered by the Company on the
date of transfer. The Company generally sells its receivables with recourse at
cost; recognizing no gain or loss.

F-30
<PAGE>

COINMACH CORPORATION AND SUBSIDIARIES
(FORMERLY SOLON AUTOMATED SERVICES, INC.)

NOTES TO COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

4. SALE OF EQUIPMENT

Effective September 30, 1994, Solon sold approximately 600 machines for a
total of $407,000 resulting in a pretax gain of $109,000 and a related tax of
$84,000. Prior to the sale, these machines contributed revenues of $343,000
and operating income of $78,000 for fiscal year 1994.

5. RESTRUCTURING COSTS

Restructuring charges consist of one-time costs aggregating approximately $2.2
million, which include approximately $1.3 million of severance payments for 55
of Solon's management, administrative and regional personnel, approximately
$300,000 of costs to relocate Solon's financial and administrative functions
to Roslyn, New York, approximately $100,000 of costs to integrate certain
financial and operating systems, and approximately $500,000 of costs related
to the consolidation of certain of Solon's regional offices. Of the total
restructuring costs of $2.2 million, approximately $300,000 was paid during
the period ended September 29, 1995, approximately $1.4 million is expected to
be paid during the six months ending March 29, 1996, and the remaining portion
of approximately $500,000 is expected to be paid during the fiscal year ending
March 28, 1997. The 55 employee terminations include 5 management employees,
17 corporate staff financial and administrative employees and 33 regional
laundry operational employees. Notifications to employees were made on various
dates through September 1995.

6. DEBT

Substantially all of the Company's debt was retired on November 30, 1995
through an exchange offer (see Note 12).

On June 18, 1992, Solon sold in concurrent private offerings (i) $100 million
principal amount of 12 3/4% Senior Notes due 2001 (the "Senior Notes") and
(ii) $30 million principal amount of 13 3/4% Senior Subordinated Debentures
due 2002 (the "Debentures") with 3,247,885 shares (the "Shares") of the newly
granted Class A Common Stock. Effective November 6, 1992, Solon completed an
exchange offer whereby the holders of the Senior Notes and Senior Subordinated
Debentures exchanged such securities for securities with similar terms and
form which were registered under the Securities Act of 1933.

Interest was payable semiannually on January 15 and July 15 for the Senior
Notes and April 15 and October 15 for the Subordinated Debentures. The Senior
Notes were entitled to mandatory sinking fund payments of $15 million on July
15, 1998 and July 15, 1999, and $20 million on July 15, 2000. In addition,
Solon was obligated annually to offer to purchase Senior Notes at par in an
amount equal to 75% of its excess cash flow (as defined) and the proceeds of
asset dispositions ("Annual Mandatory Purchases"). Solon would have received
credit against Annual Mandatory Purchases for any amounts paid in open market
or other purchases. Solon would have received a credit against the sinking
fund payment requirements for the principal amount of Senior Notes acquired.
No annual mandatory purchases have been required in 1994 or 1993. The
Debentures had no mandatory principal repayment requirements until they
matured on October 15, 2002.

The estimated fair value of Solon's Senior Notes and Subordinated Debentures
at September 29, 1995, based upon limited quoted market activity, approximated
its recorded value.

F-31
<PAGE>

COINMACH CORPORATION AND SUBSIDIARIES
(FORMERLY SOLON AUTOMATED SERVICES, INC.)

NOTES TO COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

Debt issue costs totaling $5.4 million incurred in connection with the 1992
debt offerings are included in other assets and were being amortized over the
term of the Senior Notes and Debentures. Accumulated amortization is $2.2
million and $1.5 million at September 29, 1995 and September 30, 1994,
respectively.

On December 30, 1992, Solon entered into a loan and security agreement
("Credit Facility") which provided for a three-year revolving line of credit
in the amount of up to $5 million. Interest on the borrowing was based on
prime plus 2.875%, but in no event would the interest be less than the greater
of 8% per annum or $15,000 per month. Solon was also required to pay a monthly
service fee of $2,000 and an annual facility fee of 1% of the $5 million
available under the Credit Facility. Borrowings under the Credit Facility were
secured by accounts receivable, bank deposit accounts, equipment and general
intangibles of Solon. Additionally, Solon was required to maintain a joint
cash depository account with the lender. All cash collections were required to
be deposited in this account before being transferred to Solon's account.
Amounts borrowed and repaid during fiscal 1995 and 1994 totaled $2.0 million
and $10.1 million, respectively. No borrowings were outstanding under the
Credit Facility at September 29, 1995 and September 30, 1994.

At the time of the purchase of Solon in 1987, Solon entered into interest rate
exchange agreements on $70 million notional principal. These agreements were
accounted for as hedges and reduced the effective interest rate on Solon's 14%
Subordinated Sinking Fund Debentures due 1999 (the "Debentures") to
approximately 13% through June 16, 1993. The Debentures were retired in 1992.
Solon recorded a reduction of interest expense of $539,000 for fiscal year
1993 as a result of these agreements.

Debt outstanding under the long-term credit facility and other debt of TCC as
of September 29, 1995, consists of the following (in thousands):

<TABLE>
<S> <C>
Revolving line of credit, due January 31, 2000. Interest at prime
plus 1.25% (10.25% at September 29, 1995)....................... $ 2,880
Term loan A, quarterly payments of $250 commencing April 1, 1996,
and increasing to $500 April 1, 1997, $1,250 April 1, 1998 and
$1,500 April 1, 1999. Interest at prime plus 1.25% (10.25% at
September 29, 1995)............................................. 14,000
Term loan B, quarterly payments of $1,750 commencing April 1,
2000 and increasing to $2,000 April 1, 2001 with the final two
payments of $1,750 on April 1, 2002 and July 1, 2002. Interest
at prime plus 1.75% (10.75% at September 29, 1995).............. 18,500
Term loan C, due July 1, 2002. Interest at 12.5%................. 7,500
-------
42,880
Other debt....................................................... 597
-------
$43,477
=======
</TABLE>
The long-term credit facility provided for $40 million in term loans and $10
million in aggregate for revolving credit and acquisition loan facilities.

The revolving line of credit agreement provided for up to $5 million in
borrowings, including letters of credit up to a maximum of $1 million. There
was a one-half of one percent fee per annum on the unused portion of this
facility and a two percent letter of credit fee.

The long-term credit facility also provided for acquisition loans of up to $5
million. The acquisition loans were to be used to finance acquisitions or
capital expenditures attributed to growth. Any amounts outstanding under

F-32
<PAGE>

COINMACH CORPORATION AND SUBSIDIARIES
(FORMERLY SOLON AUTOMATED SERVICES, INC.)

NOTES TO COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

the acquisition line as of January 31, 2000 were to be repaid in equal
quarterly installments through July 1, 2002. Borrowings under the acquisition
line bear interest at prime plus 1.75%. There were no acquisition loans
outstanding as of September 29, 1995.

The Financing Agreement relating to the long-term credit facility required
TCC, among other things, to maintain certain financial ratios and restricted
additional investments and indebtedness. Management believes TCC was in
compliance with all covenants contained in this Financing Agreement. Loans
outstanding under this agreement were subject to prepayment upon the
occurrence of certain events such as asset dispositions, public offerings and
the generation of excess cash flow, as defined. TCC may be subject to
prepayment penalty on any fixed rate borrowings.

Industries and Super Laundry are the borrowers under the Financing Agreement.
The facility is guaranteed by TCC. Borrowings are secured by all of the assets
of TCC.

Other debt includes payments due under noncompete agreements.

Maturities of debt for TCC at September 29, 1995 are contractually payable as
follows (in thousands):

<TABLE>
<S> <C>
Years ending September:
1996............................................................. $ 873
1997............................................................. 1,724
1998............................................................. 3,500
1999............................................................. 5,500
2000............................................................. 7,630
Thereafter....................................................... 24,250
-------
$43,477
=======
</TABLE>

The Company made cash payments for interest of $10.9 million, $8.5 million,
$17.1 million and $17.3 million for 1995S, 1995P, and fiscal years 1994 and
1993, respectively.

7. RETIREMENT SAVINGS PLAN

Effective October 1, 1987, Solon formed the Solon Automated Services
Retirement Savings Plan (the "Plan"). The Plan is a defined contribution plan
available to all full-time Solon employees who have completed one year of
service. Under the terms of the Plan, Solon matches employee contributions at
a percentage determined annually by the Board of Directors. Solon provided for
matching contributions of 25% in 1995, 25% in 1994 and 50% in 1993. During
fiscal 1994 and 1993, Solon issued $103,000 and $165,000, respectively, of its
Common Stock to satisfy its accrued obligations to the Plan. The number of
shares issued to the Plan is based upon the appraised value of the stock which
is determined annually by an independent appraiser. During fiscal 1995, Solon
made a cash contribution of $80,000 to satisfy its fiscal 1994 obligations to
the Plan. Solon will fund the fiscal 1995 Company match through a cash
contribution in 1996.

TCC has established a defined contribution plan for substantially all of its
employees. TCC's contributions to the plan for 1995S amounted to approximately
$42,500.

The Company has no obligations for other postretirement benefits.

8. STOCK OPTION PLAN

F-33
<PAGE>

COINMACH CORPORATION AND SUBSIDIARIES
(FORMERLY SOLON AUTOMATED SERVICES, INC.)

NOTES TO COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

As of September 29, 1995, September 30, 1994 and October 1, 1993, there was a
total of 212,000, 970,000, and 1,174,000 stock options outstanding,
respectively, exercisable at prices between $.98 and $1.23 per common share.
No options had been exercised since Solon adopted the Plan. As a result of the
merger with TCC, the Plan was canceled; participants in the Plan received in
aggregate consideration of approximately $34,000.

9. INCOME TAXES

As of September 29, 1995 and September 30, 1994, the components of the
Company's net deferred tax liabilities were as follows (in thousands):

<TABLE>
<CAPTION>
SEPTEMBER 29, SEPTEMBER 30,
1995 1994
------------- -------------
SUCCESSOR PREDECESSOR
<S> <C> <C>
DEFERRED TAX LIABILITIES:
Accelerated tax depreciation.................. $26,804 $ 9,239
Other, net.................................... 3,355 2,293
------- -------
30,159 11,532
------- -------
DEFERRED TAX ASSETS:
Net operating loss carryforwards.............. 4,600 7,200
Book over tax depreciation.................... 742 --
Valuation allowance for deferred tax assets... (460) (3,700)
------- -------
4,882 3,500
------- -------
Net deferred tax liabilities.................... $25,277 $ 8,032
======= =======
</TABLE>

As of April 5, 1995, the deferred tax asset and related valuation allowance
relating to Solon were netted and reduced to $2.6 million to reflect the net
operating loss available pursuant to limitations imposed under provisions of
the Internal Revenue Code regarding changes in ownership. In addition, as of
April 5, 1995, TCC recorded a deferred tax asset of $460,000 with a valuation
allowance of the same amount. The deferred tax asset recorded in the Successor
period does not reflect a valuation allowance because the loss can be utilized
against the deferred tax liabilities in the carryforward period. The net
operating loss carryforwards, which expire between fiscal years 2001 through
2007, consist of approximately $7 million (after the limitation) relating to
the Predecessor company and approximately $5 million relating to the Successor
company.

During the fourth quarter of fiscal 1994, Solon evaluated the realizability of
previously recorded deferred tax assets and concluded that due to certain
transactions which have occurred subsequent to October 1, 1993, it was more
likely than not that such assets would not be fully realizable. Accordingly,
Solon established a $3.7 million valuation allowance as of September 30, 1994.
The charge for this valuation allowance is included in the deferred tax
provision in the accompanying Consolidated Statement of Operations.

F-34
<PAGE>

COINMACH CORPORATION AND SUBSIDIARIES
(FORMERLY SOLON AUTOMATED SERVICES, INC.)

NOTES TO COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

9. INCOME TAXES

The provision (benefit) for income taxes consists of (in thousands):

Deferred taxes relate primarily from timing differences resulting from using
accelerated depreciation for tax purposes and straight-line depreciation for
financial reporting purposes. The 1993 deferred tax benefit results from the
reversal of previously provided deferred tax credits in recognition of current
losses.

The Company made cash payments for income taxes of approximately $280,000,
$29,000 and $268,000 for 1995S and fiscal years 1994 and 1993, respectively.
There were no income tax payments made in 1995P.

10. COMMON STOCK

Solon and its stockholders had entered into a Stockholders' Agreement dated as
of September 28, 1987. Pursuant to this Agreement, Solon was required to
purchase shares of its common stock from selling management stockholders or
their estates in the event of death, disability, termination of employment,
and certain other circumstances. Pursuant to the terms of the Stockholders'
Agreement, such purchases were made based on the higher of the stockholders'
cost or by an earnings related formula defined in the Agreement. During fiscal
1994 and 1993, Solon acquired 270,000 and 10,000 shares, respectively,
pursuant to this Agreement at a total cost of $270,000 and $10,000,
respectively, from management stockholders. Such shares have been retired and
canceled. The Stockholders' Agreement was terminated effective July 12, 1994.

Class A Common stockholders have no voting rights other than on matters
involving consolidation or merger, sale or transfer of all or substantially
all assets or any liquidation, dissolution or winding up of Solon. Solon's
Certificate of Incorporation provides that immediately prior to the closing of
any initial public offering of Common Stock, all outstanding shares of Class A
Common Stock will be deemed to have been converted into a like number of
shares of Common Stock.

F-35
<PAGE>

COINMACH CORPORATION AND SUBSIDIARIES
(FORMERLY SOLON AUTOMATED SERVICES, INC.)

NOTES TO COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

On November 30, 1995, the Company effected a recapitalization, whereby it
reduced its authorized $.01 par value common stock to 1,000 shares and issued
100 shares to the holders of the then outstanding stock. All references in the
Successor period reflect this recapitalization.

Receivables from shareholders reflect advances to SAS of $2,000,000 and notes
receivable from management who are shareholders of SAS of $338,000. Such
amounts have been reflected as reductions of shareholders' equity in the
accompanying Successor period balance sheet.

11. COMMITMENTS AND CONTINGENCIES

Rental expense for all operating leases, which principally cover office
facilities and vehicles, was $1,139,000, $807,000, $1,577,000 and $1,769,000
for 1995S, 1995P, and fiscal years 1994 and 1993, respectively.

The following is a schedule of the future minimum rental commitments under all
noncancelable leases as of September 29, 1995 (in thousands):

<TABLE>
<S> <C>
1996............................................................... $1,885
1997............................................................... 1,359
1998............................................................... 943
1999............................................................... 534
2000 and future periods............................................ 1,217
------
$5,938
======
</TABLE>

The Company is contingently liable on receivables sold with recourse to
finance companies by TCC. The total amount of such receivables outstanding as
of September 29, 1995 is approximately $4 million.

As of September 30, 1994, Solon had a program pursuant to which change of
control and severance payments would be made to 14 management employees
following any sale of all of the Common Stock held by nonemployee
stockholders. Change of control payments were based on annual salaries at the
time of such sale. Severance payments were provided if, following any such
sale, the participant was not retained in a position comparable to that held
prior to the sale for a period between three to four months. In connection
with the change in control described in Note 2, payments aggregating $387,000
were made pursuant to this program.

12. SUBSEQUENT EVENT

On November 30, 1995, the Company completed an exchange offer with
substantially all the holders of the Senior Notes and Subordinated Debentures.
Through December 14, 1995, the Company issued a total of $196.7 million of 11
3/4% Senior Notes due 2005 (the "Notes") which enabled the Company to complete
this exchange offer, consummate the merger with TCC and retire its remaining
debt, and provide additional working capital. The Company incurred costs of
$4.2 million, net of income taxes, related to a 5.5% premium paid to retire
its

F-36
<PAGE>

COINMACH CORPORATION AND SUBSIDIARIES
(FORMERLY SOLON AUTOMATED SERVICES, INC.)

NOTES TO COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

Senior Notes and Subordinated Debentures and wrote-off the unamortized balance
of the related original issue discount and deferred finance costs of
approximately $800,000 and $1.9 million, net of income taxes, respectively.
The Company also incurred costs related to the retirement of a revolving
credit facility of TCC of approximately $1.9 million, net of income taxes.

Interest on the Notes is payable semi-annually on May 15 and November 15. The
Notes are redeemable at the option of the Company at any time after November
15, 2000 at a price equal to 105 7/8% declining to par if redeemed after
November 15, 2002. The Notes contain certain financial covenants and a
registration rights agreement, whereby the Company has agreed to file a
Registration Statement with the Securities and Exchange Commission.

On November 30, 1995, the Company entered into a new revolving credit
facility, ("New Credit Facility"), which provides up to a maximum of $35.0
million. Availability under the New Credit Facility is limited by an amount
equal to one semi-annual interest payment on the Notes. Interest on the
borrowings is payable monthly at a rate per annum no greater than the sum of
LIBOR plus 2.50%. The Company is obligated to pay an unused line fee in an
amount equal to 0.5% of the unused availability payable monthly in arrears.
Borrowings under the New Credit Facility are secured by real and personal
property of the Company.

F-37
<PAGE>

LETTERHEAD OF KPMG PEAT MARWICK

INDEPENDENT AUDITORS' REPORT

The Board of Directors
CIC I Acquisition Corp.:

We have audited the accompanying consolidated balance sheets of CIC I
Acquisition Corp. and subsidiaries (the Company) as of December 31, 1994, and
the related consolidated statements of operations, stockholders' deficiency
and cash flows for each of the years in the two-year period ended December 31,
1994. 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.

As discussed in note 14 of the accompanying notes to the consolidated
financial statements, on January 31, 1995, the Company sold its partnership
interests in its operating subsidiaries to a new corporation, The Coinmach
Corporation.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of CIC I
Acquisition Corp. and subsidiaries as of December 31, 1994, and the results of
their operations and their cash flows for each of the years in the two-year
period ended December 31, 1994, in conformity with generally accepted
accounting principles.

/s/ KPMG Peat Marwick LLP

New York, New York
April 28, 1995

F-38
<PAGE>

CIC I ACQUISITION CORP. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET

DECEMBER 31, 1994
(DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
1994
--------
<S> <C>
ASSETS
Cash................................................................. $ 987
Receivables, net of reserves of $473................................. 4,198
Inventories.......................................................... 2,154
Prepaid commissions.................................................. 3,264
Property and equipment:
Laundry equipment.................................................. 21,487
Leasehold improvements............................................. 10,438
Office equipment................................................... 1,900
Automobiles and trucks............................................. 2,903
--------
36,728
Less accumulated depreciation...................................... 20,443
--------
Net property and equipment....................................... 16,285
Goodwill, net of accumulated amortization of $1,845.................. 6,710
Other intangibles, net of accumulated amortization of $8,678......... 2,209
Other assets......................................................... 1,117
--------
$ 36,924
========
LIABILITIES AND COMMON STOCKHOLDERS' DEFICIENCY
Accounts payable..................................................... $ 2,365
Accrued expenses..................................................... 2,012
Accrued interest..................................................... --
Commissions payable.................................................. 3,156
Long-term debt (including $350 of management loans).................. 42,184
Other long-term liabilities.......................................... 488
Minority interest.................................................... 135
Common stockholders' deficiency:
Common stock, par value $.01; authorized 1,000,000 shares; issued
and outstanding 87,000 shares in 1994 and 148,729 shares in 1993.. 1
Consideration to continuing predecessor interests in excess of book
value............................................................... --
Additional paid-in capital........................................... 39,869
Accumulated deficit.................................................. (53,286)
--------
Total stockholders' deficiency..................................... (13,416)
--------
$ 36,924
========
</TABLE>

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

F-39
<PAGE>

CIC I ACQUISITION CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED DECEMBER 31, 1994 AND 1993
(DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
1994 1993
------- --------
<S> <C> <C>
Revenues.................................................... $73,857 $ 71,859
Laundry operating expenses.................................. 54,737 52,805
General and administrative expenses......................... 4,938 5,570
Depreciation and amortization of property and equipment..... 7,785 8,011
Amortization of intangibles and other assets................ 6,719 7,245
------- --------
Operating loss.............................................. (322) (1,772)
Interest expense............................................ 4,012 3,685
Interest expense--subordinated notes........................ 0 6,824
Non-cash charges related to management loans................ 1,341 0
------- --------
Loss before income taxes and extraordinary item............. (5,675) (12,281)
Income taxes................................................ 27 17
------- --------
Loss before extraordinary item.............................. (5,702) (12,298)
Extraordinary item--early extinguishment of debt............ 20,420 0
------- --------
Net (loss) income........................................... $14,718 $(12,298)
======= ========
</TABLE>

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

F-40
<PAGE>

CIC I ACQUISITION CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIENCY

FOR THE YEARS ENDED DECEMBER 31, 1994 AND 1993
(DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
CONSIDERATION TO
COMMON STOCK CONTINUING PREDECESSOR ADDITIONAL TOTAL
---------------- INTERESTS IN EXCESS PAID-IN ACCUMULATED STOCKHOLDERS'
SHARES AMOUNT OF BOOK VALUE CAPITAL DEFICIT DEFICIENCY
-------- ------ ---------------------- ---------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Balance January 1,
1993................... 148,729 $ 1 $(11,756) $ 0 $(42,240) $(53,995)
Accrued preferred
dividends.............. (1,710) (1,710)
Net loss................ (12,298) (12,298)
-------- --- -------- ------- -------- --------
Balance December 31,
1993................... 148,729 1 (11,756) 0 (56,248) (68,003)
Net income.............. 14,718 14,718
Effects of restructuring
transaction (see note
7):
Shares surrendered
pursuant to
restructuring.......... (148,729) (1) 11,756 (11,756) (1)
Shares issued pursuant
to restructuring....... 87,000 1 24,164 24,165
Surrender of preferred
stock.................. 14,364 14,364
Non-cash charge related
to issuance of
management loan........ 1,341 1,341
-------- --- -------- ------- -------- --------
Balance December 31,
1994................... 87,000 $ 1 $ 0 $39,869 $(53,286) $(13,416)
======== === ======== ======= ======== ========
</TABLE>

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

F-41
<PAGE>

CIC I ACQUISITION CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 1994 AND 1993
(DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
1994 1993
-------- --------
<S> <C> <C>
Cash flows from operating activities:
Net (loss) income........................................ $ 14,718 $(12,298)
Adjustments to reconcile net (loss) income to net cash
provided by
operating activities:
Depreciation and amortization.......................... 14,504 15,256
Minority interest in loss of consolidated subsidiary... (10) (19)
Provision for bad debts................................ 229 73
Increase in accrued interest........................... 0 6,824
Non-cash charges relating to management loans.......... 1,341 0
Non-cash portion of extraordinary item................. (23,487) 0
Changes in assets and liabilities:
Change in receivables................................ 732 (160)
Change in prepaid commissions, net of commissions
payable............................................. (1,236) (1,600)
(Increase) decrease in inventories................... (349) 500
(Increase) decrease in other assets.................. 2,766 (2,025)
(Decrease) increase in accounts payable and accrued
expenses............................................ (484) 1,185
-------- --------
Net cash provided by operating activities............ 8,724 7,736
-------- --------
Cash flows from investing activities:
Purchase of laundry equipment............................ (4,710) (4,089)
Purchase of fixed assets................................. (1,861) (1,790)
Additions to intangibles................................. (6) (240)
-------- --------
Net cash used in investing activities.................. (6,577) (6,119)
-------- --------
Cash flows from financing activities:
Net repayments under revolving credit facility........... (2,019) (857)
Payment of other debt.................................... (474) (200)
Management loans......................................... 350 0
Principal payments of capital lease obligations.......... (404) (348)
-------- --------
Net cash used in financing activities.................. (2,547) (1,405)
-------- --------
Net (decrease) increase in cash........................ (400) 212
Cash at beginning of period................................ 1,387 1,175
-------- --------
Cash at end of period...................................... $ 987 $ 1,387
======== ========
</TABLE>

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

F-42
<PAGE>

CIC I ACQUISITION CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 1994 AND 1993
(DOLLARS IN THOUSANDS)

(1)ORGANIZATION AND BASIS OF PRESENTATION

See note 14 for subsequent event.

CIC I Acquisition Corp. ("CIC" or "Company") is a holding company that owns
Coinmach Industries Co. ("Coinmach") and Super Laundry Equipment Co. L.P.
("Super Laundry"). CIC was formed in 1989 expressly for the purpose of
acquiring an 85% general partnership interest in Coinmach and all of the
common stock of Super Laundry Equipment Corp., a predecessor company to
Super Laundry.

Coinmach is principally engaged in providing laundry equipment and related
services to multi-family housing complexes in the New York metropolitan
area. Super Laundry is principally a supplier of coin-operated laundromat
equipment, and turnkey laundromat retail stores in the New York
metropolitan area.

On January 31, 1995, the Company sold its partnership interest in Coinmach
and Super Laundry to a new corporation, The Coinmach Corporation (see note
14).

On December 15, 1993, CIC, on a stand alone basis, completed a "pre-
packaged" voluntary petition for reorganization under Chapter 11 of the
United States Bankruptcy Code (the "Plan"), which was approved by 100% of
the Company's shareholders and creditors. Neither Coinmach nor Super
Laundry were parties to this agreement. The Plan provided for the Company's
existing senior subordinated notes, junior subordinated promissory notes,
preferred stock and common stock to be exchanged for 87,000 shares of
common stock valued at $24,163. The Plan, which was confirmed and court
approved on January 21, 1994, and became effective February 4, 1994, has
been reflected in the 1994 financial statements and has been recorded in
accordance with the guidelines provided by the Financial Accounting
Standards Board (FASB 15 "Accounting for Troubled Debt Restructuring").
Pursuant to the Plan, the Company also amended its then existing revolving
and term loan agreement (see note 6(a)). As a result of the above, the
Company recognized an extraordinary gain, net of legal fees and other
direct costs of $20,420 on the early extinguishment of the debt. The
Company also incurred $1,341 in non-cash expenses related to the estimated
fair value of the equity conversion feature of debt issued pursuant to the
Plan (see note 6). In addition, the minority partners in Coinmach
extinguished their ownership positions and the Company now effectively owns
100% of Coinmach (see note 7).

(2)SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a)PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of CIC, Coinmach
and Super Laundry. All significant intercompany balances and transactions
have been eliminated in consolidation.

(b)INVENTORIES

Inventories are stated at the lower of cost or market. Cost is principally
determined using the first-in, first-out method. Inventories include
laundry equipment, spare parts and construction costs.

(c)REVENUE RECOGNITION

F-43
<PAGE>

CIC I ACQUISITION CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

DECEMBER 31, 1994 AND 1993
(DOLLARS IN THOUSANDS)

complete when all costs have been incurred and either the installation is
operating according to specifications or has been accepted by the customer.
The duration of such contracts is normally less than six months.

Sales of laundromats were approximately $14,579 and $13,054 for the years
ended December 31, 1994 and 1993, respectively.

(d)PROPERTY AND EQUIPMENT

Laundry equipment, consisting primarily of commercial washers and dryers,
and fixed assets, are stated at cost. The cost of remanufacturing equipment
is included in the cost of laundry equipment. The cost of laundry room
improvements is included in leasehold improvements. The Company capitalized
remanufacturing and laundry room improvement costs of approximately $2,848
and $2,639 for the years ended December 31, 1994 and 1993, respectively.

Depreciation of laundry equipment and fixed assets is calculated using the
straight-line method over their estimated useful lives, generally five
years. Leasehold improvements are amortized using the straight line method
over the shorter of the lease term or estimated useful life of the asset.
The Company's policy is to write-off fully depreciated assets and the
related accumulated depreciation and amortization. Depreciation expense was
approximately $7,785 and $8,011 for the years ended December 31, 1994 and
1993, respectively.

The Company reviews the undiscounted cash flows of its laundry locations in
assessing whether its property and equipment (primarily laundry equipment
and laundry room improvements) may be impaired. The Company does not
believe that the adoption of Statement of Financial Accounting Standards
No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long
Lived Assets to be Disposed Of" will have a material impact on the
Company's financial position or results of operations.

(e)PREPAID COMMISSIONS

The Company capitalizes contractually required advance commissions and
certain incentive payments paid in connection with the acquisition of its
contractual rights to laundry room locations. Such amounts are amortized on
a straight-line basis over the life of the related lease or the related
contractual agreement. Amortization expense on prepaid commissions amounted
to approximately $593 and $557 for the years ended December 31, 1994 and
1993, respectively.

(f)CONTRACTS RIGHTS

Contract rights represent amounts expended for location contracts arising
from the acquisition of laundry machines on location. These amounts are
amortized on a straight-line basis over the remaining life of the
corresponding contract. Amortization expense on contract rights was $3,443
and $4,075 for the years ended December 31, 1994 and 1993, respectively.

(g)INTANGIBLES

Intangibles, consisting principally of covenants not to compete, computer
software and deferred financing costs are amortized over their estimated
useful lives. Amortization expense on intangibles amounted to approximately
$2,375 and $2,100 for the years ended December 31, 1994 and 1993,
respectively.

(h)GOODWILL

Goodwill is being amortized, using the straight-line method, over 40 years.
Amortization expense on goodwill amounted to $308 and $301 for the years
ended December 31, 1994 and 1993, respectively. The Company periodically
evaluates the recoverability of goodwill based on the undiscounted cash
flows of the businesses acquired.

F-44
<PAGE>

CIC I ACQUISITION CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

DECEMBER 31, 1994 AND 1993
(DOLLARS IN THOUSANDS)

(i)INCOME TAXES

In February 1992, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 109, Accounting for Income Taxes.
Statement 109 required a change from the deferred method of accounting for
income taxes of APB Opinion 11 to the asset and liability method of
accounting for income taxes. Under the asset and liability method of
Statement 109, deferred tax assets and liabilities are recognized for the
future tax consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and their
respective tax bases. Deferred tax assets and liabilities are measured
using enacted tax rates expected to apply to taxable income in the years in
which those temporary differences are expected to be recovered or settled.
Under Statement 109, the effect on deferred tax assets and liabilities of a
change in tax rates is recognized in income in the period that includes the
enactment date. The Company adopted Statement 109 as of January 1, 1993,
the effect of which was not material to the Company's consolidated
financial statements.

(3)RECEIVABLES

Receivables consist of the following:

<TABLE>
<CAPTION>
1994
------
<S> <C>
Accounts receivable............................................. $1,627
Notes receivable................................................ 2,437
Finance reserves................................................ 607
------
4,671
Allowance for doubtful accounts................................. (473)
------
$4,198
======
</TABLE>

At December 31, 1994, notes receivable bear interest at a weighted average
interest rate of approximately 10% and mature through 1998. The notes are
collateralized by the underlying laundry equipment. The Company
periodically sells notes receivable arising from the sale of laundromats to
third party finance companies. Finance reserves arise when the Company
sells notes and a portion of the proceeds are retained by the finance
company. As the notes are collected, the finance companies remit a portion
of the collections to the Company. Many of the notes receivable are sold
with recourse to the Company (see note 8). Control of the notes sold with
recourse is surrendered by the Company on the date of transfer. The Company
generally sells its receivables with recourse at cost, recognizing no gain
or loss.

(4)TRANSACTIONS WITH AFFILIATES

The company sold certain trade notes receivable to Cointrol Credit Co.,
L.P. ("Credit"), a company created in 1991 and owned by certain officers
and directors of the Company and outside investors.

All such notes were sold to yield a fair market rate of return as
determined by rates available from unrelated finance companies for similar
notes. The aggregate outstanding balance of all notes sold to Credit as of
December 31, 1994 was $641. These notes are with recourse to the Company
and mature through 1998. In April 1995, the Company entered into an
agreement with Credit to repurchase the remaining receivables outstanding
at their then face value.

F-45
<PAGE>

CIC I ACQUISITION CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

DECEMBER 31, 1994 AND 1993
(DOLLARS IN THOUSANDS)

(5)INTANGIBLES

Intangibles consist of the following:

<TABLE>
<CAPTION>
ESTIMATED
1994 USEFUL LIVES
------- ------------
<S> <C> <C>
Covenants not to compete........................... $ 4,313 5 years
Computer software.................................. 4,050 5 years
Deferred financing costs........................... 1,552 Life of debt
Other.............................................. 972 5 years
-------
10,887
Accumulated amortization........................... 8,678
-------
$ 2,209
=======
</TABLE>

(6)LONG-TERM DEBT

Long Term debt consists of the following:

<TABLE>
<CAPTION>
1994
-------
<S> <C>
Revolving line of credit, due February 28, 1995, interest at
prime plus 1.75% (a).......................................... $25,848
Term loan, due February 28, 1995 (a)........................... 15,000
Senior subordinated notes, originally due October 1999,
interest at 14.5% (c)......................................... --
Junior subordinated promissory notes, originally due October
2000 (d)...................................................... --
Management loans, due February, 2004, interest at prime plus
1.75%, convertible into 7,000 shares of common stock after
February, 1999 (b)............................................ 350
Other (e)...................................................... 986
-------
$42,184
=======
</TABLE>

On January 31, 1995, the Company sold its partnership interests in Coinmach
and Super Laundry to a new corporation, The Coinmach Corporation.

In connection with this sale, the Company paid off all amounts owed under
its revolver and term loan debt (see note 14). The accompanying financial
statements do not reflect the sale or the related repayment of debt.

On December 15, 1993, the Company finalized negotiations with the holders
of the revolving line of credit, term loan, senior subordinated note
holders, and the junior subordinated promissory note holders. Pursuant to
the Plan, the holders of the subordinated note and the junior notes
exchanged their notes, including accrued interest through December 15,
1993, for 87,000 shares of the restructured company's common stock. The
Plan was confirmed and court approved in January 1994.

F-46
<PAGE>

CIC I ACQUISITION CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

DECEMBER 31, 1994 AND 1993
(DOLLARS IN THOUSANDS)

the first day of each month thereafter, the revolving credit facility
will be reduced by $175 per month through June 1994, and then $212 per
month, until the termination of the facility, including the term loan,
on February 28, 1995.

The interest rate for bank borrowing is the prime rate plus 1.75%. As of
December 31, 1994, the interest rate on these loans was 10.25%. In
addition, the agreement provides for the payment of a facility fee of
.125% per annum on average daily outstanding balances and an unused line
fee of .50% per annum on the average daily balance of the revolving
loans. The agreement contains certain restrictive covenants and requires
the Company, among other things, to maintain certain financial ratios
and to restrict investments, additional indebtedness and payment of
dividends. The loan is secured by all of the assets of the Company. See
Note 14 for description of subsequent event.

(b) Pursuant to the Plan, senior management loaned the Company $350 due
February 4, 2004. Interest is payable monthly, at the rate of 1.75%
over prime. As of December 31, 1994, the interest rate on these loans
was 10.25%. The loans are convertible, upon the earlier of five years
or upon certain circumstances, into 7% of the Company's fully diluted
common stock. These loans, which are subordinated to the revolving line
of credit and the term loan, were funded February 4, 1994 (see note 7).
Based on an independent appraisal, the estimated value of the 7%
interest of the Company (issuable upon conversion of the loans)
exceeded the principal amount of the loans by $1,341. Accordingly, a
non-cash charge equal to such amount was recorded in 1994. The loans
were repaid in connection with the subsequent event described in Note
14.

(c) In 1989 and 1990, the Company sold $30,000 of its 14.5% senior
subordinated notes due October 1999. Interest was payable on April 15
and October 15 of each year commencing April 15, 1990. The notes were
redeemable, at the option of the Company, at amounts decreasing from
114.5% of par value at October 15, 1989 to par value at October 15,
1998. Pursuant to the Plan, the notes were cancelled and an
extraordinary gain was recognized on the early extinguishment of the
debt in 1994 (see note 7).

(d) In 1989, the Company issued junior subordinated promissory notes to the
prior owners of Coinmach. The notes, along with accrued interest, were
cancelled in 1994 pursuant to the Plan (see note 7).

(e) Other debt includes payments due under non-compete agreements.

Maturities of long-term debt at December 31, 1994 are contractually
payable as follows:

<TABLE>
<S> <C>
1995................................. $41,329
1996................................. 376
1997................................. 129
1998................................. 0
Thereafter........................... 350
-------
$42,184
=======
</TABLE>

(7)RESTRUCTURING

On January 31, 1995, the Company sold its partnership interests in Coinmach
and Super Laundry to a new corporation, The Coinmach Corporation (see note
14).

On December 15, 1993, CIC, on a stand alone basis, completed a "pre-
packaged" voluntary petition for reorganization under Chapter 11 for the
United States Bankruptcy Code, which was approved by 100% of the Company's
shareholders and creditors (see note 1). Neither Coinmach nor Super Laundry
were parties to this agreement. The Plan provided for the Company's
existing senior subordinated notes, junior subordinated promissory notes,
preferred stock and common stock to be exchanged for 87,000 shares of
common stock valued at $24,163. The carrying value of the senior
subordinated notes, junior subordinated

F-47
<PAGE>

CIC I ACQUISITION CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

DECEMBER 31, 1994 AND 1993
(DOLLARS IN THOUSANDS)

notes and related accrued interest was $30,000, $1,500, and $16,149,
respectively. The preferred stock and common stock had a net carrying value
of $2,609, consisting of preferred stock of $14,364, and common stock of
$1, offset by the carrying value of the consideration to continuing
predecessor interests in excess of book value of $11,756. The Plan was
confirmed and court approved on January 21, 1994, became effective February
4, 1994, and has been reflected in the 1994 financial statements. In
addition, pursuant to the Plan, the Company amended its then existing
revolving and term loan agreement. As a result of the above, the Company
recognized an extraordinary gain of $20,420, net of legal fees and other
direct costs of $3,067, on the early extinguishment of the debt in 1994. In
addition, $14,364, representing the carrying value of the preferred stock,
is included in stockholders' deficiency. Pursuant to the Plan, the equity
position of the shareholder to which the continuing predecessor interests
were attributed surrendered such position. Consequently, the carrying value
of the continuing predecessor interests has been charged to the accumulated
deficit account. The restructuring has been treated as a tax free exchange
of debt for equity in accordance with the provisions of the Internal
Revenue Service Code.

The Plan required two members of senior management to loan the Company
$350. These loans have an interest rate of prime plus 1.75% and are due in
2004. The loans were funded February 4, 1994, and are reflected in the
accompanying financial statements as long-term debt.

Also pursuant to the Plan the Company entered into non-compete agreements
with two former shareholders totaling approximately $954.

(8)COMMITMENTS AND CONTINGENCIES

Coinmach is obligated under long-term leases relating to revenue equipment
locations. The terms of these leases principally range from three to six
years, most of which provide for fixed monthly commission payments and
contain renewal options. The majority of these leases contain provisions
permitting the cancellation of the lease and/or adjustment of the
commission by Coinmach if minimum revenue levels are not achieved. In
addition, Coinmach rents office and warehouse space from SSB Corporation
("SSB"). SSB is owned by certain individuals who were also owners of the
Company, prior to the Plan. The lease, expiring on May 1, 1995, provides
for annual rentals of $368 and for the payment by Coinmach of all operating
expenses.

Super Laundry leases its facilities from a related party under an operating
lease that expires on December 31, 1996 and provides for a minimum annual
rental of $57 in 1993 increasing to $60 in 1994 and $63 in 1996. Under the
terms of the lease, Super Laundry is required to pay operating costs.
Rental expense for this lease amounted to $72 and $71 for the years ended
December 31, 1994 and 1993, respectively. In addition, Super Laundry also
leases a warehouse from a related party on a month-to-month basis. Rental
expense for this lease amounted to $39 and $42 for the years ended December
31, 1994 and 1993, respectively. Effective January 1, 1993, Super Laundry
entered into a five year lease for a sales office. This lease expires
December 31, 1997 and provides for a minimum annual rental of $23 in 1993,
increasing by 4% each successive year through 1997. The lease also calls
for Super Laundry to pay operating costs. Rental expense including
operating costs for this lease amounted to $24 and $30 for the years ended
December 31, 1994 and 1993, respectively.

Future minimum lease payments under noncancellable operating leases
(excluding commissions for laundry equipment locations) as of December 31,
1994 are as follows:

<TABLE>
<S> <C>
1995.............................................................. $367
1996.............................................................. 108
1997.............................................................. 27
----
Total future minimum lease payments............................. $502
====
</TABLE>

F-48
<PAGE>

CIC I ACQUISITION CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

DECEMBER 31, 1994 AND 1993
(DOLLARS IN THOUSANDS)

Rent expense, excluding commission payments for laundry equipment
locations, amounted to approximately $642 and $599 for the years ended
December 31, 1994 and 1993, respectively.

Super Laundry is contingently liable on receivables sold, with recourse, to
finance companies. The total amount outstanding is approximated at $7,919
as of December 31, 1994.

Under agreements between Super Laundry and certain finance companies, a
portion of the notes receivable sales price is retained by the finance
company until the receivable is collected. Amounts retained under the
agreements amounted to $607 as of December 31, 1994, and are shown in the
accompanying consolidated balance sheets as receivables.

Coinmach has entered into leasing arrangements for automobiles and trucks
and office equipment which are accounted for as capital leases. At December
31, 1994, the gross amount of such assets amounted to $1,646, and
accumulated amortization amounted to $889. Future minimum lease payments as
of December 31, 1994 are as follows:

<TABLE>
<S> <C>
1995.............................................................. $359
1996.............................................................. 133
1997.............................................................. 99
----
Minimum lease payments............................................ 591
Less amount representing interest................................. 103
----
Present value of net minimum lease payments....................... $488
====
</TABLE>

The Company is party to certain lawsuits and claims relating to its
operations. It is the opinion of management, based on the advice of outside
counsel, that such lawsuits and claims will be resolved without material
effect to the Company's consolidated financial statements.

(9)INCOME TAXES

Income tax expense of $27 and $17 for the years ended December 31, 1994 and
1993, respectively, represents state and local taxes.

The tax effects of temporary differences that give rise to significant
portions of the deferred tax assets at December 31, 1994 are presented
below:

<TABLE>
<S> <C>
Deferred tax assets:
Net operating loss carryforwards.......................... $ 21,200
Fixed and intangible assets, principally due to
differences between tax and financial reporting bases.... 3,117
Allowance for doubtful accounts............................. 189
--------
Gross deferred tax assets................................. 24,506
Less valuation allowance.................................... (24,506)
--------
Net deferred tax asset.................................... $ -0-
========
</TABLE>

CIC files a consolidated Federal income tax return with Super Laundry and
includes its equity in the earnings or loss of Coinmach. At December 31,
1994, net operating loss carryforwards of approximately $53,000 are
available to offset future taxable income and expire commencing 2004
through 2009.

F-49
<PAGE>

CIC I ACQUISITION CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

DECEMBER 31, 1994 AND 1993
(DOLLARS IN THOUSANDS)

(10)MULTI-EMPLOYER PLAN

Coinmach participated with other companies in making contributions to a
multi-employer pension plan for the benefit of its union employees.

Contributions to the Plan were $40 for the year ended December 31, 1993.
Effective January 1, 1994, Coinmach no longer participates in the pension
plan.

(11)STOCK OPTION PLAN

Pursuant to the Plan, the Company adopted two stock option plans, which
provide for the grant and exercise of options to purchase up to 6,000
shares of the Company's common stock upon attainment of certain annual
earnings performance goals through 1997. One of the plans is for the
employees of the Company, and provides for the grant and exercise of 5,000
shares. On February 4, 1994, options representing 1,000 shares under this
plan were granted to certain employees and were immediately vested but were
not to be exercisable unless 1994 earnings performance goals were attained.
The employee plan also provides for the grant of options to purchase an
additional 1,000 shares in 1994 and each year through December 31, 1997.
Such options will be vested when granted. The second stock option plan
provides for the grant of options to purchase 1,000 shares to a financial
advisor upon attainment of annual earnings performance goals through 1995.
Under both plans, the options were to expire ten years from the dates of
grant and were exercisable at $50 per share. No options have been exercised
and in connection with the subsequent event described in note 14, the stock
option plans were terminated and all outstanding options were cancelled.

(12)PROFIT SHARING PLAN

Effective April 1, 1994, the Company established a profit sharing and
retirement plan (the "Coinmach Profit Sharing Plan") for substantially all
of its employees. Pursuant to the Coinmach Profit Sharing Plan, eligible
employees may defer up to 15% of their salaries up to a maximum level
imposed by applicable federal law. Coinmach makes matching contributions in
increasing amounts, based upon the number or years of service performed by
eligible participants, up to a maximum of 6% of an eligible employee's
salary. Matching contribution percentages range from 5% for one to two
years of service up to 25% for five or more years of service and vest over
a six year period. Company contributions to the plan for the year ended
December 31, 1994 amounted to $64.

(13)SUPPLEMENTAL CASH FLOW INFORMATION

The Company paid approximately $4,012 and $3,744 for interest for the years
ended December 31, 1994 and 1993, respectively.

The Company entered into leasing arrangements accounted for as capital
leases in the amount of approximately $207 and $406 for the years ended
December 31, 1994 and 1993, respectively.

(14)SUBSEQUENT EVENT

On January 31, 1995, the Company sold its partnership interests in Coinmach
and Super Laundry to a new corporation, The Coinmach Corporation ("Corp.").
In connection with this sale, the Company, Coinmach and Super Laundry paid
off all amounts owed under their existing revolver and term loan debt (see
note 6). Corp. is owned by an investor group (83%) and the management of
Coinmach and Super Laundry (17%). Corp. financed the transaction with
approximately $11,600 of new equity, and debt financing of up to $50,000.
Under the terms of the financing, no principal payments on the debt are due
until April 1996.

F-50
<PAGE>

LETTERHEAD OF KPMG PEAT MARWICK

INDEPENDENT AUDITORS' REPORT

The Board of Directors
CIC I Acquisition Corp.:

We have audited the accompanying consolidated balance sheet of CIC I
Acquisition Corp. and subsidiaries (the Company) as of January 31, 1995, and
the related consolidated statements of operations and accumulated deficit and
cash flows for the one-month period then ended. 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 audit.

We conducted our audit 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 audit provides a reasonable basis
for our opinion.

As discussed in note 13 of the accompanying notes to the consolidated
financial statements, on January 31, 1995, the Company sold its partnership
interests in its operating subsidiaries to a new corporation, The Coinmach
Corporation. The accompanying consolidated financial statements reflect the
financial position, results of operations and cash flows of the Company
immediately prior to the sale.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of CIC I
Acquisition Corp. and subsidiaries as of January 31, 1995, and the results of
their operations and their cash flows for the one-month period then ended, in
conformity with generally accepted accounting principles.

/s/ KPMG Peat Marwick LLP

New York, New York
April 28, 1995

F-51
<PAGE>

CIC I ACQUISITION CORP. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET

JANUARY 31, 1995
(DOLLARS IN THOUSANDS)

ASSETS

<TABLE>
<S> <C>
Cash................................................................. $ 1,162
Receivables, net of reserve of $447.................................. 3,261
Inventories.......................................................... 2,353
Prepaid commissions.................................................. 3,333
Property and equipment:
Laundry equipment.................................................. 21,848
Leasehold improvements............................................. 10,604
Office equipment................................................... 1,917
Automobiles and trucks............................................. 2,934
--------
37,303
Less accumulated depreciation........................................ 21,183
--------
Net property and equipment......................................... 16,120
Goodwill, net of accumulated amortization of $1,883.................. 6,672
Other intangibles, net of accumulated amortization of $8,802......... 2,053
Other assets......................................................... 1,115
--------
$ 36,069
========
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
Accounts payable..................................................... $ 2,197
Accrued expenses..................................................... 2,134
Commissions payable.................................................. 2,935
Long-term debt (including $350 of management loans).................. 41,800
Other long-term liabilities.......................................... 461
Minority interest.................................................... 133
Stockholders' deficiency:
Common stock, par value $.01; authorized 1,000,000 shares; issued
and outstanding 87,000 shares..................................... 1
Additional paid-in capital........................................... 39,869
Accumulated deficit.................................................. (53,461)
--------
Total stockholders' deficiency................................... (13,591)
--------
$ 36,069
========
</TABLE>

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

F-52
<PAGE>

CIC I ACQUISITION CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF OPERATIONS AND ACCUMULATED DEFICIT

FOR THE MONTH ENDED JANUARY 31, 1995
(DOLLARS IN THOUSANDS)

<TABLE>
<S> <C>
Revenues............................................................. $ 5,879
Laundry operating expenses........................................... 4,229
General and administrative expenses.................................. 450
Depreciation and amortization of property and equipment.............. 739
Amortization of intangibles and other assets......................... 241
--------
Operating income..................................................... 220
Interest expense..................................................... 395
--------
Net loss............................................................. (175)
Accumulated deficit at beginning of period........................... (53,286)
--------
Accumulated deficit at end of period................................. $(53,461)
========
</TABLE>

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

F-53
<PAGE>

CIC I ACQUISITION CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE MONTH ENDED JANUARY 31, 1995
(DOLLARS IN THOUSANDS)

<TABLE>
<S> <C>
Cash flows from operating activities:
Net loss............................................................. $ (175)
Adjustments to reconcile net loss to net cash provided by operating
activities:
Depreciation and amortization...................................... 980
Minority interest in loss of consolidated subsidiary............... (2)
Changes in assets and liabilities:
Decrease in receivables.......................................... 937
Change in prepaid commissions, net of commission payable......... (302)
(Increase) in inventories........................................ (199)
Decrease in other assets......................................... 2
(Decrease) in accounts payable and accrued expenses.............. (44)
------
Net cash provided by operating activities........................ 1,197
------
Cash flows from investing activities:
Purchase of laundry equipment........................................ (361)
Purchase of other fixed assets....................................... (215)
Additions to intangibles............................................. (35)
------
Net cash used in investing activities.............................. (611)
------
Cash flows from financing activities:
Net repayments under revolving credit facility....................... (332)
Payment of other debt................................................ (52)
Principal payments of capital lease obligations...................... (27)
------
Net cash used in financing activities.............................. (411)
------
Net increase in cash............................................... 175
Cash at beginning of period............................................ 987
------
Cash at end of period.................................................. $1,162
======
</TABLE>

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

F-54
<PAGE>

CIC I ACQUISITION CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JANUARY 31, 1995
(DOLLARS IN THOUSANDS)

(1)ORGANIZATION AND BASIS OF PRESENTATION

See note 13 for subsequent event.

On January 31, 1995, the Company sold its partnership interests in Coinmach
and Super Laundry to a new corporation, The Coinmach Corporation (see note
13). The accompanying consolidated financial statements reflect the
financial position, results of operations, and cash flows of the Company
immediately prior to the sale.

On December 15, 1993, CIC, on a stand alone basis, completed a "pre-
packaged" voluntary capital restructuring (the "Plan") which was approved
by 100% of the Company's shareholders and creditors. Neither Coinmach nor
Super Laundry were parties to this agreement. The Plan provided for the
Company's existing senior subordinated notes, junior subordinated
promissory notes, preferred stock and common stock to be exchanged for
87,000 shares of common stock valued at $24,163. The Plan, which was
confirmed and court approved on January 21, 1994, and became effective
February 4, 1994, was reflected in the 1994 financial statements, and was
recorded in accordance with the guidelines provided by the Statement of
Financial Accounting Standards Board (FASB 15 "Accounting for Troubled Debt
Restructuring"). Pursuant to the Plan, the Company also amended its
existing revolving and term loan agreement (see note 6(a)). As a result of
the above, the Company recognized an extraordinary gain, net of legal fees
and other direct costs, of $20,420 on the early extinguishment of the debt
in 1994. The Company also incurred $1,341 in non-cash expenses related to
the estimated fair value of the equity conversion feature of debt issued
pursuant to the Plan (see note 6). In addition, the minority partners in
Coinmach extinguished their ownership positions and the Company effectively
owned 100% of Coinmach (see note 7).

(2)SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a)PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of CIC, Coinmach
and Super Laundry. All significant intercompany balances and transactions
have been eliminated in consolidation.

(b)INVENTORIES

Inventories are stated at the lower of cost or market. Cost is principally
determined using the first-in, first-out method. Inventories include
laundry equipment, spare parts and construction costs.

(c)REVENUE RECOGNITION

F-55
<PAGE>

CIC I ACQUISITION CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

JANUARY 31, 1995
(DOLLARS IN THOUSANDS)

and all required permits. Revenue is recognized on the completed contract
method. A contract is considered complete when all costs have been incurred
and either the installation is operating according to specifications or has
been accepted by the customer. The duration of such contracts is normally
less than six months.

Sales of laundromats were $451 for the one month ended January 31, 1995.

(d)PROPERTY AND EQUIPMENT

Laundry equipment, consisting primarily of commercial washers and dryers,
and other fixed assets, are stated at cost. The cost of remanufacturing
equipment is included in the cost of laundry equipment. The cost of laundry
room improvements is included in leasehold improvements. The Company
capitalized remanufacturing and laundry room improvement costs of
approximately $273 for the month ended January 31, 1995.

Depreciation of laundry equipment and fixed assets is calculated using the
straight-line method over their estimated useful lives, generally five
years. Leasehold improvements are amortized using the straight-line method
over the shorter of the lease term or estimated useful life of the asset.
The Company's policy is to write-off fully depreciated assets and the
accumulated depreciation and amortization. Depreciation and amortization
expense was approximately $739 for the month ended January 31, 1995.

(e)PREPAID COMMISSIONS

The Company capitalizes contractually required advanced commissions and
certain incentive payments paid in connection with the acquisition of its
contractual rights to laundry room locations. Such amounts are amortized on
a straight-line basis over the life of the related lease or the related
contractual agreement. Amortization expense on prepaid commission amounted
to approximately $12 for the month ended January 31, 1995.

(f)CONTRACT RIGHTS

Contract rights represent amounts expended for location contracts arising
from the acquisition of laundry machines on location. These amounts are
amortized on a straight-line basis over the remaining life of the
corresponding contract. Such amounts were fully amortized as of January 31,
1995.

(g)INTANGIBLES

(h)GOODWILL

Goodwill is being amortized, using the straight-line method, over 40 years.
Amortization expense on goodwill amounted to $38 for the month ended
January 31, 1995.

F-56
<PAGE>

CIC I ACQUISITION CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

JANUARY 31, 1995
(DOLLARS IN THOUSANDS)

(i)INCOME TAXES

The Company accounts for income taxes in accordance with Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes".
Statement 109 requires the asset and liability method of accounting for
income taxes. Under the asset and liability method of Statement 109,
deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective
tax bases. Deferred tax assets and liabilities are measured using enacted
tax rates expected to apply to taxable income in the years in which those
temporary differences are expected to be recovered or settled. Under
Statement 109, the effect on deferred tax assets and liabilities of a
change in tax rates is recognized in income in the period that includes the
enactment date.

(3)RECEIVABLES

<TABLE>
<CAPTION>
1995
------
<S> <C>
Accounts receivable............................................... $1,033
Notes receivable.................................................. 2,153
Finance reserves.................................................. 522
------
3,708
Allowances for doubtful accounts.................................. (447)
------
$3,261
======
</TABLE>

At January 31, 1995, notes receivable bear interest at a weighted average
interest rate of approximately 10% and mature through 1998. The notes are
collateralized by the underlying equipment. The Company periodically sells
notes receivable arising from the sale of laundromats to third party
finance companies. Finance reserves arise when the Company sells notes and
a portion of the proceeds are retained by the finance company. As the notes
are collected, the finance companies remit a portion of the collections to
the Company. Many of the notes receivable are sold with recourse to the
Company (see note 8). Control of the notes sold with recourse is
surrendered by the Company on the date of transfer. The Company generally
sells its receivables with recourse at cost, recognizing no gain or loss.

(4)TRANSACTIONS WITH AFFILIATES

The Company sold certain trade notes receivable to Cointrol Credit Co.,
L.P. ("Credit"), a company created in 1991 and owned by certain officers
and directors of the Company and outside investors.

All such notes are sold to yield a fair market rate of return as determined
by rates available from unrelated finance companies for similar notes. The
aggregate outstanding balance of all notes sold to Credit as of January 31,
1995 was $590. These notes are with recourse to the Company and mature
through 1998. In April 1995, the Company entered into an agreement with
Credit to repurchase the remaining receivables outstanding.

F-57
<PAGE>

CIC I ACQUISITION CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

JANUARY 31, 1995
(DOLLARS IN THOUSANDS)

(5)INTANGIBLES

<TABLE>
<CAPTION>
ESTIMATED
1995 USEFUL LIVES
------- ------------
<S> <C> <C>
Covenants not to compete............................. $ 4,281 5 years
Computer software.................................... 4,050 5 years
Deferred financing costs............................. 1,552 Life of debt
Other................................................ 972 5 years
-------
10,855
Accumulated amortization............................. 8,802
-------
$ 2,053
=======
</TABLE>

(6)LONG-TERM DEBT

Long-term debt consists of the following:

<TABLE>
<CAPTION>
1995
-------
<S> <C>
Revolving line of credit, due February 28, 1995 interest at prime
plus 1.75%(a).................................................... $25,516
Term loan, due February 28, 1995(a)............................... 15,000
Management loans, due February, 2004, interest at prime plus
1.75%, convertible into 7,000 shares of common stock after
February, 1999(b)................................................ 350
Other(c).......................................................... 934
-------
$41,800
=======
</TABLE>

On January 31, 1995, the Company sold its partnership interests in Coinmach
and Super Laundry to a new corporation, The Coinmach Corporation.

In connection with this sale, the Company paid off all amounts owed under
its revolver and term loan debt (see note 13). The accompanying financial
statements do not reflect the sale or the related repayment of debt.

On December 15, 1993, the Company finalized negotiations with the holders
of the revolving line of credit, term loan, senior subordinated note
holders, and the junior subordinated promissory note holders. Pursuant to
the Plan, the holders of senior subordinated notes in the amount of $30,000
and junior subordinated promissory notes in the amount of $1,979 exchanged
their notes, including accrued interest of approximately $16,150 through
December 15, 1993, for 87,000 shares of the restructured company's common
stock.

(a) On March 16, 1990, the Company entered into a bank agreement that
provided for a term loan of $15,000 originally payable in eight
quarterly installments of $1,875 commencing April 1, 1994, and a
revolving line of credit of up to $35,000 for a term of five years. On
February 4, 1994, the maximum revolver facility was reduced to $29,413.
In addition, commencing March 1, 1994 and continuing on the first day
of each month thereafter, the revolving credit facility will be reduced
by $175 per month through June 1994, and then $212 per month, until the
termination of the facility, including the term loan, on February 28,
1995.

F-58
<PAGE>

CIC I ACQUISITION CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

JANUARY 31, 1995
(DOLLARS IN THOUSANDS)

The interest rate for bank borrowings is the prime rate plus 1.75%. As
of January 31, 1995, the interest rate on these loans was 10.25%. In
addition, the agreement provides for the payment of a facility fee of
.125% per annum on average daily outstanding balances and an unused
line fee of .50% per annum on the average daily balance of the
revolving loans. The agreement contains certain restrictive covenants
and requires the Company, among other things, to maintain certain
financial ratios and to restrict investments, additional indebtedness
and payment of dividends. The loan is secured by all of the assets of
the Company. See note 13 for a description of the subsequent event.

(b) Pursuant to the Plan, senior management loaned the Company $350 due
February 4, 2004. Interest is payable monthly, at the rate of 1.75%
over prime. As of January 31, 1995, the interest rate on these loans
was 10.25%. The loans are convertible, upon the earlier of five years
or upon certain circumstances, into 7% of the Company's fully diluted
common stock. These loans, which are subordinated to the revolving line
of credit and the term loan, were funded February 4, 1994 (see note 7).
The loans were repaid in connection with the subsequent event described
in note 13.

Maturities of long-term debt at January 31, 1995 are contractually
payable as follows:

<TABLE>
<CAPTION>
YEARS ENDING JANUARY 31,
------------------------
<S> <C>
1996......................................... $40,945
1997......................................... 376
1998......................................... 129
2005......................................... 350
-------
$41,800
=======
</TABLE>

(7)RESTRUCTURING

On January 31, 1995, the Company sold its partnership interests in Coinmach
and Super Laundry to a new corporation, The Coinmach Corporation (see note
13).

On December 15, 1993, CIC, on a stand alone basis, completed a "pre-
packaged" voluntary capital restructuring which was approved by 100% of the
Company's shareholders and creditors (see note 1). Neither Coinmach nor
Super Laundry were parties to this agreement. The Plan provided for the
Company's existing senior subordinated notes, junior subordinated
promissory notes, preferred stock and common stock to be exchanged for
87,000 shares of common stock valued at $24,163. The carrying value of the
senior subordinated notes, junior subordinated notes and related accrued
interest was $30,000, $1,500, and $16,149, respectively. The preferred
stock and common stock had a net carrying value of $2,609, consisting of
preferred stock of $14,364, and common stock of $1, offset by the carrying
value of the consideration to continuing predecessor interests in excess of
book value of $11,756. The Plan, which was confirmed and court approved on
January 21, 1994 and became effective February 4, 1994, was reflected in
the 1994 financial statements. In addition, pursuant to the Plan, the
Company amended its existing revolving and term loan agreement. As a result
of the above, the Company recognized an extraordinary gain of $20,420, net
of legal fees and other direct costs of $3,067, on the early extinguishment
of the debt. In addition, $14,364, representing the carrying value of the
preferred stock, is included in common stockholders' deficiency. Pursuant
to the Plan, the equity position of the shareholder to which the continuing
predecessor

F-59
<PAGE>

CIC I ACQUISITION CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

JANUARY 31, 1995
(DOLLARS IN THOUSANDS)

interests was attributed surrendered such position. Consequently, the
carrying value of the continuing predecessor interests was charged to the
accumulated deficit account. The restructuring has been treated as a tax
free exchange of debt for equity in accordance with the provisions of the
Internal Revenue Service Code.

Also pursuant to the Plan the Company entered into non-compete agreements
with two former shareholders totaling approximately $954.

(8)COMMITMENTS AND CONTINGENCIES

Coinmach is obligated under long-term leases relating to revenue equipment
locations. The terms of these leases principally range from three to six
years, most of which provide for fixed monthly commission payments and
contain renewal options. The majority of these leases contain provisions
permitting the cancellation and/or adjustment of the commission by Coinmach
if minimum revenue levels are not achieved. In addition, Coinmach rents
office and warehouse space from SSB Corporation ("SSB"). SSB is owned by
certain individuals who were also owners of the Company, prior to the Plan.
The lease, expiring on May 1, 1995, provides for annual rentals of $368 and
for the payment by Coinmach of all operating expenses.

Super Laundry leases its facilities from a related party under an operating
lease that expires on December 31, 1996 and provides for a minimum annual
rental of $60 in 1995 increasing to $63 in 1996. Under the terms of the
lease, Super Laundry is required to pay operating costs. Rental expense for
this lease amounted to $5 for the month ended January 31, 1995. In
addition, Super Laundry also leases a warehouse from a related party on a
month-to-month basis. Rental expense for this lease amounted to $3 for the
month ended January 31, 1995. Effective January 1, 1993, Super Laundry
entered into a five year lease for a sales office. This lease expires
December 31, 1997 and provides for a minimum annual rental of $23 in 1993,
increasing by 4% each successive year through 1997. The lease also calls
for Super Laundry to pay operating costs. Rental expense including
operating costs for this lease amounted to $9 for the month ended January
31, 1995.

Future minimum lease payments under noncancellable operating leases
(excluding commissions for laundry equipment locations) as of January 31,
1995 are as follows:

<TABLE>
<CAPTION>
YEARS ENDING JANUARY 31,
------------------------
<S> <C>
1996........................................... $314
1997........................................... 108
1998........................................... 27
----
Total future minimum lease payments............... $449
====
</TABLE>

Rent expense, excluding commission payments for laundry equipment
locations, amounted to approximately $54 for the month ended January 31,
1995.

F-60
<PAGE>

CIC I ACQUISITION CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

JANUARY 31, 1995
(DOLLARS IN THOUSANDS)

Super Laundry is contingently liable on receivables sold, with recourse, to
finance companies. The total amount outstanding is approximately $7,822 as
of January 31, 1995.

Under agreements between Super Laundry and certain finance companies, a
portion of the notes receivable sales price is retained by the finance
company until the receivable is collected. Amounts retained under the
agreements amounted to $522 as of January 31, 1995, and are shown in the
accompanying consolidated balance sheets as receivables.

Coinmach has entered into leasing arrangements for automobiles and trucks
and office equipment which are accounted for as capital leases. At January
31, 1995, the gross amounts of such assets amounted to $1,646 and
accumulated amortization amounted to $901. Future minimum lease payments as
of January 31, 1995 are as follows:

<TABLE>
<CAPTION>
YEARS ENDING JANUARY 31,
------------------------
<S> <C>
1996........................................... $356
1997........................................... 144
1998........................................... 49
----
Minimum lease payments............................ 549
Less amount representing interest................. 88
----
Present value of net minimum lease payments....... $461
====
</TABLE>

(9)INCOME TAXES

The tax effects of temporary differences that give rise to significant
portions of the deferred tax assets at January 31, 1995 are presented
below:

<TABLE>
<S> <C>
Deferred tax assets:
Net operating loss carryforwards............................. $ 21,278
Fixed and intangible assets, principally due to differences
between tax and financial reporting bases................... 3,117
Allowance for doubtful accounts.............................. 178
--------
Gross deferred tax assets.................................. 24,573
Less valuation allowance..................................... (24,573)
--------
Net deferred tax asset..................................... $ -0-
========
</TABLE>

CIC files a consolidated Federal income tax return with Super Laundry and
includes its equity in the earnings or loss of Coinmach. At January 31,
1995, net operating loss carryforwards of approximately $53,200 are
available to offset future taxable income and expire commencing 2004
through 2009.

F-61
<PAGE>

CIC I ACQUISITION CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONCLUDED)

JANUARY 31, 1995
(DOLLARS IN THOUSANDS)

(10)STOCK OPTION PLAN

Pursuant to the Plan, the Company adopted two stock option plans, which
provided for the grant and exercise of options to purchase up to 6,000
shares of the Company's common stock upon attainment of certain annual
earnings performance goals through 1997. One of the plans was for the
employees of the Company, and provided for the grant and exercise of 5,000
shares. On February 4, 1994, options representing 1,000 of the shares under
this plan were granted to certain employees and were immediately vested but
were not to be exercisable unless 1994 earnings performance goals were
attained. The employee plan also provided for the grant of options to
purchase an additional 1,000 shares in 1994 and each year through December
31, 1997. The second stock option plan provided for the grant of options to
purchase 1,000 shares to a financial advisor upon attainment of annual
earnings performance goals through 1995. Under both plans, the options were
to expire ten years from the dates of grant and were exercisable at $50 per
share. No options have been exercised and in connection with the subsequent
event described in note 13, the stock option plans were terminated and all
outstanding options were cancelled.

(11)PROFIT SHARING PLAN

Effective April 1, 1994, The Company established a profit sharing and
retirement plan (the "Coinmach Profit Sharing Plan") for substantially all
of its employees. Pursuant to the Coinmach Profit Sharing Plan, eligible
employees may defer up to 15% of their salaries up to a maximum level
imposed by applicable federal law. Coinmach makes matching contributions in
increasing amounts, based upon the number or years of service performed by
eligible participants, up to a maximum of 6% of an eligible employee's
salary. Matching contribution percentages range from 5% for one to two
years of service up to 25% for five or more years of service and vest over
a six year period. Company contributions to the plan for the month ended
January 31, 1995 amounted to $6.

(12)SUPPLEMENTAL CASH FLOW INFORMATION

The Company paid approximately $395 for interest for the month ended
January 31, 1995.

(13)SUBSEQUENT EVENT

F-62
<PAGE>

LETTERHEAD OF KPMG PEAT MARWICK

INDEPENDENT AUDITORS' REPORT

The Board of Directors
The Coinmach Corporation:

We have audited the accompanying consolidated balance sheet of The Coinmach
Corporation and subsidiaries (the Company) as of March 31, 1995, and the
related consolidated statements of operations and accumulated deficit and cash
flows for the two-month period then ended. 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 audit.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of The
Coinmach Corporation and subsidiaries as of March 31, 1995, and the results of
their operations and their cash flows for the two-month period then ended, in
conformity with generally accepted accounting principles.

/s/ KPMG Peat Marwick LLP

New York, New York
July 7, 1995

F-63
<PAGE>

THE COINMACH CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET

MARCH 31, 1995
(DOLLARS IN THOUSANDS)

ASSETS
<TABLE>
<S> <C>
Cash.................................................................. $ 922
Receivables........................................................... 3,163
Inventories........................................................... 2,584
Prepaid commissions................................................... 3,222
Property and equipment:
Laundry equipment................................................... 20,039
Leasehold improvements.............................................. 3,418
Office equipment.................................................... 578
Automobiles and trucks.............................................. 1,154
-------
25,189
Less accumulated depreciation....................................... 859
-------
Net property and equipment........................................ 24,330
Contract rights, net of accumulated amortization of $813.............. 19,327
Other intangibles, net of accumulated amortization of $364............ 6,692
Other assets.......................................................... 795
-------
$61,035
=======
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable...................................................... $ 2,198
Accrued expenses...................................................... 3,230
Commissions payable................................................... 2,994
Long-term debt........................................................ 42,351
Other long-term liabilities........................................... 407
Minority interest..................................................... 126
Stockholders' equity:
Class A Common, par value $.01; 77,350 shares authorized, issued and
outstanding........................................................ 1
Class B Common, par value $.01; 15,500 shares authorized; 14,500
shares issued and outstanding...................................... --
Class C Common, par value $.01; 7,650 shares authorized, issued and
outstanding........................................................ --
Class D Common, par value $.01; 7,650 shares authorized; no shares
issued or outstanding.............................................. --
Preferred stock, par value $.01; 10,000 shares authorized; no shares
issued or outstanding.............................................. --
Additional paid-in capital.......................................... 11,221
Accumulated deficit................................................. (1,155)
-------
10,067
Notes receivable from management.................................... (338)
-------
Total stockholders' equity........................................ 9,729
-------
$61,035
=======
</TABLE>

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

F-64
<PAGE>

THE COINMACH CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF OPERATIONS AND ACCUMULATED DEFICIT

FOR THE TWO MONTHS ENDED MARCH 31, 1995
(DOLLARS IN THOUSANDS)

<TABLE>
<S> <C>
Revenues.............................................................. $11,515
Laundry operating expenses............................................ 8,951
General and administrative expenses................................... 799
Depreciation and amortization of property and equipment............... 859
Amortization of intangibles and prepaid commissions................... 1,285
-------
Operating loss........................................................ (379)
Interest expense...................................................... 774
-------
Loss before income taxes.............................................. (1,153)
Income taxes.......................................................... 2
-------
Net loss.............................................................. (1,155)
Accumulated deficit, beginning of period.............................. --
-------
Accumulated deficit, end of period.................................... $(1,555)
=======
</TABLE>

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

F-65
<PAGE>

THE COINMACH CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE TWO MONTHS ENDED MARCH 31, 1995
(DOLLARS IN THOUSANDS)

<TABLE>
<S> <C>
Cash flows from operating activities:
Net loss............................................................ $(1,155)
Adjustments to reconcile net loss to net cash provided by operating
activities:
Depreciation and amortization..................................... 2,144
Minority interest in loss of consolidated subsidiary.............. (7)
Provision for bad debts........................................... 3
Changes in assets and liabilities:
Decrease in receivables......................................... 94
Decrease in prepaid commissions net of decrease in commissions
payable........................................................ (438)
(Increase) in inventories....................................... (231)
Decrease in other assets........................................ 209
(Decrease) in accounts payable and accrued liabilities.......... (546)
-------
Net cash provided by operating activities..................... 73
-------
Cash flows from investing activities:
Purchase of laundry equipment....................................... (918)
Purchase of fixed assets............................................ (72)
-------
Net cash used in investing activities......................... (990)
-------
Cash flows from financing activities:
Repayments under revolving credit facility.......................... (191)
Payment of other debt............................................... (82)
Principal payments of capital lease obligations..................... (54)
-------
Net cash used in financing activities......................... (327)
-------
Net decrease in cash.......................................... (1,244)
Cash at beginning of period........................................... 2,166
-------
Cash at end of period................................................. $ 922
=======
</TABLE>

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

F-66
<PAGE>

THE COINMACH CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 1995
(DOLLARS IN THOUSANDS)

(1)ORGANIZATION AND ACQUISITION

The Coinmach Corporation ("Corp."; together with its subsidiaries, the
"Company") was incorporated in January 1995. The Company was capitalized
primarily through an equity investment by an investor group led by the
majority shareholder (the "Majority Shareholder") and senior management and
bank financing (see note 3 and note 6).

Corp. is a holding company which was formed to acquire partnership
interests in Coinmach Industries Co. ("Coinmach") and Super Laundry
Equipment Co. L.P. ("Super Laundry"). Coinmach is principally engaged in
providing laundry equipment and related services to multi-family housing
complexes in the New York metropolitan area. Super Laundry is principally a
supplier of coin-operated laundromat equipment and turnkey laundromat
retail stores in the New York metropolitan area.

On January 31, 1995, the Company acquired its partnership interests in
Coinmach and Super Laundry from CIC I Acquisition Corp. ("CIC I"). The
transaction resulted in the Company owning 100% interests in both Coinmach
and Super Laundry. The aggregate purchase price for these interests was
$8,570, paid in cash.

The acquisition was accounted for using the purchase method of accounting.
The fair value of assets acquired (based on an independent appraisal for
certain assets) less liabilities assumed exceeded the purchase price by
approximately $7,700. The excess was allocated to property, equipment and
intangible assets ratably based on their respective fair values as
prescribed by Accounting Principles Board Opinion No. 16, "Business
Combinations." The acquisition was funded by a net equity investment (see
Note 3) of approximately $10,884 and the assumption of liabilities
aggregating approximately $52,627. The total purchase price of $63,511 was
allocated to assets acquired, based on fair market value, as follows:

<TABLE>
<S> <C>
Cash............................................................. $ 2,166
Receivables...................................................... 3,260
Inventories...................................................... 2,353
Prepaids and other assets........................................ 4,337
Property and equipment........................................... 24,199
Contract rights.................................................. 20,140
Covenants not to compete......................................... 915
Computer software................................................ 3,271
Deferred financing costs......................................... 2,870
-------
$63,511
=======
</TABLE>

The Company was capitalized, acquired its interests in Coinmach and Super
Laundry, and entered into the financing agreement described in note 6 on
January 31, 1995. The Company's fiscal year-end is March 31.

(2)SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a)PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of the Company
and its subsidiaries. All significant intercompany balances and
transactions have been eliminated in consolidation.

F-67
<PAGE>

THE COINMACH CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

MARCH 31, 1995
(DOLLARS IN THOUSANDS)

(b)INVENTORIES

Inventories are stated at the lower of cost or market. Cost is principally
determined using the first-in, first-out method. Inventories include
laundry equipment, spare parts and construction costs.

(c)REVENUE RECOGNITION

Super Laundry's customers generally sign sales contracts whereby Super
Laundry will construct and equip a complete laundromat operation, including
location identification, construction, plumbing, electrical wiring and all
required permits. Revenue is recognized on the completed contract method. A
contract is considered complete when all costs have been incurred and
either the installation is operating according to specifications or has
been accepted by the customer. The duration of such contracts is normally
less than six months.

Sales of laundromats were $1,574 for the two months ended March 31, 1995.

(d)PROPERTY AND EQUIPMENT

Laundry equipment, consisting primarily of commercial washers and dryers,
and fixed assets acquired in the purchase, are stated as described in Note
1, with subsequent additions recorded at cost. The cost of remanufacturing
equipment is included in the costs of laundry equipment. The cost of
laundry room improvements relating to new locations is included in
leasehold improvements. The Company capitalized remanufacturing and laundry
room improvement costs of approximately $259 for the two months ended March
31, 1995.

Depreciation of laundry equipment and fixed assets is calculated using the
straight-line method over their estimated useful lives, generally five
years. Leasehold improvements are amortized using the straight-line method
over the shorter of the lease term or estimated useful life of the asset.
The Company's policy is to write-off fully depreciated assets and the
related accumulated depreciation and amortization. Depreciation and
amortization expense was approximately $859 for the two months ended March
31, 1995.

(e)PREPAID COMMISSIONS

(f)CONTRACT RIGHTS

Contract rights represent amounts expended for location contracts arising
from the acquisition of laundry machines on location. The carrying amount
of contract rights acquired in connection with the purchase transaction is
based on the accounting described in note 1, and are amortized over periods
ranging from 3

F-68
<PAGE>

THE COINMACH CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

MARCH 31, 1995
(DOLLARS IN THOUSANDS)

to 15 years. Contract rights relating to written contracts are amortized on
a straight-line basis over the remaining life of the corresponding
contract, and verbal contracts are amortized over an estimated useful life
based on a turnover analysis performed by an independent appraisal company.
Amortization expense on contract rights was $813 for the two months ended
March 31, 1995.

(g)INTANGIBLES

(h)INCOME TAXES

(3)CAPITAL STOCK

In connection with the initial capitalization of the Company, 77,350 shares
of Class A, 14,500 shares of Class B and 7,650 shares of Class C Common
Stock were issued in exchange for gross proceeds of approximately $11,200,
$422 and $0, respectively. Such amounts aggregated approximately $11,222,
net of a transaction fee of $400 paid to the Majority Shareholder.

The Class A Common Stock is guaranteed a yield before any other class of
common stock receives dividends. In addition, the Class A Common Stock has
full liquidation preference, including its guaranteed yield, over all other
classes of common stock. The liquidation preference for Class A Common
Stock as of March 31, 1995, including the guaranteed yield, was
approximately $11,350. Class A and Class B Common Stock have equal voting
rights.

The Class B Common Stock was purchased by certain members of management of
the Company. Certain members of management also purchased Class A shares. A
portion of the purchase price of Class B Common Stock was financed through
the Company in the form of promissory notes. The notes, which bear interest
at 8% and are payable in four equal annual installments commencing January
31, 1996, are presented as a reduction of stockholders' equity in the
accompanying consolidated balance sheet. The underlying stock purchased was
pledged as collateral against these notes. The liquidation preference for
Class B Common Stock, which is subordinated to Class A Common Stock, as of
March 31, 1995 was approximately $422.

The Class C Common Stock, which was purchased by the lenders described in
note 6 for a nominal amount and whose value was deemed to not be material
at the date of purchase, is subordinated in liquidation to both Class A and
Class B Common Stock. Class C Common Stock has no voting rights and is
convertible

F-69
<PAGE>

THE COINMACH CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

MARCH 31, 1995
(DOLLARS IN THOUSANDS)

into Class D Common Stock (which has voting rights) upon the occurrence of
certain conversion events including public offerings of the Company's stock
or changes in control. No such events have occurred.

All of the agreements pursuant to which common stock was purchased contain
restrictions on the transfer of Company stock. In addition, pursuant to
management agreements with the purchasers of the Class B Common stock, the
Company may exercise certain call provisions based on agreed upon formulae.

Pursuant to a stockholders agreement with the Company, certain stockholders
are granted co-sale rights, whereby, if the Majority Shareholder proposes
to transfer (other than pursuant to a public offering or sale of the
Company), any shares of common stock that results in the Majority
Shareholder owning directly or indirectly less than 60% of the then
outstanding common stock of the Company, any stockholder of the Company is
given the opportunity to sell a ratable portion of his or her shares of
common stock contemporaneously with such sale by the Majority Shareholder.

The Majority Shareholder and other stockholders of the Company are also
entitled to certain registration rights pursuant to the terms of a
registration rights agreement entered into between such stockholders and
the Company.

The Company incurred fees and expenses in connection with the purchase
transaction and the related financing agreement aggregating $2,870. Such
fees are being amortized over the five year term of the revolving line of
credit agreement and are included in other intangibles in the accompanying
consolidated balance sheets.

The Company has entered into a management agreement with the Majority
Shareholder which provides for a fee of $100 per year.

(4)RECEIVABLES

Receivables consist of the following:

<TABLE>
<S> <C>
Accounts receivable............................. $1,045
Notes receivable................................ 1,705
Finance reserves................................ 413
------
$3,163
======
</TABLE>

At March 31, 1995, notes receivable bear interest at a weighted average
interest rate of approximately 10% and mature through 1998. The notes are
collateralized by the underlying laundry equipment. The Company
periodically sells notes receivable arising from the sale of laundromats to
third party finance companies. Finance reserves arise when the Company
sells notes and a portion of the proceeds are retained by the finance
company. As the notes are collected, the finance companies remit a portion
of the collections to the Company. Many of the notes receivable are sold
with recourse to the Company (see note 7). Control of the notes sold with
recourse is surrendered by the Company on the date of transfer. The Company
generally sells its receivables with recourse at cost, recognizing no gain
or loss.

F-70
<PAGE>

THE COINMACH CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

MARCH 31, 1995
(DOLLARS IN THOUSANDS)

(5)INTANGIBLES

Intangibles consist of the following:

<TABLE>
<CAPTION>
ESTIMATED
USEFUL
LIVES
---------
<S> <C> <C>
Covenants not compete.............................. $ 915 Lives of Contract
Computer software.................................. 3,271 3 years
Deferred financing costs........................... 2,870 5 years
------
7,056
Accumulated Amortization........................... (364)
------
$6,692
======
</TABLE>

(6)LONG-TERM DEBT

Long-term debt consists of the following:

<TABLE>
<S> <C>
Revolving line of credit, due January 31, 2000 interest at prime
plus 1.25% (10.25% at
March 31, 1995)(a)................................................ $ 1,499
Term loan A, quarterly payments of $250 commencing April 1, 1996,
and increasing to $500 April 1, 1997, $1,250 April 1, 1998 and
$1,500 April 1, 1999. Interest at prime plus 1.25% (10.25% at
March 31, 1995)(a)................................................ 14,000
Term loan B, quarterly payments of $1,750 commencing April 1, 2000
and increasing to $2,000 April 1, 2001 with the final two payments
of $1,750 on April 1, 2002 and
July 1, 2002. Interest at prime plus 1.75% (10.75% at March 31,
1995)(a).......................................................... 18,500
Term loan C, due July 1, 2002. Interest at 12.5%(a)................ 7,500
Other(b)........................................................... 852
-------
$42,351
=======
</TABLE>
(a) In connection with the purchase transaction described in note 1, the
Company entered into a financing agreement (the "Financing Agreement")
with a group of lenders (the "Lenders"). The Financing Agreement
provides for $40,000 in term loans and $10,000 in aggregate for
revolving credit and acquisition loan facilities.

The revolving line of credit agreement provides for up to $5,000 in
borrowings, including letters of credit up to a maximum of $1,000.
There is a one-half of one percent fee per annum on the unused portion
of this facility and a two percent letter of credit fee.

The Financing Agreement also provides for acquisition loans of up to
$5,000. The acquisition loans must be used to finance acquisitions or
capital expenditures attributed to growth. Any amounts outstanding
under the acquisition line as of January 31, 2000 will be repaid in
equal quarterly installments through July 1, 2002. Borrowings under the
acquisition line bear interest at prime plus 1.75%. The Company has no
acquisition loans outstanding as of March 31, 1995.

The Financing Agreement requires the Company, among other things, to
maintain certain financial ratios and restricts additional investments,
indebtedness and the payment of dividends. The Company is in compliance
with all covenants contained in the Financing Agreement. Loans
outstanding under

F-71
<PAGE>

THE COINMACH CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

MARCH 31, 1995
(DOLLARS IN THOUSANDS)

this agreement are subject to prepayment upon the occurrence of certain
events such as asset dispositions, public offerings and the generation
of excess cash flow, as defined. The Company may be subject to
prepayment penalty on any fixed rate borrowings.

Coinmach and Super Laundry are the borrowers under the Financing
Agreement. The facility is guaranteed by Corp. Borrowing under the
Financing Agreement are secured by all of the assets of the Company.

(b) Other debt includes payments due under noncompete agreements.

Maturities of long-term debt at March 31, 1995 are contractually
payable as follows:

<TABLE>
<CAPTION>
YEARS ENDING MARCH 31,
----------------------
<S> <C>
1996........................................... $ 417
1997........................................... 1,380
1998........................................... 2,055
1999........................................... 5,000
2000........................................... 7,499
Thereafter..................................... 26,000
-------
$42,351
=======
</TABLE>

(7)COMMITMENTS AND CONTINGENCIES

Coinmach is obligated under long-term leases relating to revenue equipment
locations. The terms of these leases principally range from three to six
years, most of which provide for fixed monthly commission payments and
contain renewal options. The majority of these leases contain provisions
permitting cancellation of the lease and/or adjustment of the commission by
Coinmach if minimum revenue levels are not achieved. In addition, Coinmach
rents office and warehouse space. The lease, which expired on May 1, 1995,
provided for annual rentals of $368 and for the payment by Coinmach of all
operating expenses. The lease is currently on a month-to-month basis under
the same terms.

Super Laundry leases its facilities from a related party under an operating
lease that expires on December 31, 1996 and provides for a minimum annual
rental of $60 in 1995 increasing to $63 in 1996. Under the terms of the
lease, Super Laundry is required to pay operating costs. Rental expense for
this lease amounted to $17 for the two months ended March 31, 1995. In
addition, Super Laundry also leases a warehouse from a related party on a
month-to-month basis. Rental expense for this lease amounted to $6 for the
two months ended March 31, 1995. Effective January 1, 1993, Super Laundry
entered into a five year lease for a sales office. This lease expires
December 31, 1997 and provides for a minimum annual rental of $23 in 1993,
increasing by 4% each successive year through 1997. The lease also calls
for Super Laundry to pay operating costs. Rental expense including
operating costs for this lease amounted to $5 for the two months ended
March 31, 1995.

Future minimum lease payments under noncancellable operating leases
(excluding commissions for laundry equipment locations) as of March 31,
1995 are as follows:

<TABLE>
<CAPTION>
YEARS ENDING MARCH 31,
----------------------
<S> <C>
1996.............................................. $558
1997.............................................. 167
1998.............................................. 37
----
Total future minimum lease payments............... $762
====
</TABLE>

F-72
<PAGE>

THE COINMACH CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

MARCH 31, 1995
(DOLLARS IN THOUSANDS)

Rent expense, excluding commission payments for laundry equipment
locations, amounted to approximately $90 for the two months ended March 31,
1995.

Super Laundry is contingently liable on receivables sold, with recourse, to
finance companies. The total amount outstanding is approximately $7,442 as
of March 31, 1995.

Coinmach has entered into leasing arrangements for automobiles and trucks
and office equipment which are accounted for as capital leases. Future
minimum lease payments as of March 31, 1995 are as follows:

<TABLE>
<CAPTION>
YEARS ENDING MARCH 31,
----------------------
<S> <C>
1996.............................................. $307
1997.............................................. 123
1998.............................................. 32
----
Minimum lease payments............................ 462
Less amount representing interest................. 55
----
Present value of net minimum lease payments....... $407
====
</TABLE>

(8)INCOME TAXES

Income tax expense of $2 for the two months ended March 31, 1995 primarily
represents state and local taxes.

Corp. will file a consolidated Federal Income tax return with Super Laundry
and include its equity in the earnings or loss of Coinmach. It is
anticipated that no Federal taxes will be due for the period ended March
31, 1995.

The tax effects of temporary differences that give rise to significant
portions of the deferred tax assets are presented below:

<TABLE>
<CAPTION>
MARCH 31,
1995
---------
<S> <C>
Deferred tax assets:
Difference between book and tax basis of
long-lived assets.......................... $ 460
Less valuation allowance.................... (460)
-----
Net deferred tax assets.................. $ -0-
=====
</TABLE>

(9)PROFIT SHARING PLAN

F-73
<PAGE>

THE COINMACH CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONCLUDED)

MARCH 31, 1995
(DOLLARS IN THOUSANDS)

federal law. Coinmach makes matching contributions in increasing amounts,
based upon the number of years of service performed by eligible
participants, up to a maximum of 6% of an eligible employee's salary.
Matching contribution percentages range from 5% for one to two years of
service up to 25% for five or more years of service and vest over a six
year period. Company contributions to the plan for the two months ended
March 31, 1995 amounted to $16.

(10)SUPPLEMENTAL CASH FLOW INFORMATION

The Company paid approximately $774 for interest for the two months ended
March 31, 1995.

F-74
<PAGE>

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

NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFOR-
MATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE IN THIS PROSPECTUS AND,
IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER OR SOLICITATION BY ANYONE IN ANY
JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED, OR IN
WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO,
OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE HEREUNDER SHALL UNDER ANY
CIRCUMSTANCES CREATE ANY IMPLICATION THAT THE INFORMATION CONTAINED OR INCOR-
PORATED BY REFERENCE HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE
HEREOF OR THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE
THE DATE HEREOF OR THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY
TIME SUBSEQUENT TO THE DATE HEREOF.

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

TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
----
<S> <C>
Prospectus Summary....................................................... 1
Risk Factors............................................................. 6
The Company.............................................................. 10
Use of Proceeds.......................................................... 12
Dividend Policy.......................................................... 13
Dilution................................................................. 14
Capitalization........................................................... 15
Unaudited Pro Forma Financial Data....................................... 16
Selected Historical Consolidated Financial Data.......................... 21
Management's Discussion and Analysis of Financial Condition and Results
of Operations........................................................... 24
Business................................................................. 34
Management............................................................... 42
Principal Stockholders................................................... 49
Certain Relationships and Related Transactions........................... 51
Description of Capital Stock............................................. 55
Shares Eligible for Future Sale.......................................... 59
Underwriting............................................................. 61
Legal Matters............................................................ 62
Experts.................................................................. 63
Available Information.................................................... 63
Index to Financial Statements............................................ F-1
</TABLE>

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

UNTIL AUGUST 11, 1996 (25 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL DEAL-
ERS EFFECTING TRANSACTIONS IN THE COMMON STOCK, WHETHER OR NOT PARTICIPATING
IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS DELIVERY
REQUIREMENT IS IN ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER A PROSPEC-
TUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR
SUBSCRIPTIONS.

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

4,120,000 SHARES

[LOGO]
-------------------------
Coinmach
-------------------------
Superior Laundry Services

COINMACH LAUNDRY

CORPORATION

COMMON STOCK

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

PROSPECTUS
July 17, 1996

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

LEHMAN BROTHERS

DILLON, READ & CO. INC.

LAZARD FRERES & CO. LLC

FIELDSTONE
FPCG SERVICES, L.P.

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