COINMACH LAUNDRY CORP, S-3, 1997-10-14

COINMACH LAUNDRY CORP
S-3, 1997-10-14
MISC INDUSTRIAL & COMMERCIAL MACHINERY & EQUIPMENT

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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 14, 1997

REGISTRATION NO. 333-

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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COINMACH LAUNDRY CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
11-3258015
DELAWARE (I.R.S. EMPLOYER IDENTIFICATION NO.)
(STATE OR OTHER JURISDICTION OF
INCORPORATION OR ORGANIZATION)
55 LUMBER ROAD
ROSLYN, NEW YORK 11576
(516) 484-2300
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
ROBERT M. DOYLE
CHIEF FINANCIAL OFFICER
COINMACH CORPORATION
55 LUMBER ROAD
ROSLYN, NEW YORK 11576
(516) 484-2300
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)

COPIES TO:
RONALD S. BRODY WILLIAM M. HARTNETT
ANDERSON KILL & OLICK, P.C. CAHILL GORDON & REINDEL
1251 AVENUE OF THE AMERICAS 80 PINE STREET
NEW YORK, NEW YORK 10020 NEW YORK, NEW YORK 10005
(212) 278-1000 (212) 701-3000
APPROXIMATE DATE OF COMMENCEMENT OF THE PROPOSED SALE OF THE SECURITIES TO THE
PUBLIC:
As soon as practicable after the Registration Statement becomes effective.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [_]

If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [_]

If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]

If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
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CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
PROPOSED PROPOSED
AMOUNT MAXIMUM MAXIMUM
TITLE OF EACH CLASS OF TO BE OFFERING PRICE AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED(1) PER SHARE(1) OFFERING PRICE(1) REGISTRATION FEE
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<S> <C> <C> <C> <C>
Class A Common Stock... 4,312,500 shares $23.875 $102,960,937 $31,200.29
</TABLE>
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(1) Calculated pursuant to Rule 457(c) based on the average of the bid and ask
prices of the Class A Common Stock on the Nasdaq National Market on
October 8, 1997.
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933, OR UNTIL THE REGISTRATION
STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.

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<PAGE>

++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++

SUBJECT TO COMPLETION
OCTOBER 14, 1997

3,750,000 Shares

[LOGO] COINMACH LAUNDRY CORPORATION

Common Stock

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Of the 3,750,000 shares of common stock, par value $.01 per share (the
"Common Stock"), of Coinmach Laundry Corporation ("Coinmach Laundry") offered
hereby (the "Offering"), 2,500,000 shares are being sold by Coinmach Laundry
and 1,250,000 shares are being sold by certain stockholders of Coinmach Laundry
(the "Selling Stockholders"). Coinmach Laundry will not receive any proceeds
from the sale of shares by the Selling Stockholders. Coinmach Laundry's Common
Stock is traded on the Nasdaq National Market under the trading symbol "WDRY."
On October 13, 1997, the last reported sale price of the Common Stock was
$24.50 per share. See "Price Range of Common Stock."

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THE COMMON STOCK OFFERED HEREBY INVOLVES A HIGH DEGREE OF RISK. SEE "RISK
FACTORS" COMMENCING ON PAGE 9.

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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.

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<TABLE>
<CAPTION>
PRICE UNDERWRITING PROCEEDS PROCEEDS TO
TO DISCOUNTS AND TO SELLING
PUBLIC COMMISSIONS(1) COMPANY(2) STOCKHOLDERS(3)
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<S> <C> <C> <C> <C>
Per Share..................... $ $ $ $
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Total(3)...................... $ $ $ $
</TABLE>
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(1) Coinmach Laundry and the Selling Stockholders have agreed to indemnify the
Underwriters against certain liabilities, including liabilities under the
Securities Act of 1933, as amended. See "Underwriting."

(2) Before deducting expenses of the Offering payable by Coinmach Laundry.

(3) Certain of the Selling Stockholders and certain other stockholders have
granted the Underwriters a 30-day option to purchase up to 562,500
additional shares of Common Stock solely to cover over-allotments, if any.
To the extent that the option is exercised, the Underwriters will offer the
additional shares at the Price to Public shown above. If the option is
exercised in full, the total Price to Public, Underwriting Discounts and
Commissions, Proceeds to Company, and Proceeds to Selling Stockholders will
be $ , $ , $ , and $ , respectively. See "Underwriting."
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The shares of Common Stock are offered by the several Underwriters, subject
to prior sale, when, as and if delivered to and accepted by them, and subject
to the right of the Underwriters to reject any order in whole or in part. It is
expected that the delivery of the shares of Common Stock will be made at the
offices of BT Alex. Brown Incorporated, Baltimore, Maryland on or about
, 1997.

BT Alexc Brown
Lehman Brothers
Raymond James & Associates, Inc.
Wheat First Butcher Singer
Jefferies & Company, Inc.

THE DATE OF THIS PROSPECTUS IS , 1997
<PAGE>

{ART}

CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN, OR OTHERWISE AFFECT THE PRICE OF THE COMMON STOCK.
SUCH TRANSACTIONS MAY INCLUDE THE PURCHASE OF SHARES OF COMMON STOCK FOLLOWING
THE OFFERING TO COVER A SYNDICATE SHORT POSITION IN THE COMMON STOCK OR
MAINTAIN THE PRICE OF THE COMMON STOCK, AND THE IMPOSITION OF PENALTY BIDS. FOR
A DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING."

IN CONNECTION WITH THIS OFFERING, CERTAIN UNDERWRITERS AND SELLING GROUP
MEMBERS MAY ALSO ENGAGE IN PASSIVE MARKET MAKING TRANSACTIONS IN THE COMMON
STOCK ON THE NASDAQ NATIONAL MARKET IN ACCORDANCE WITH RULE 103 OF REGULATION M
UNDER THE SECURITIES EXCHANGE ACT OF 1934. SEE "UNDERWRITING."
<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 or incorporated by reference herein. As used in
this Prospectus, unless the context otherwise requires, all references to
"Coinmach Laundry" herein refer to Coinmach Laundry Corporation and all
references to the "Company" herein refer to Coinmach Laundry 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 by the underwriters of the
Offering (the "Underwriters"). "EBITDA" has the meaning set forth in footnote
(3) on page 8 hereof and "EBITDA margin" has the meaning set forth in footnote
(4) on page 8 hereof. Except as otherwise specified, all information in this
Prospectus assumes no exercise of the Underwriters' over-allotment option.

THE COMPANY

GENERAL

The Company, established in 1947, is the leading supplier of outsourced coin-
operated laundry equipment services for multi-family housing properties in the
United States. The Company's business involves leasing laundry rooms from
building owners and property management companies, installing and servicing the
laundry equipment and collecting revenues generated from laundry machines. The
Company owns and operates approximately 415,000 coin-operated washers and
dryers in approximately 42,000 locations on routes throughout the United States
and in 151 retail laundromats located throughout Texas.

In January 1995, the Company initiated a strategy of controlled growth
through acquisitions. This strategy was designed to increase the installed
machine base in its then existing operating region as well as to provide the
Company with a strong market presence in new regions. Since January 1995, the
Company has completed six significant acquisitions adding revenues of
approximately $221 million and expanding its national presence from the
Northeast into the Mid-Atlantic, Southeast, South-Central, Midwest and Western
regions of the United States. Accordingly, the Company has grown its installed
base from approximately 54,000 machines to approximately 415,000 machines.

As a result of this strategy of growth, the Company's revenues and EBITDA
have grown from $72.9 million and $13.6 million, respectively, on a historical
basis for the twelve months ended March 31, 1995, to $306.9 million and $97.8
million (before deducting non-cash stock based compensation charges),
respectively, for the twelve months ended March 28, 1997 (the "1997 fiscal
year"), on a pro forma basis, giving effect to the acquisitions consummated by
the Company since March 30, 1996.

INDUSTRY

The coin-operated laundry equipment services industry is characterized by
stable cash flows generated by long-term, renewable lease contracts with multi-
family property owners and management companies. The industry is highly
fragmented, 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
consists of over 280 independent operators. Based upon industry estimates,
management believes there are approximately 3.5 million installed machines in
multi-family properties throughout the United States, approximately 2.5 million
of which have been outsourced to independent operators such as the Company and
approximately 1.0 million of which continue to be operated by the owners of
such locations.

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BUSINESS STRATEGY

The Company's business strategy is to enhance its position as the largest
provider of outsourced coin-operated laundry equipment services in the United
States. Management intends to continue to grow the Company's installed machine
base both internally and through selective acquisitions to achieve benefits of
scale, increase its operating efficiencies and improve its financial
performance. Internal growth is comprised of: (i) adding new customers in
existing regions and securing contracts for additional locations from current
customers, (ii) converting owner-operated facilities to Company managed
facilities, (iii) improving the net contribution per machine through operating
efficiencies and selective price increases, and (iv) pursuing additional growth
opportunities presented by the Company's leading market position and access to
approximately four million individual housing units. The Company's acquisition
strategy is to continue to selectively acquire local, regional and multi-
regional route businesses from independent operators at attractive prices. The
Company is currently evaluating several acquisition opportunities, however,
there can be no assurance that, subsequent to ongoing negotiations and due
diligence reviews, the Company will complete any such acquisitions.

An important element of the Company's business strategy is to continue to
expand its geographic presence to gain additional regional and multi-regional
account opportunities with large multi-family housing property managers and
owners. Management believes that a significant portion of its customer base,
which manages multi-family housing and other residential properties, is
consolidating. Consequently, management believes that opportunities for
outsourcing coin-operated laundry equipment services to professionally managed,
multi-regional, well-capitalized independent operators such as the Company are
increasing.

The Company's business strategy also includes the continued development of
its management information systems (the "Integrated Computer Systems"), which
management believes are the most advanced in the industry. The Integrated
Computer Systems provide real-time operational and competitive data, which in
conjunction with the Company's multi-regional service capabilities, enhance the
Company's operating efficiencies throughout its regions and enable the Company
to deliver superior customer service. The Integrated Computer Systems also
provide the Company with the flexibility to integrate acquisitions on a timely
basis, including key functions such as sales, service, collections and
security. Finally, as the industry leader, the Company works closely with its
equipment vendors to assess ongoing technological changes and implements those
which the Company believes are beneficial to customer service, operating
efficiencies and financial performance.

FINANCIAL CHARACTERISTICS OF THE BUSINESS

The Company's business has the following financial characteristics:

Recurring Revenues. The Company derives a majority of its revenues from
outsourced coin-operated laundry equipment services typically performed under
long-term contracts with landlords, property management companies and owners of
rental apartment buildings, condominiums and cooperatives, university and
institutional housing and other multi-family housing properties. Management
estimates that approximately 90% of its locations are subject to long-term
contracts with initial terms of three to ten years, most of which have
automatic renewal or right of first refusal provisions. During the 1997 fiscal
year, the Company retained approximately 97% of its existing machine base. The
Company believes that its ability to retain its customers and machine base is
attributable to a number of factors, including the Company's national
reputation for superior service, the structure of its contracts and the
strength of its long-term customer relationships.

Diversified Customer Base. The Company provides outsourced coin-operated
laundry equipment services to over 42,000 laundry rooms in its operating
regions, and no one customer accounts for more than 2% of its revenues.
Management estimates that the Company's services are located in multi-family
housing properties containing over four million individual housing units.

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Leverageable Cash Flows. Due to the stable, recurring nature of the Company's
revenues and its consistent EBITDA levels, the Company has been able to obtain
debt financing on favorable terms to support its acquisition strategy. This use
of debt financing to support growth is an important component of the Company's
financial strategy, and the Company believes that access to both the public and
private debt markets provides it with a competitive advantage.

Benefits of Scale. By increasing its installed machine base, the Company has
benefited from economies of scale in both operating costs and purchasing power.
The Company is able to leverage its existing infrastructure, including its
sales, service, collections, security and corporate overhead, over a larger
installed machine base than its competition. As a result, the Company has been
able to improve its EBITDA margin as it has increased its size. For the twelve
months ended March 29, 1996, the 1997 fiscal year and the three months ended
June 27, 1997, the Company's EBITDA margins were 28.6%, 30.4% and 31.0%,
respectively. Furthermore, due to its purchasing power, management believes
that the Company is able to purchase equipment on terms more favorable for
costs lower than those available to smaller industry participants.

Significant Portion of Capital Investment Related to Growth. During the 1997
fiscal year, the Company spent $213.0 million in capital expenditures, of which
$171.5 million, or approximately 80.6%, was used to finance acquisitions as
part of the Company's growth strategy. Of the remaining capital investment,
$12.5 million, or approximately 5.8%, was used for internally generated growth
and $29.1 million, or approximately 13.6%, related to the renewal of the
Company's existing machine base.

5
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THE OFFERING

Common Stock offered by Coinmach Laundry
the Company................................
2,500,000 shares

Common Stock offered by the Selling 1,250,000 shares(1)
Stockholders...............................

Common Stock to be outstanding after the 12,635,915 shares(2)
Offering...................................

Common Stock and non-voting common stock,
$.01 par value per share (the "Non-Voting
Common Stock"), to be outstanding after
the Offering...............................
13,004,311 shares(2)

Use of Proceeds............................. Repayment of debt and general
corporate purposes, which may
include certain selected
acquisitions. See "Use of
Proceeds."

Nasdaq National Market Symbol............... WDRY

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(1) Assumes no exercise of the Underwriters' over-allotment option. The Company
will not receive any of the proceeds from the sale of shares sold by the
Selling Stockholders (exclusive of amounts paid in respect of the exercise
of options).
(2) Does not include 1,109,147 shares of Common Stock issuable under the Second
Amended and Restated 1996 Employee Stock Option Plan (the "1996 Stock
Option Plan"), of which 85,500 shares of Common Stock underlie options that
will be exercisable immediately after the Offering. Does not include
1,059,437 shares of Common Stock issuable upon exercise of stock options
granted outside of the 1996 Stock Option Plan (collectively, the "Non-Plan
Options") of which 395,785 shares underlie options that will be exercisable
immediately after the Offering. Includes approximately 19,385 shares of
Common Stock to be issued upon exercise of certain options and
approximately 112,252 shares of Common Stock to be issued upon conversion
of certain shares of Non-Voting Common Stock, in each case held by certain
Selling Stockholders in connection with the Offering.

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

The following table presents consolidated summary historical financial data
and unaudited pro forma financial data of the Company for the 1997 fiscal year
and for the three months ended June 27, 1997 and the unaudited summary
historical financial data for the twelve months ended March 29, 1996 (which
consist of the combined operations of the Company's predecessors), and the
three months ended June 28, 1996. The pro forma financial data give effect to
(i) certain acquisitions, including the Kwik Wash Acquisition, the Reliable
Acquisition, the Appliance Warehouse Acquisition and the National Coin
Acquisition (each, as defined), (ii) the Bond Offering (as defined) and (iii)
the Offering (as defined) (collectively, the "Transactions"), as if the
Transactions occurred at the beginning of the applicable 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 consolidated
financial statements and the related notes thereto included and incorporated by
reference into this Prospectus and under the headings "Unaudited Pro Forma
Financial Data" and "Management's Discussion and Analysis of Financial
Condition and Results of Operations."

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(1) The combined historical audited financial data for the twelve months ended
March 29, 1996 consist of the six month transition period ended March 29,
1996 and the six months ended September 29, 1995 have been combined.
(2) Total debt does not include the premium of $9.875 million recorded on the
issuance by Coinmach Corporation ("Coinmach") of $100 million aggregate
principal amount of its 11 3/4% Series C Senior Notes due 2005 (the "Series
C Notes") in the Bond Offering.

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(3) EBITDA represents earnings from continuing operations before deductions for
interest, income taxes, depreciation and amortization. EBITDA for the
periods ending March 28, 1997 and June 27, 1997 is before the deduction of
stock based compensation charges, and EBITDA for the period ended March 29,
1996 is before the deduction for restructuring costs. EBITDA is used by
management and certain investors as an indication of a company's historical
ability to service debt. Management believes that an increase in EBITDA is
an indicator of the Company's improved ability to service existing debt, to
sustain potential future increases in debt and to satisfy 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."
(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) Capital expenditures represent amounts expended for property and equipment,
for advance rental payments to location owners and for acquisitions.
Acquisition capital expenditures represent the amounts expended to acquire
local, regional and multi-regional route operators, as well as
complementary businesses. Growth capital expenditures represent the amount
of capital expended that reflects a net increase in the installed base of
machines, excluding acquisitions. Renewal capital expenditures represent
the amount of capital expended assuming no net increase in the installed
base of machines.
(6) For the year ended March 28, 1997, includes approximately $16.2 million of
promissory notes issued by Coinmach Laundry related to certain
acquisitions.

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RISK FACTORS

This Prospectus and other reports and statements filed by Coinmach Laundry
(collectively, "Commission Filings") from time to time with the Securities and
Exchange Commission (the "Commission") contain or may contain certain forward
looking statements and information that are based on the beliefs of the
Company's management as well as estimates and assumptions made by, and
information currently available to, the Company's management. When used in
Commission Filings, the words "anticipate," "believe," "estimate," "expect,"
"future," "intend," "plan" and similar expressions, as they relate to Coinmach
Laundry or its management, identify forward looking statements. Such
statements reflect the current views of the Company with respect to future
events and are subject to certain risks, uncertainties and assumptions
relating to the Company's operations and results of operations, competitive
factors, shifts in market demand, and other risks and uncertainties,
including, in addition to any uncertainties specifically identified in the
text surrounding such statements, uncertainties with respect to changes or
developments in social, economic, business, industry, market, legal and
regulatory circumstances and conditions and actions taken or omitted to be
taken by third parties, including the Company's stockholders, customers,
suppliers, competitors, legislative, regulatory, judicial and other
governmental authorities. Should one or more of these risks or uncertainties
materialize, or should the underlying assumptions prove incorrect, actual
results may vary significantly from those anticipated, believed, estimated,
expected, intended or planned. 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 June 27,
1997, on a pro forma basis after giving effect to the National Coin
Acquisition, the Bond Offering and the Offering, the Company would have had
outstanding indebtedness of approximately $375.1 million (excluding the
premium on the Series C Notes) and stockholders' equity of $77.0 million.

The Company's level of indebtedness will have several important effects on
its future operations, including, but not limited to, 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 agreements governing the Company's indebtedness will require
the Company to meet certain financial tests and will limit its ability to
borrow additional funds, to dispose of assets and to pay dividends; (iii) the
Company's ability to obtain additional financing in the future for working
capital, capital expenditures, acquisitions or 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 agreements governing Coinmach'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 its indebtedness
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 (including
for acquisitions), selling assets, refinancing or restructuring its
indebtedness, selling additional equity capital or other actions. There is no

9
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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 net losses before extraordinary items of approximately
$10.2 million and $3.5 million for the year ended March 28, 1997 and the three
months ended June 27, 1997, respectively. As of June 27, 1997, the Company had
an accumulated deficit of approximately $32.8 million. No assurance can be
given that net losses will not continue 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 has historically focused on obtaining long-term,
renewable lease contracts, and management estimates that approximately 90% of
its locations are subject to long-term leases with initial terms of three to
ten years. There can be no assurance that the Company will be able to renew
its leases as they expire or that new leases will contain the same renewal and
other material terms. See "Business--Operations--Location Leasing."

Risks of Acquisitions and Integration of 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 businesses 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 would 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 operates in a capital intensive industry
and must continue to make capital expenditures to maintain its operating base.
The Company spent approximately $29.1 million on renewal capital expenditures
for the 1997 fiscal year. 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.

Management of Growth. The Company expects to grow through internal growth
and acquisitions. Management expects to expend significant time and effort in
evaluating, completing and integrating such acquisitions. There can be no
assurance that the Company's systems, procedures and controls will be adequate
to support the Company's operations as they expand. Any future growth will
also impose significant added responsibilities on members of senior
management, including the need to identify, recruit and integrate new senior
level managers and executives. There can be no assurance that such additional
management will be identified and retained by the Company. To the extent that
the Company is unable to manage its growth efficiently and effectively, or is
unable to attract and retain additional qualified management, the Company's
financial condition and results of operations could be materially adversely
affected. See "Business--Business Strategy."

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.

10
<PAGE>

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.

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.

Control by Principal Shareholder. Immediately after the Offering, Golder,
Thoma, Cressey, Rauner Fund IV ("GTCR") will own approximately 27.6% of
Coinmach Laundry's 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). GTCR and certain
holders of Common Stock are parties to a Voting Agreement dated July 23, 1996
(the "Voting Agreement") that gives GTCR the ability, at all times that it
holds at least 20% of the outstanding voting securities of Coinmach Laundry,
to designate for election a majority of the Company's directors and therefore
influence the outcome of substantially all issues submitted to Coinmach
Laundry's stockholders, including mergers, sales of all or substantially all
of the Company's assets and similar fundamental corporate changes.

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. Notwithstanding
the fragmentation of the industry, there are currently three companies,
including the Company, with significant operations in multiple regions
throughout the United States. Some of the Company's competitors may possess
greater financial and other resources than the Company. Furthermore, current
and potential competitors may make acquisitions or may establish relationships
among themselves or with third parties to increase their ability to compete
within the industry. Accordingly, it is possible that new competitors may
emerge and rapidly acquire significant market share. If this were to occur,
the business, operating results, financial condition and cash flows of the
Company could be materially adversely affected.

Significant Intangible Assets. Adjusted for the National Coin Acquisition,
the Bond Offering and the Offering, approximately $332.7 million or 56.8% of
the Company's total assets would have been intangible assets, consisting
primarily of contract rights and goodwill as of June 27, 1997. 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. Coinmach Laundry 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, Coinmach Laundry is prohibited by the terms of
the Credit Agreement (as defined) from paying dividends on its capital stock.
See "Dividend Policy."

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 Coinmach Laundry's Third
Amended and Restated Certificate of Incorporation (the "Third Amended and
Restated Certificate of Incorporation") and the

11
<PAGE>

Second Amended and Restated Bylaws (the "Second Amended and Restated Bylaws")
may discourage, delay or make more difficult a change in control of Coinmach
Laundry, or prevent the removal of incumbent directors even if some, or a
majority, of Coinmach Laundry'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
Coinmach Laundry (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
Coinmach Laundry 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 Coinmach
Laundry. In addition, Coinmach Laundry 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. 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 13,004,311 shares of Common Stock and
Non-Voting Common Stock that will be issued and outstanding following the
Offering, 6,815,279 shares of Common Stock 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 6,189,032 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 BT Alex. Brown
Incorporated, offer, sell, contract to sell or otherwise dispose of their
shares for a period of 90 days from the date of this Prospectus. After
expiration of such lock-up agreements, all of the 6,189,032 restricted
securities will be eligible for sale under Rule 144 of the Securities Act. See
"Shares Eligible for Future Sale."

Possible Volatility of Stock Price. Coinmach Laundry's stock price has been
volatile since its initial public offering. Coinmach Laundry believes that
factors such as quarterly fluctuations in results of operations, announcements
of acquisitions by the Company or by its competitors, changes in revenue,
EBITDA or earnings estimates by securities analysts, developments in
litigation affecting the Company, changes in accounting principles or their
application and other factors may cause the market price of Coinmach Laundry's
stock to continue to fluctuate, perhaps substantially. Due to market and
securities analysts' expectations of continued growth, any shortfall in
meeting such expectations may have a rapid and significant adverse effect on
the trading price of Coinmach Laundry's Common Stock. These fluctuations, as
well as general economic, market and other conditions may adversely affect the
market price of Coinmach Laundry's Common Stock in the future. Fluctuations in
the market price of Coinmach Laundry's Common Stock may in turn adversely
affect the Company's ability to complete any targeted acquisitions, its access
to capital and financing and its ability to attract and retain qualified
personnel. See "Price Range of Common Stock."

12
<PAGE>

THE COMPANY

The Company, established in 1947, is the leading supplier of outsourced
coin-operated laundry equipment services for multi-family housing properties
in the United States. The Company's business involves leasing laundry rooms
from building owners and property management companies, installing and
servicing the laundry equipment and collecting revenues generated from laundry
machines. The Company owns and operates approximately 415,000 coin-operated
washers and dryers in approximately 42,000 locations on routes throughout the
United States and in 151 retail laundromats located throughout Texas.

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.

Acquisitions. In January 1995, the Company initiated a strategy of
controlled growth through acquisitions. This strategy was designed to increase
the installed machine base in its then existing operating region as well as to
provide the Company with a strong market presence in new regions. Since
January 1995, the Company has completed six significant acquisitions adding
revenues of approximately $221 million and expanding its national presence
from the Northeast into the Mid-Atlantic, Southeast, South-Central, Midwest
and Western regions of the United States. Accordingly, the Company has grown
its installed base from approximately 54,000 machines to approximately 415,000
machines.

The acquisitions described below have enabled the Company to increase its
installed machine base, improve its EBITDA margins and expand its geographic
presence through the acquisition of operations in new regions:

<TABLE>
<CAPTION>
APPROXIMATE
HISTORICAL
ANNUAL
DATE ACQUISITION TARGET REVENUES DESCRIPTION OF OPERATIONS
- ----------------- ------------------------ ------------- ---------------------------------
(IN MILLIONS)
<S> <C> <C> <C>
November 30, 1995 Solon Automated $100 Multi-regional operator providing
Services, Inc. Mid-Atlantic, South-Central and
Southeast presence.
April 1, 1996 Allied Laundry Equipment 9 Regional operator providing
Company Midwest presence.
January 8, 1997 Kwik Wash Laundries, 63 Multi-regional operator providing
L.P. expanded South-Central presence
and operations in laundromat
business.
March 14, 1997 Atlanta Washer & Dryer 2 Regional operator providing
Leasing, Inc. expanded presence in Southeast
and operations in the machine
rental market for individual
housing units.
April 23, 1997 Reliable Holding Corp. 31 Regional operator providing
Western presence (California and
northern Mexico).
July 17, 1997 National Coin Laundry 16 Regional operator providing
Holding, Inc. expanded Midwest presence.
</TABLE>

On November 30, 1995, the Company acquired (the "Solon Acquisition") the
capital stock of Solon Automated Services, Inc. ("Solon"), a multi-regional
route operator for $141.5 million. The Solon Acquisition gave the Company an
immediate and significant operating presence in the Mid-Atlantic, South-
Central and Southeast regions.

13
<PAGE>

On April 1, 1996, the Company acquired (the "Allied Acquisition")
substantially all of the assets of Allied Laundry Equipment Company
("Allied"), a regional route operator located in St. Louis, Missouri for $15.5
million in cash. The Allied Acquisition provided the Company with a larger
market presence in the Mid-West region.

On January 8, 1997, the Company acquired (the "Kwik Wash Acquisition") 100%
of the outstanding voting securities of the partners of Kwik Wash Laundries,
L.P. ("Kwik Wash") for $125 million in cash and a $15 million promissory note
(the "9 7/8% Promissory Note"). The Kwik Wash Acquisition increased the
Company's presence in the South-Central region by enabling the Company to
provide coin-operated laundry equipment services to multi-family housing
properties in Texas, Louisiana, Arkansas and Oklahoma and to operate 150
retail laundromats throughout Texas.

On March 14, 1997, the Company acquired (the "Appliance Warehouse
Acquisition") substantially all of the assets of Atlanta Washer & Dryer
Leasing, Inc. ("Appliance Warehouse"), for approximately $6.3 million in cash
and promissory notes aggregating $1.2 million. The Appliance Warehouse
Acquisition increased the Company's presence in the Southeast region and
expanded the Company's operations into the related machine rental market for
individual housing units providing an additional growth opportunity in a
complementary market.

On April 23, 1997, the Company completed the acquisition and merger (the
"Reliable Acquisition") of Reliable Holding Corp. ("Reliable") and its
subsidiaries, Reliable Laundry Service Inc., Girard-Hopkins Acquisition Corp.,
Maquilados Automaticas S.A. de C.V., and Automatica S.A. de C.V.
(collectively, the "Reliable Entities") with and into the Company, for $44
million in cash. The Reliable Acquisition provided the Company with a strong
foothold in the California market and an entry into the northern Mexican
market.

On July 17, 1997, the Company acquired 100% of the outstanding voting
securities of National Coin Laundry Holding, Inc. ("National Coin"), and
National Laundry Equipment Company, an Ohio corporation ("NLEC"). National
Coin is the parent of National Coin Laundry, Inc., an Ohio corporation ("NCL")
and the assets of Whitmer Vend-O-Mat Laundry Services, Inc. ("Whitmer"). The
Company acquired (the "National Coin Acquisition") National Coin, NLEC, NCL
and Whitmer (collectively, the "NCL Entities") for an aggregate purchase price
of approximately $19.0 million in cash. The National Coin Acquisition enabled
the Company to further expand its operations in the Mid-Atlantic, Southeast,
South-Central and Midwest regions by providing coin-operated laundry equipment
services to multi-family housing properties in the states of Ohio, Indiana,
Kentucky, Michigan, West Virginia, Pennsylvania, Georgia, Tennessee, Illinois
and Florida, as well as distributing exclusive lines of commercial coin and
non-coin laundry machines and parts, and selling service contracts.

As part of its growth strategy, the Company continues to evaluate additional
acquisition opportunities. There can be no assurance however that, subsequent
to ongoing negotiations and due diligence reviews, the Company will complete
any such acquisitions.

14
<PAGE>

USE OF PROCEEDS

The net proceeds to Coinmach Laundry from the sale of the 2,500,000 shares
of Common Stock offered by it hereby are estimated to be $56.5(3) million,
assuming an offering price of $24.50 per share and after deducting
underwriting discounts and commissions and estimated offering expenses. The
Company intends to use such net proceeds to repay $23.5 million of outstanding
Tranche B indebtedness(1) under the Credit Facility (as defined), to repay $15
million of outstanding indebtedness evidenced by the 9 7/8% Promissory
Note,(2) and for general corporate purposes, which may include certain
selected acquisitions. 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. Pending such
uses, the Company intends to invest the net proceeds from the Offering in
short-term, investment-grade, interest-bearing instruments. The Company will
not receive any of the proceeds from the sale of shares of Common Stock by the
Selling Stockholders.

In connection with the Offering, the Company intends to amend and restate
its existing senior credit facility (the "Credit Facility") established with
Bankers Trust Company, as administrative agent, and the other lenders named in
the Credit Agreement dated as of January 8, 1997 (as amended, and
supplemented, the "Credit Agreement"). See "Management's Discussion and
Analysis of Financial Condition and Results of Operations--Liquidity and
Capital Resources."
- --------
(1) The Tranche B term loan bears interest at an annual rate of LIBOR plus
2.75% (8.4375% as of October 13, 1997), matures on June 30, 2004 and was
incurred to finance the Kwik Wash Acquisition.
(2) Indebtedness evidenced by the 9 7/8% Promissory Note matures on June 15,
2004 and was issued by the Company as partial consideration for the Kwik
Wash Acquisition.
(3) Excludes proceeds to be received from the exercise of options by certain
Selling Stockholders in connection with the Offering in an approximate
amount of $.3 million.

PRICE RANGE OF COMMON STOCK

Coinmach Laundry's Common Stock is traded on the Nasdaq National Market
under the symbol "WDRY." The following table sets forth for the periods
indicated, the high and low closing prices for Coinmach Laundry's Common Stock
as reported on the Nasdaq National Market.

<TABLE>
<CAPTION>
HIGH LOW
------ ------
<S> <C> <C>
FISCAL 1997
Second Quarter (from July 16, 1996)......................... $20.13 $13.00
Third Quarter............................................... 22.75 17.25
Fourth Quarter.............................................. 20.25 17.00
FISCAL 1998
First Quarter............................................... 22.50 14.75
Second Quarter.............................................. 24.00 20.75
Third Quarter (through October 13, 1997).................... 24.63 23.88
</TABLE>

On October 13, 1997, the last reported sale price of the Common Stock on the
Nasdaq National Market was $24.50 per share. As of October 13, 1997, there
were approximately 35 holders of record of the Company's Common Stock, and the
number of beneficial holders of Common Stock was estimated to be in excess of
550.

15
<PAGE>

DIVIDEND POLICY

Coinmach Laundry has not declared or paid any cash dividends on the Common
Stock and does not intend to pay cash dividends on its capital stock in the
foreseeable future. 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. At the
present time, the Company is prohibited by the terms of the Credit Agreement
from paying dividends on its capital stock.

At the present time, dividend payments to Coinmach Laundry 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."

16
<PAGE>

DILUTION

The net tangible book value (deficit) of the Company as of June 27, 1997 was
approximately ($292.4) million, or ($27.89) per share of Common Stock. Net
tangible book value per share represents the Company's total tangible assets
less its total liabilities, divided by 10,484,926 shares of Common Stock
outstanding. After giving effect to the Offering at an assumed offering price
of $24.50 per share, the pro forma net tangible book value (deficit) of the
Company as of June 27, 1997 would have been approximately ($255.7) million, or
($19.66) per share. This adjustment represents an immediate increase in net
tangible book value of $8.23 per share to the existing stockholders and an
immediate net tangible book value dilution of $44.16 per share to the
investors purchasing shares of Common Stock in the Offering. The following
table illustrates this dilution on a per share basis:

<TABLE>
<S> <C> <C>
Assumed public offering price per share...................... $ 24.50
Net tangible book value (deficit) per share at June 27,
1997...................................................... $(27.89)
Increase in net tangible book value per share attributable
to new investors.......................................... 8.23
-------
Pro forma net tangible book value (deficit) per share after
the Offering.............................................. (19.66)
-------
Dilution per share to new investors.......................... $ 44.16
=======
</TABLE>

The following table summarizes, based on the assumptions set forth herein,
as of June 27, 1997, the number of shares of 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...... 10,484,926 80.7% $ 77,408,364 55.7% $ 7.38
New investors.............. 2,519,385 19.3 61,510,107 44.3% 24.41
---------- ----- ------------ -----
Total.................... 13,004,311 100.0% $138,918,471 100.0%
========== ===== ============ =====
</TABLE>

The computations in the tables set forth above exclude (i) an aggregate of
859,437 shares of Common Stock underlying Non-Plan non-qualified stock options
granted by the Company to MCS Capital, Inc. ("MCS"), an entity beneficially
owned by Stephen R. Kerrigan, and to Robert M. Doyle, Michael E. Stanky, John
E. Denson, David Siegel, A. Daniel Osborne, James N. Chapman and certain other
individuals (the "Options"), of which 325,785 shares underlie options
exercisable within sixty days after June 27, 1997, (ii) an aggregate of
120,000 shares of Common Stock underlying non-qualified stock options (the
"Independent Director Options") granted by the Company to Dr. Arthur B. Laffer
and Stephen G. Cerri, independent directors of the Company, of which 30,000
shares underlie options exercisable within sixty days after June 27, 1997, and
(iii) 1,109,147 shares of Common Stock issuable under the 1996 Stock Option
Plan, of which 78,500 shares underlie options exercisable within sixty days
after June 27, 1997. The computations in the table set forth above include the
issuance of 19,385 shares of Common Stock issuable upon the exercise of
certain options held by certain Selling Stockholders in connection with 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.

17
<PAGE>

CAPITALIZATION

The following table sets forth the capitalization of the Company as of June
27, 1997 (i) on an actual basis and, (ii) as adjusted to give effect to the
National Coin Acquisition and the Bond Offering (collectively, the "Recent
Transactions"), and (iii) as adjusted, to give effect to the Recent
Transactions, the Offering and 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>
JUNE 27, 1997
---------------------------------
AS ADJUSTED AS FURTHER
FOR THE ADJUSTED
RECENT FOR THE
ACTUAL TRANSACTIONS OFFERING
-------- ------------ ----------
(IN THOUSANDS)
<S> <C> <C> <C>
Cash and cash equivalents.................... $ 19,401 $ 17,079 $ 35,373
======== ======== ========
Long-term debt:
11 3/4% Senior Notes due 2005(1)........... $196,655 $296,655 $296,655
Credit Facility(2)......................... 188,000 98,500 75,000
9 7/8% Promissory Note..................... 15,000 15,000 --
Other long-term debt....................... 3,463 3,485 3,485
-------- -------- --------
Total long-term debt..................... 403,118 413,640 375,140
Stockholders' equity (deficit):
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................. -- -- --
Common Stock, $.01 par value: 15,000,000
shares authorized and 10,004,278 shares
issued and outstanding actual;
15,000,000 shares authorized and
12,635,915 shares issued and outstanding
as adjusted(3).......................... 100 100 126
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 368,396
shares issued and outstanding as
adjusted(4)............................. 5 5 4
Additional paid-in capital................. 53,304 53,304 110,073
Accumulated deficit........................ (32,776) (32,776) (32,776)
Less receivables from stockholders......... (439) (439) (439)
-------- -------- --------
Total stockholders' equity............... 20,194 20,194 76,988
-------- -------- --------
Total capitalization................... $423,312 $433,834 $452,128
======== ======== ========
</TABLE>
- --------
(1) Gross proceeds from the Bond Offering were $109.9 million consisting of
(i) $100 million aggregate principal amount of the Series C Notes and (ii)
$9.9 million premium on the Series C Notes (which premium is not included on
the presentation above). The issue price represents a 9.94% yield to
maturity.
(2) As of June 27, 1997, on a pro forma basis after giving effect to the Bond
Offering, the Offering and the application of the net proceeds therefrom,
the Company would have had $70.0 million of unused borrowing capacity under
the Credit Facility. Concurrently with the Offering, the Company intends to
amend and restate its Credit Facility. Such amended and restated Credit
Facility is expected to provide for $235 million of financing consisting of
(i) a $35 million working capital revolving credit facility (undrawn at
closing of the Offering), (ii) a $125 million acquisition revolving credit
facility (undrawn at closing of the Offering) and (iii) a $75 million term
loan facility (fully funded at closing of the Offering). The working capital
revolving credit facility and the acquisition revolving credit facility are
expected to have a maturity of six years, and the term loan facility is
expected to have a maturity of seven and one-half years. See "Management's
Discussion and Analysis of Financial and Condition and Results of
Operations--Liquidity and Capital Resources."
(3) As of June 27, 1997, excludes (i) an aggregate of 859,437 shares of Common
Stock issuable upon exercise of the Options, of which 325,785 shares of
Common Stock underlie options exercisable within sixty days after June 27,
1997, (ii) an aggregate of 120,000 shares of Common Stock issuable upon
exercise of the Independent Director Options, of which 30,000 shares of
Common Stock underlie options exercisable within sixty days after June 27,
1997, and (iii) an aggregate of 1,109,147 shares of Common Stock issuable
pursuant to the 1996 Stock Option Plan, of which 78,500 shares of Common
Stock underlie options exercisable within sixty days after June 27, 1997.
Includes 19,385 shares of Common Stock issuable upon the exercise of
certain options and approximately 112,252 shares of Common Stock issuable
upon the conversion of certain shares of Non-Voting Common Stock, in each
case, held by certain Selling Stockholders, in connection with the
Offering.
(4) Shares of Non-Voting Common Stock are being converted into Common Stock to
the extent such shares are being sold in the Offering.

18
<PAGE>

UNAUDITED PRO FORMA FINANCIAL DATA

The following unaudited pro forma combined balance sheet of the Company as
of June 27, 1997, gives effect to the Recent Transactions and the Offering and
the application of the proceeds therefrom as if such transactions occurred as
of June 27, 1997. The unaudited pro forma combined statements of operations of
the Company for the 1997 fiscal year and the three month interim period ended
June 27, 1997 give effect to the Transactions, as if such transactions
occurred on March 30, 1996. 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. Each
of the acquisitions comprising the Transactions were accounted for as a
purchase with assets recorded at their estimated fair market values.
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 had the foregoing transactions been consummated as of the
indicated dates. The unaudited pro forma combined financial statements should
be read in conjunction with the notes thereto and the historical consolidated
financial statements of the Company, together with the related notes thereto,
presented elsewhere in or incorporated by reference by, this Prospectus.

19
<PAGE>

UNAUDITED PRO FORMA COMBINED BALANCE SHEET

June 27, 1997
(In thousands)

<TABLE>
<CAPTION>
HISTORICAL
BASES OF PRO FORMA ADJUSTMENTS
ASSETS OF --------------------------------------
COMPANY ACQUIRED PURCHASE PRO FORMA
HISTORICAL BUSINESSES (A) ACCOUNTING (B) OTHER COMBINED
---------- -------------- -------------- ---------- ---------
<S> <C> <C> <C> <C> <C>
ASSETS:
Cash and cash
equivalents........... $ 19,401 $ 161 $(2,483) $ 18,294(c) $ 35,373
Receivables, net....... 6,467 2,576 (1,218) -- 7,825
Inventories and prepaid
expenses.............. 14,297 567 18 -- 14,882
Advance rental
payments.............. 43,975 1,812 -- -- 45,787
Property and equipment,
net................... 126,855 3,321 -- -- 130,176
Contract rights, net... 208,367 83 13,426 -- 221,876
Goodwill, net.......... 104,246 -- 6,532 -- 110,778
Other assets........... 12,710 932 1,350 4,375(b) 18,502
(865)
-------- ------ ------- ---------- --------
Total assets........... $536,318 $9,452 $16,760 $ 22,669 $585,199
======== ====== ======= ========== ========
LIABILITIES AND
STOCKHOLDERS' EQUITY:
Accounts payable and
accrued liabilities... $ 38,436 $2,876 $ 1,826 $ -- $ 43,138
Deferred income taxes.. 74,570 145 5,343 -- 80,058
11 3/4% Series A/B/C
Notes due 2005........ 196,655 -- -- 100,000(b) 296,655
Premium on 11 3/4%
Series C Notes due
2005.................. -- -- -- 9,875(b) 9,875
Credit facility........ 188,000 -- 16,000 (105,500)(b) 75,000
(23,500)(c)
9 7/8% Promissory
Note.................. 15,000 -- -- (15,000)(c) --
Other long-term debt... 3,463 4,201 (4,179) -- 3,485
-------- ------ ------- ---------- --------
516,124 7,222 18,990 (34,125) 508,211
-------- ------ ------- ---------- --------
Stockholders' equity:
Common stock and
capital in excess of
par value............. 53,409 1,486 (1,486) 56,794(c) 110,203
Preferred Stock........ -- -- -- -- --
Accumulated Deficit.... (32,776) 744 (744) -- (32,776)
-------- ------ ------- ---------- --------
20,633 2,230 (2,230) 56,794 77,427
Receivables from
stockholders.......... (439) -- -- -- (439)
-------- ------ ------- ---------- --------
Total stockholders'
equity................ 20,194 2,230 (2,230) 56,794 76,988
-------- ------ ------- ---------- --------
Total liabilities and
stockholder's equity.. $536,318 $9,452 $16,760 $ 22,669 $585,199
======== ====== ======= ========== ========
</TABLE>
- --------
(a) Reflects the historical bases of assets acquired in the National Coin
Acquisition.
(b) Reflects allocation of purchase price for the National Coin Acquisition
which was accounted for as a purchase. Preliminary purchase price
allocations to property, plant and equipment and contract rights are based
on fair value using a methodology consistent with prior acquisitions.
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. Coinmach funded the
acquisition with revolving loans under the Credit Facility and the balance
by cash.
(c) Reflects issuance of Series C Notes pursuant to the Bond Offering and the
application of the net proceeds therefrom. The Series C Notes were issued
at a premium of $9.875 million. Reflects payment of consent fee,
underwriter fees and accrual of transaction expenses for professional fees.
(d) Reflects as set forth in the following table the Offering and the
application of the Proceeds:

<TABLE>
<S> <C> <C>
Gross proceeds from the issuance of 2,500,000 shares of
Common Stock at the offering price of $24.50 per
share.................................................. $61,250
Deduct transaction fees and expenses:
Transaction fees....................................... $3,216
Expenses............................................... 1,500
------ -------
4,716
-------
Net cash to the Company................................. $56,534
=======
</TABLE>
In addition, includes proceeds to be received from the issuance of Common
Stock upon the exercise of options held by certain Selling Stockholders in
connection with the Offering.

20
<PAGE>

UNAUDITED PRO FORMA COMBINED STATEMENTS OF OPERATIONS

Year Ended March 28, 1997
(In thousands, except per share data)

<TABLE>
<CAPTION>
PRO FORMA ADJUSTMENTS
---------------------
COMPANY ACQUIRED PURCHASE PRO FORMA
HISTORICAL BUSINESSES (A) ACCOUNTING OTHER COMBINED
---------- -------------- ------------- ---------- ---------
<S> <C> <C> <C> <C> <C>
REVENUES................ $206,852 $100,061 $ 0 $ 0 $306,913
COSTS AND EXPENSES
Operating, general and
administrative
expenses.............. 144,059 71,925 0 (5,254)(b) 209,234
(1,823)(c)
327 (d)
Depreciation and
amortization.......... 46,316 15,824 (2,070)(e) 71,973
11,506 (f)
397 (g)
Stock based
compensation charge... 2,152 0 0 0 2,152
-------- -------- ---------- ---------- --------
192,527 87,749 9,833 (6,750) 283,359
Operating income........ 14,325 12,312 (9,833) 6,750 23,554
Interest expense, net... 26,859 2,879 0 10,272 (h) 40,010
Other nonoperating
expenses............... 0 472 (626) 0 (154)
-------- -------- ---------- ---------- --------
(Loss) income before
income taxes........... (12,534) 8,961 (9,207) (3,522) (16,302)
-------- -------- ---------- ---------- --------
Provision (benefit) for
income taxes........... (2,307) 280 (1,749)(i) 679 (i) (3,097)
-------- -------- ---------- ---------- --------
(Loss) income before
extraordinary item..... $(10,227) $ 8,681 $ (7,458) $ (4,201) $(13,205)
======== ======== ========== ========== ========
Loss per share before
extraordinary item..... $ (1.11) $ (1.12)
======== ========
</TABLE>

See Accompanying Notes

21
<PAGE>

NOTES TO UNAUDITED PRO FORMA
COMBINED STATEMENTS OF OPERATIONS
Year Ended March 28, 1997
(In thousands)

(a) Represents historical operating results of (i) Kwik Wash for the period
prior to the Kwik Wash Acquisition; (ii) Appliance Warehouse for the
period prior to the Appliance Warehouse Acquisition; (iii) Reliable for
the year ended June 30, 1996; and (iv) the NCL Entities.
(b) Represents expected cost savings related to the Kwik Wash Acquisition, the
Reliable Acquisition and the National Coin Acquisition, in each case
resulting from the consolidation of various operational and administrative
functions.
(c) Reflects an adjustment to conform the capitalization of installation and
decoration costs to the accounting policy of the Company. Such costs were
expensed by: (i) Kwik Wash for the period prior to the Kwik Wash
Acquisition; (ii) the NCL Entities for the year ended December 31, 1996;
and (iii) the Reliable Entities for the year ended June 30, 1996.
(d) Reflects an adjustment to expense selling commissions to conform to the
accounting policy of the Company. Such costs were capitalized by the
Reliable Entities for the year ended June 30, 1996.
(e) Includes the decrease in depreciation expense of $959 and $1,137 for the
fixed assets of Kwik Wash and the Reliable Entities, respectively,
primarily resulting from extending the lives of laundry equipment and
components from 5 or 7 years to 8 years, to be consistent with the
Company's accounting policy.
(f) Represents the amortization of contract rights and goodwill over 15 years,
related to the Kwik Wash Acquisition, the Reliable Acquisition, the
National Coin Acquisition and the Appliance Warehouse Acquisition.
(g) Represents the amortization of the covenants not to compete over 5 years,
related to the Kwik Wash Acquisition, the National Coin Acquisition and
the Appliance Warehouse Acquisition.
(h) The following table presents a reconciliation of pro forma interest
expense:

<TABLE>
<CAPTION>
YEAR ENDED
MARCH 28, 1997
--------------
<S> <C>
Historical combined interest expense....................... $29,738
-------
Add:
Interest on $130.0 million term loan to finance the Kwik
Wash Acquisition........................................ 7,987
Interest on $15.0 million promissory note to finance the
Kwik Wash Acquisition................................... 1,111
Interest on $44.0 million term loan to finance the
Reliable Acquisition.................................... 3,608
Interest on $16.0 million revolving loan to finance the
National Coin Acquisition............................... 1,312
Interest on $100.0 million Series C Notes at 11.75%...... 11,750
Amortization of deferred financing costs on new debt:
Credit Facility........................................ 129
Senior Notes........................................... 547
Deduct:
Interest of acquired businesses.......................... (2,879)
Interest on $105.5 million term loans repaid by proceeds
of the Bond Offering.................................... (8,651)
Interest on $23.5 million term loans repaid with proceeds
from the Offering....................................... (1,927)
Interest on $15.0 million promissory note repaid with
proceeds from the Offering.............................. (1,481)
Amortization of premium on new debt (8 years)............ (1,234)
-------
Pro forma adjustment....................................... 10,272
-------
Pro forma interest expense................................. $40,010
=======
</TABLE>
(i) Represents the income tax impact on purchase accounting adjustments and
other pro forma adjustments.

22
<PAGE>

UNAUDITED PRO FORMA COMBINED STATEMENTS OF OPERATIONS

Three Months Ended June 27, 1997
(In thousands, except per share data)

<TABLE>
<CAPTION>
PRO FORMA ADJUSTMENTS
----------------------------
COMPANY ACQUIRED PURCHASE PRO FORMA
HISTORICAL BUSINESSES (A) ACCOUNTING OTHER COMBINED
---------- -------------- ------------- ----------- ---------
<S> <C> <C> <C> <C> <C>
REVENUES................ $72,095 $6,182 $ 0 $ 0 $78,277
COSTS AND EXPENSES
Operating, general and
administrative
expenses.............. 49,725 5,064 0 (206)(b) 53,772
21 (c)
(832)(d)
Depreciation and
amortization.......... 16,475 750 630 (e) 0 17,645
68 (f)
(278)(g)
Stock based
compensation charge... 145 0 0 0 145
------- ------ --------- ----------- -------
66,345 5,814 420 (1,017) 71,562
------- ------ --------- ----------- -------
Operating income........ 5,750 368 (420) 1,017 6,715
Interest expense, net... 10,063 148 0 81 (h) 10,292
------- ------ --------- ----------- -------
Net (loss) income before
income taxes........... (4,313) 220 (420) 936 (3,577)
Provision (benefit) for
income taxes: (800) 62 (80)(i) 138 (i) (680)
------- ------ --------- ----------- -------
Net (loss) income....... $(3,513) $ 158 $(340) $ 798 $(2,897)
======= ====== ========= =========== =======
Loss per share.......... $ (0.34) $ (0.22)
======= =======
</TABLE>

See Accompanying Notes

23
<PAGE>

NOTES TO UNAUDITED PRO FORMA
COMBINED STATEMENTS OF OPERATIONS

Three Months Ended
June 27, 1997
(In thousands)

(a) Represents historical combined operating results of: (i) Reliable for the
period prior to the Reliable Acquisition; and (ii) the NCL Entities.
(b) Reflects an adjustment to conform the capitalization of installation and
decorating costs to the accounting policy of the Company. Such costs were
expensed by Reliable for the period prior to the Reliable Acquisition and
by the NCL Entities for the period prior to the National Coin Acquisition.
(c) Reflects an adjustment to expense selling commissions to conform to the
accounting policy of the Company. Such costs were capitalized by Reliable
for the period prior to the Reliable Acquisition.
(d) Reflects expected cost savings related to the Reliable Acquisition and the
National Coin Acquisition, in each case resulting from the consolidation
of various operational and administrative functions.
(e) Represents the amortization of contract rights and goodwill over 15 years,
related to the Reliable Acquisition and the National Coin Acquisition.
(f) Represents the amortization of the covenant not to compete over 5 years,
related to the National Coin Acquisition.
(g) Represents the decrease in depreciation expense for the fixed assets of
the Reliable Entities primarily resulting from extending the lives of
laundry equipment and components from 5 or 7 years to 8 years, to be
consistent with the Company's accounting policy.
(h) The following table presents a reconciliation of pro forma interest
expense:

<TABLE>
<CAPTION>
THREE MONTHS
ENDED
JUNE 27, 1997
-------------
<S> <C>
Historical combined interest expense........................ $10,211
-------
Add:
Interest on $44.0 million term loan to finance the
Reliable Acquisition..................................... 150
Interest on $16.0 million revolving loan to finance the
National Coin Acquisition................................ 328
Interest on $100.0 million Series C Notes at 11.75%....... 2,938
Amortization of deferred finance costs on new debt:
Senior Notes............................................ 137
Deduct:
Interest of acquired businesses........................... (148)
Interest on $105.5 million term loans repaid by proceeds
of the Bond Offering..................................... (2,163)
Interest on $23.5 million term loan repaid with proceeds
from the Offering........................................ (482)
Interest on $15.0 million promissory note repaid with
proceeds from the Offering............................... (370)
Amortization of premium on new debt (8 years)............. (309)
-------
Pro forma adjustment........................................ 81
-------
Pro forma interest expense.................................. $10,292
=======
</TABLE>
(i) Represents income tax impact on purchase accounting adjustments and other
pro forma adjustments.

24
<PAGE>

SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE)

<TABLE>
<CAPTION>
COMBINED
TWELVE YEAR ENDED THREE MONTHS ENDED
MONTHS -------------------- -----------------------------
ENDED PRO FORMA PRO FORMA
MARCH 29, MARCH 28, MARCH 28, JUNE 28, JUNE 27, JUNE 27,
1996(1) 1997 1997 1996 1997 1997
--------- --------- --------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
OPERATING DATA:
Revenues............... $178,789 $206,852 $306,913 $ 47,940 $ 72,095 $ 78,277
Operating, general and
administrative
expenses.............. 127,636 144,059 209,234 33,621 49,725 53,772
Depreciation and
amortization.......... 36,635 46,316 71,973 9,810 16,475 17,645
Stock based
compensation charge... -- 2,152 2,152 -- 145 145
Restructuring expense.. 2,200 -- -- -- -- --
-------- -------- -------- -------- -------- --------
Operating income....... 12,318 14,325 23,554 4,509 5,750 6,715
Interest expense, net.. 23,817 26,859 40,010 6,141 10,063 10,292
Income taxes
(benefits)............ (2,860) (2,307) (3,097) (400) (800) (680)
-------- -------- -------- -------- -------- --------
Loss before
extraordinary item.... (8,639) (10,227) (13,205) (1,232) (3,513) (2,897)
Extraordinary loss (net
of taxes)(2).......... (8,925) (296) -- -- -- --
-------- -------- -------- -------- -------- --------
Net loss............... $(17,564) (10,523) (13,205) $ (1,232) $ (3,513) $ (2,897)
$ $
======== ======== ======== ======== ======== ========
Net loss per share(3).. $ (2.26) (1.14) (1.12) $ (0.16) $ (0.34) $ (0.22)
$ $
======== ======== ======== ======== ======== ========
BALANCE SHEET DATA (AT
END OF PERIOD):
Cash and cash
equivalents........... $ 19,858 $ 14,729 $ 3,240 $ 19,401 $ 35,373
Property and equipment,
net................... 82,699 112,116 92,139 126,855 130,176
Contract rights, net... 59,745 180,557 65,033 208,367 221,876
Total assets........... 249,148 472,921 250,276 536,318 585,199
Total debt(4).......... 202,765 345,486 208,661 403,118 375,140
Stockholders' (deficit)
equity................ (1,308) 23,563 (2,540) 20,194 76,988
FINANCIAL RATIOS AND
OTHER DATA (UNAUDITED):
Cash flow from
operating activities.. $ 24,403 $ 34,732 $ 50,828 $ 3,816 $ 8,673 $ 9,317
Cash used for investing
activities............ (39,201) (196,698) (273,884) (25,292) (60,616) (79,582)
Cash from (used for)
financing activities.. 23,882 156,837 234,871 (16,618) 56,615 90,649
EBITDA(5).............. 51,153 62,793 97,833 14,319 22,370 24,505
EBITDA margin(6)....... 28.6% 30.4% 31.9% 29.9% 31.0% 31.3%
Operating margin(7).... 6.9% 6.9% 7.7% 9.4% 8.0% 8.6%
Total capital
expenditures(8)....... $ 39,258 $213,043 $290,229 $ 25,292 $ 60,616 $ 79,582
</TABLE>
- --------
(1) The combined historical audited financial data for the twelve months ended
March 29, 1996 consist of the six month transition period ended March 29,
1996 and the six months ended September 29, 1995 have been combined.
(2) Represents extraordinary loss on the early extinguishment of debt on
February 14, 1997 and November 30, 1995, net of taxes.
(3) Net loss per share for the twelve month period ended March 29, 1996 is
presented on a pro forma basis to reflect certain transactions in
connection with the Company's initial public offering on July 23, 1996.

25
<PAGE>

(4) Total debt does not include the premium of $9.875 million recorded on the
issuance of the Series C Notes in the Bond Offering.
(5) EBITDA represents earnings from continuing operations before deductions
for interest, income taxes, depreciation and amortization. EBITDA for the
periods ending March 28, 1997 and June 27, 1997 is before the deduction
for stock based compensation charges, and EBITDA for the period ended
March 29, 1996 is before the deduction for restructuring costs. EBITDA is
used by management and certain investors as an indication of a company's
ability to service existing debt, to sustain potential future increases in
debt and to satisfy 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) as an indicator of operating performance
or (ii) cash flows from operating, investing and financing activities (as
determined by generally accepted accounting principles) as a measure of
liquidity. Given that EBITDA is not a measurement determined in accordance
with generally accepted accounting principles and is thus susceptible to
varying calculations, EBITDA as presented may not be comparable to other
similarly titled measures of other companies.
(6) 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 generally accepted accounting principles.
(7) Operating margin represents operating income as a percentage of revenues.
(8) Capital expenditures include additions to property and equipment, advance
rental payments to location owners and acquisitions.

26
<PAGE>

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

GENERAL

The Company's primary financial objective is to increase its EBITDA, which
is a source of funds to service indebtedness and for investment in both
continued internal growth and acquisitions. In the 1997 fiscal year and the
three months ended June 27, 1997, the Company experienced net losses. Such net
losses are attributable in part to significant non-cash charges associated
with the Company's execution of its business strategy, namely, (i) high levels
of depreciation and lease amortization expenses related to the addition of new
machines and customers and (ii) increases in goodwill amortization associated
with acquisitions accounted for under the purchase method of accounting.

The Company is principally engaged in the business of supplying outsourced
coin-operated laundry equipment services to multi-family housing properties.
The Company owns and operates approximately 415,000 coin-operated washers and
dryers in approximately 42,000 multi-family housing properties on routes
throughout the United States and 151 retail laundromats located throughout
Texas.

The Company provides outsourced coin-operated laundry equipment services to
locations by leasing laundry rooms from building owners and property
management companies, typically on a long-term, renewable basis. In return for
the exclusive right to provide these services, most of the Company's contracts
provide for commission payments to the location owners. Commission expense
(also referred to as rent expense), the Company's single largest expense item,
is included in laundry operating expenses and represents payments to location
owners. Commissions may be fixed amounts or percentages of revenues and are
generally paid monthly. Also included in laundry operating expenses are the
cost of servicing and collections in the route business, including, payroll,
parts, vehicles and other related items, the cost of sales associated with
Super Laundry Equipment Corp. ("Super Laundry") and certain expenses related
to the operation of retail laundromats.

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

Other revenue sources for the Company include (i) leasing laundry equipment
and other household appliances and electronic items to corporate relocation
entities, individuals, property owners and managers of multi-family housing
properties; (ii) operating, maintaining and servicing retail laundromats; and
(iii) constructing complete turnkey retail laundromats, retrofitting existing
retail laundromats, distributing exclusive lines of commercial coin and non-
coin machines and parts, and selling service contracts.

RESULTS OF OPERATIONS

The following table sets forth, for the periods indicated, selected
statement of operations data and EBITDA margins of the Company:

<TABLE>
<CAPTION>
THREE MONTHS
COMBINED ENDED
TWELVE MONTHS FISCAL YEAR -----------------
ENDED ENDED JUNE 28, JUNE 27,
MARCH 29, 1996 MARCH 28, 1997 1996 1997
-------------- -------------- -------- --------
<S> <C> <C> <C> <C>
Revenues...................... 100.0% 100.0% 100.0% 100.0%
Operating, general and
administrative expenses...... 71.4 69.7 70.1 69.0
Depreciation and
amortization................. 20.5 22.4 20.5 22.8
Operating income.............. 6.9 6.9 9.4 8.0
Interest expense, net......... 13.3 13.0 12.8 14.0
EBITDA margins................ 28.6 30.4 29.9 31.0
</TABLE>

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.

THREE MONTH PERIOD ENDED JUNE 27, 1997 COMPARED TO THREE MONTH PERIOD ENDED
JUNE 28, 1996

Revenues increased by approximately 50% for the three month period ended
June 27, 1997, as compared to the prior year's corresponding period. The
improvement in revenues for the three month period consisted

27
<PAGE>

primarily of increased route revenues resulting from internal expansion, the
Kwik Wash Acquisition and the Reliable Acquisition. During such three-month
period, the Company's installed base increased by approximately 5,500 machines
from internal growth (excluding the machines added from the Reliable
Acquisition) as compared to an increase of approximately 2,200 machines during
the prior year's corresponding period.

Laundry operating expenses increased by approximately 48% for the three
month period ended June 27, 1997, as compared to the prior year's
corresponding period. The increase was due primarily to an increase in laundry
operating expenses related to the Kwik Wash Acquisition and the Reliable
Acquisition. Such increase in laundry operating expenses was offset partially
by the implementation of cost savings programs in the Company's field
operations and the consolidation of certain operating regions relating to
certain acquisitions (including the Kwik Wash Acquisition) during the prior
year period.

General and administrative expenses increased by approximately $0.4 million,
for the three month period ended June 27, 1997, as compared to the prior
year's corresponding period. The increase for the period was due to various
expenses associated with (i) costs relating to the Company's acquisition
strategy, including legal and financial due diligence investigations of
potential targets and related costs, (ii) the development and implementation
of procedures for the management of investor relations, and (iii) systems
development and refinement relating to the integration of prior acquisitions.

Depreciation and amortization increased by approximately 68% for the three
month period ended June 27, 1997, as compared to the prior year's
corresponding period, due primarily to the contract rights and goodwill
associated with the Kwik Wash Acquisition and the Reliable Acquisition as well
as an increase in capital expenditures for the installed base of machines. As
a result of the Company's acquisition activity since early 1995, the Company
incurred approximately $8.7 million in non-cash depreciation and amortization
charges for the three months ended June 27, 1997 as compared to $5.8 million
for the prior year's corresponding period.

During July and September 1996, Coinmach Laundry granted nonqualified
options (the "Options") to purchase Common Stock, to certain members of
management and certain other individuals, which enable such persons to
purchase shares of Common Stock at a 15% discount to the initial offering
price of Common Stock. With respect to the Options granted to its employees,
the Company will record such discount as a stock-based compensation charge
over the applicable four year vesting period. The Company also granted options
to two of its disinterested directors (the "Independent Director Options"),
which enable such persons to purchase an aggregate of 120,000 shares of Common
Stock. The Company will record the difference between the exercise price of
the Independent Director Options and the fair market value of the Common Stock
on the date of grant as a stock-based compensation charge over the applicable
three year vesting period. For the three months ended June 27, 1997, the
Company recorded a stock-based compensation charge of approximately $145,000
relating to the Options and the Independent Director Options.

As a result of the above, operating income margins were approximately 8% for
the three month period ended June 27, 1997, as compared to approximately 9%,
for the three month period ended June 28, 1996.

Interest expense, net increased by approximately 64%, for the three month
period ended June 27, 1997, as compared to the prior year's corresponding
period, due primarily to increased interest payable under the Credit Facility
resulting from increased borrowings to fund acquisitions. Partially offsetting
this increase in interest expense was interest income earned on excess cash
balances generated from operations.

EBITDA (earnings before deductions for interest, income taxes, depreciation
and amortization) was approximately $22.4 million (before deduction for the
stock-based compensation charges) for the three months ended June 27, 1997, as
compared to approximately $14.3 million for the corresponding period in 1996,
representing an improvement of approximately 56%. EBITDA margins improved to
approximately 31.0% for the three months ended June 27, 1997, compared to
approximately 29.9% for the prior year's corresponding period.

28
<PAGE>

FISCAL YEAR ENDED MARCH 28, 1997 COMPARED TO THE TWELVE MONTH PERIOD ENDED
MARCH 29, 1996

The discussion below should be read in conjunction with the following table,
which presents a combined twelve month fiscal period, comprised of the six
month transition period ended March 29, 1996 and the period from April 5, 1995
to September 29, 1995, with the combined periods to be referred to as the
prior fiscal year (In thousands):

<TABLE>
<CAPTION>
SIX MONTH PERIOD
TRANSITION PERIOD APRIL 5, 1995 TO
YEAR ENDED ENDED MARCH 29, SEPTEMBER 29,
MARCH 28, 1997 1996 1995 COMBINED
-------------- ----------------- ---------------- --------
<S> <C> <C> <C> <C>
Revenues................ $206,852 $ 89,070 $89,719 $178,789
Laundry operating
expenses............... 139,446 60,536 62,905 123,441
General and
administrative
expenses............... 4,613 1,844 2,351 4,195
Depreciation and
amortization........... 46,316 18,212 18,423 36,635
Stock based compensation
charge................. 2,152 -- -- --
Restructuring expenses.. -- -- 2,200 2,200
-------- -------- ------- --------
Operating income
(loss)................. 14,325 8,478 3,840 12,318
Interest expense, net... 26,859 11,999 11,818 23,817
-------- -------- ------- --------
Loss before
extraordinary items and
income taxes........... (12,534) (3,521) (7,978) (11,499)
Income tax (benefit)
expense................ (2,307) (998) (1,862) (2,860)
-------- -------- ------- --------
Loss before
extraordinary items.... (10,227) (2,523) (6,116) (8,639)
Extraordinary items, net
of tax................. (296) (8,925) -- (8,925)
-------- -------- ------- --------
Net loss................ $(10,523) $(11,448) $(6,116) $(17,564)
======== ======== ======= ========
</TABLE>

Revenues increased by approximately 16% for the 1997 fiscal year as compared
to the prior fiscal year. The improvement in revenues was primarily
attributable to increased route revenues resulting from internal expansion,
the Allied Acquisition, the Kwik Wash Acquisition and an increase in revenues
from Super Laundry. During the 1997 fiscal year, the Company's installed base
increased by approximately 7,500 machines from internal growth due primarily
to the elimination of capital constraints existing at Solon prior to the 1995
merger of Solon with a predecessor of the Company (the "Merger"), as compared
to a reduction of approximately 750 machines during the twelve months ended
March 29, 1996.

Laundry operating expenses increased by approximately 13% for the 1997
fiscal year, as compared to the prior fiscal year. The increase was due
primarily to the Allied Acquisition and the Kwik Wash Acquisition as well as
an increase in the cost of sales related to Super Laundry's increased sales
volume. Such increase in laundry operating expenses was partially offset by
the implementation of cost savings programs in the Company's field operations
and the consolidation of certain operating regions.

General and administrative expenses increased slightly by approximately $0.4
million or 10% for the 1997 fiscal year as compared to the prior fiscal year.
The increase for the period was due to expenses associated with (i) costs
relating to the Company's acquisition strategy, including legal and financial
due diligence investigations of potential targets and related costs, (ii) the
development and implementation of procedures for the management of investor
relations, and (iii) systems development and refinement relating to the
integration of prior acquisitions. This increase was partially offset by a
reduction of certain expenses resulting from the consolidation of the
Company's corporate staff into its existing facility in Roslyn, New York on
September 29, 1995.

29
<PAGE>

Depreciation and amortization increased by approximately 27% for the 1997
fiscal year, as compared to the prior twelve month period, due primarily to
the Allied Acquisition and the Kwik Wash Acquisition, as well as an increase
in capital expenditures for the installed base of machines resulting from the
elimination of capital constraints existing at Solon prior to the Merger. As a
result of the Company's acquisition activity since early 1995, the Company
incurred approximately $26.8 million in non-cash purchase accounting related
depreciation and amortization charges for the 1997 fiscal year as compared to
$23.6 million for the prior twelve month period.

The Company incurred restructuring costs of approximately $2.2 million
during the twelve months ended March 29, 1996 to cover severance obligations
to certain personnel, costs to relocate certain corporate functions to Roslyn,
New York, systems integration costs, and expenses related to the consolidation
of certain of its regional offices, in each case, as a result of the April
1995 acquisition of Solon and the Merger.

The extraordinary items for the 1997 fiscal year consisted of costs related
to the extinguishment of debt in February, 1997 and the termination of the
then existing revolving credit facility. The extraordinary items for the six
month period ending March 29, 1996 consisted of costs related to the
extinguishment of debt in connection with a debt refinancing in November 1995
(the "Refinancing").

In July 1996, Coinmach Laundry issued, in privately negotiated transactions,
79,029 shares of its Class B common stock to certain members of management.
Coinmach Laundry recorded a stock-based compensation charge of approximately
$887,000 attributable to the issuance of such stock. In addition,
approximately $83,000 of receivables relating to loans to management in
connection with prior purchases of Common Stock were forgiven and have been
recorded as a stock-based compensation charge.

During the 1997 fiscal year, Coinmach Laundry recorded a stock-based
compensation charge of approximately $1,162,000 relating to the Options.

The Company's operating income margin, approximately 7% of revenues for the
1997 fiscal year, was equal to that for the twelve months ended March 29,
1996.

Interest expense, net, increased by approximately 13% for the 1997 fiscal
year as compared to the prior twelve months due primarily to the Refinancing
in November 1995 as well as entering into the Credit Agreement in January
1997. Partially offsetting this increase in interest expense was the decrease
in the effective interest rate applied against outstanding borrowings as the
result of the Refinancing, as well as interest income earned on excess cash
balances generated from operations.

EBITDA was approximately $62.8 million (before deduction for stock-based
compensation charges) for the 1997 fiscal year as compared to approximately
$51.2 million (before deduction for restructuring costs) for the prior twelve
months, representing an improvement of approximately 23%. EBITDA margins
improved to approximately 30.4% of revenues for the current year compared to
approximately 28.6% of revenues for the prior twelve months.

LIQUIDITY AND CAPITAL RESOURCES

As the Company has focused on increasing its EBITDA, it has made significant
capital investments, primarily consisting of acquisitions, renewal and growth
capital expenditures. For the twelve months ended March 29, 1996, the 1997
fiscal year and the three months ended June 27, 1997, cash flows used in
investing activities totaled approximately $39.2 million, $196.7 million and
$60.6 million, respectively. These investments have been primarily funded
through cash flows from operations and borrowings under the Credit Facility.

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The Company intends to amend and restate the Credit Facility concurrently
with the Offering. The amended and restated Credit Facility is expected to
provide $235 million of financing consisting of (i) a $35 million working
capital revolving credit facility (undrawn at closing of the Offering), (ii) a
$125 million acquisition revolving credit facility (undrawn at closing of the
Offering) and (iii) a $75 million term loan facility (fully funded at closing
of the Offering). The working capital revolving credit facility and the
acquisition revolving credit facility are expected to mature in six years, and
the term loan facility is expected to mature in seven and one-half years.
There can be no assurances, however, that the Company will amend and restate
such Credit Facility.

The Company anticipates that it will continue to utilize cash flows from
operations to finance its capital expenditures and working capital needs,
including interest payments on its outstanding indebtedness. Capital
expenditures for the three months ended June 27, 1997 were approximately $60.6
million. Of such amount, the Company spent approximately $47.6 million in
acquisition and related transaction costs, including the Reliable Acquisition,
and approximately $3.9 million related to the net increase in the installed
base of machines. The balance was used for renewal of the Company's existing
machine base and for general corporate purposes.

During the 1997 fiscal year, the Company spent $213.0 million in capital
expenditures, of which $171.5 million, or approximately 80.6%, was used for
the execution of the Company's acquisition strategy. Of the remaining capital
investment, $12.5 million, or approximately 5.8%, was used for internally
generated growth and $29.1 million, or approximately 13.6%, related primarily
to expenditures for the renewal of the Company's existing machine base. The
full impact on revenues and EBITDA generated from capital expended on
acquisitions and the net increase in the installed base are not expected to be
reflected in the Company's financial results until subsequent reporting
periods. The Company anticipates that renewal capital expenditures, which
exclude acquisitions and capital expenditures for internal growth, will be
approximately $38.0 million for the twelve months ending March 31, 1998. While
the Company estimates that it will generate sufficient cash flows from
operations to finance anticipated capital expenditures, there can be no
assurances that it will be able to do so.

On a pro forma basis, after giving effect to all route acquisitions
consummated through July 1997 as if such transactions occurred at the
beginning of such period, the Company spent $290.2 million on capital
expenditures for the 1997 fiscal year (including approximately $233.9 million
in acquisition and related transaction costs).

The Company's working capital requirements are, and are expected to 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 certain of the financing agreements governing the Company's
indebtedness, Coinmach is required to make monthly cash interest payments
under the Credit Facility and semi-annual cash interest payments on the Series
B Notes and the Series C Notes.

The Company's depreciation and amortization expenses (aggregating
approximately $46.3 million and $16.5 million for the 1997 fiscal year and the
three months ended June 27, 1997, respectively) have the effect of reducing
net income but not operating cash flow. In accordance with GAAP, 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 can have a favorable effect on
operating cash flow by reducing taxes, such treatment also reduces net income.

On October 8, 1997, Coinmach completed the private placement (the "Bond
Offering") of $100 million aggregate principal amount of its Series C Notes on
substantially identical terms as its outstanding Series B 11 3/4% Senior Notes
due 2005 (the "Series B Notes"). The issue price was 109.895%, representing a
9.94% yield to maturity. Substantially all of the proceeds of the Bond
Offering were used to reduce Coinmach's outstanding indebtedness under the
Credit Facility, including the repayment of all revolving loan and Tranche A
term loan indebtedness.

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Management believes that the Company's future operating activities will
generate sufficient cash flow to repay borrowings under the Series B Notes, the
Series C Notes and the Credit Facility or to permit any necessary refinancings
thereof. An inability of the Company, however, to comply with covenants or
other conditions contained in the indenture governing the Series B Notes (the
"Series B Indenture"), the indenture governing the Series C Notes (the "Series
C Indenture") or in the Credit Agreement could result in an acceleration of all
amounts due under the Series B Indenture, the Series C Indenture and the Credit
Agreement. 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 Credit Agreement, the Series B Indenture
or the Series C Indenture.

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.

FORWARD-LOOKING INFORMATION

This Prospectus contains or may contain certain forward looking statements
and information that are based on the beliefs of the Company's management as
well as estimates and assumptions made by, and information currently available
to, the Company's management. The words "anticipate," "believe," "estimate,"
"expect," "future," "intend," "plan" and similar expressions, as they relate to
the Company or the Company's management, identify forward looking statements.
Such statements reflect the current views of the Company with respect to future
events and are subject to certain risks, uncertainties and assumptions relating
to the Company's operations and results of operations, competitive factors,
shifts in market demand, and other risks and uncertainties, including, in
addition to any uncertainties specifically identified in the text surrounding
such statements, uncertainties with respect to changes or developments in
social, economic, business, industry, market, legal and regulatory
circumstances and conditions and actions taken or omitted to be taken by third
parties, including the Company's stockholders, customers, suppliers,
competitors, legislative, regulatory, judicial and other governmental
authorities. Should one or more of these risks or uncertainties materialize, or
should the underlying assumptions prove incorrect, actual results may vary
significantly from those anticipated, believed, estimated, expected, intended
or planned.

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BUSINESS

OVERVIEW

The Company, established in 1947, is the leading supplier of outsourced
coin-operated laundry equipment services for multi-family housing properties
in the United States. The Company's business involves leasing laundry rooms
from building owners and property management companies, installing and
servicing the laundry equipment and collecting revenues generated from laundry
machines. The Company owns and operates approximately 415,000 coin-operated
washers and dryers in approximately 42,000 locations on routes throughout the
United States and in 151 retail laundromats located throughout Texas.

As a result of this strategy of growth, the Company's revenues and EBITDA
have grown from $72.9 million and $13.6 million, respectively, on a historical
basis for the twelve months ended March 31, 1995, to $306.9 million and $97.8
million (before deducting non-cash stock based compensation charges),
respectively, for the 1997 fiscal year, on a pro forma basis, giving effect to
the acquisitions consummated by the Company since March 30, 1996.

BUSINESS STRATEGY

The Company's business strategy is to enhance its position as the largest
provider of outsourced coin-operated laundry equipment services in the United
States. Management intends to continue to grow the Company's installed machine
base both internally and through selective acquisitions to achieve benefits of
scale, increase its operating efficiencies and improve its financial
performance. Internal growth is comprised of: (i) adding new customers in
existing regions and securing contracts for additional locations from current
customers, (ii) converting owner-operated facilities to Company managed
facilities, (iii) improving the net contribution per machine through operating
efficiencies and selective price increases, and (iv) pursuing additional
growth opportunities presented by the Company's leading market position and
access to approximately four million individual housing units. The Company's
acquisition strategy is to continue to selectively acquire local, regional and
multi-regional route businesses from independent operators at attractive
prices. The Company is currently evaluating several acquisition opportunities,
however, there can be no assurance that, subsequent to ongoing negotiations
and due diligence reviews, the Company will complete any such acquisitions.

An important element of the Company's business strategy is to continue to
expand its geographic presence to gain additional regional and multi-regional
account opportunities with large multi-family housing property managers and
owners. Management believes that a significant portion its customer base,
which manages multi-family housing and other residential properties, is
consolidating. Consequently, management believes that opportunities for
outsourcing coin-operated laundry equipment services to professionally
managed, multi-regional, well-capitalized independent operators such as the
Company are increasing.

The Company's business strategy also includes the continued development of
the Integrated Computer Systems which management believes are the most
advanced in the industry. The Integrated Computer Systems provide real-time
operational and competitive data, which in conjunction with the Company's
multi-regional service capabilities, enhance the Company's operating
efficiencies throughout

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its regions and enable the Company to deliver superior customer service. The
Integrated Computer systems also provide the Company with the flexibility to
integrate acquisitions on a timely basis, including key functions such as
sales, service, collections and security. Finally, as the industry leader, the
Company works closely with its equipment vendors to assess ongoing
technological changes and implements those which the Company believes are
beneficial to operating efficiencies and financial performance.

GROWTH STRATEGY

The Company's growth strategy is to increase operating cash flow and
profitability through a combination of internal expansion and acquisitions.

Internal Expansion. Internal expansion is comprised of: (i) increasing the
installed machine base by adding new customers and increasing the number of
locations with existing customers, (ii) converting owner-operated facilities
to Company managed facilities, (iii) improving the net contribution per
machine through operating efficiencies and selective price increases, and (iv)
pursuing additional growth opportunities presented by its leading market
position and access to approximately four million individual housing units.

New Customers and Locations. The Company's 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 services providers are near expiration. The
Company's Integrated Computer Systems track information on the lease
expirations of its competitors. The Company believes that its leading
market position and expanding geographic presence, primarily achieved
through acquisitions, enhances its ability to gain new customers and
additional locations from its existing customers.

Conversions. Management believes that there are approximately 1.0 million
machines installed in locations which continue to be 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, the Company pursues building owners and managers
who will contract with the Company to outsource their coin-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.

Operating Efficiencies and Price Increases. The Company focuses on
improving its net contribution per machine through achieving operating
efficiencies and selective price increases. Due to factors beyond the
Company's control, however, there can be no assurance that such efficiency
or price increases will occur.

Other Growth Opportunities. While management intends to continue its
focus on increasing its installed machine base, management believes that
its leading market position and its access to over four million housing
units provides the Company with additional growth and diversification
opportunities. These opportunities include laundry equipment rental as well
as other route based facilities management services. In addition, the
Company is discussing the formation of strategic alliances with vendors of
products complimentary to its customer base. See "--Other Operations."

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. Such growth, however,
will be dependent upon a number of factors beyond the Company's control, such
as the Company's ability to secure new contracts from owner-operators on
commercially favorable terms and competitive forces that may reduce the number
of opportunities to secure new locations or to effect price increases.

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Acquisitions. The Company intends to continue to capitalize on opportunities
within the fragmented coin-operated laundry equipment services industry
through selective acquisitions of additional route businesses. It has been the
Company's experience that there are numerous private, family-owned businesses
that often 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 existing contracts. Consequently, such independent operators,
especially those which are undergoing generational ownership changes,
represent potential acquisition opportunities for the Company. See "The
Company--Acquisitions."

Management believes the Company is well positioned to capitalize on
acquisition opportunities 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 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 potential operating
efficiencies and cost savings. The Company considers three types of
acquisition candidates: (i) small, local route 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
eliminating most of the target's existing cost structure through the
complete absorption of its machine base into the Company's operations. The
Company's experience has been that the acquisition of local route operators
has increased operating leverage within its operating regions. In many
instances, the Company is able to acquire routes adjacent to its existing
areas of operation without incurring significant incremental operating
costs.

Regional route operators. The Company's acquisition of regional route
operators provides opportunities to improve its cash flow by eliminating
duplicative corporate and administrative functions, reducing capital
expenditures through improved purchasing power and implementing the
Company's Integrated Computer Systems. Since April 1, 1996, the Company has
completed the Allied Acquisition, the Reliable Acquisition and the National
Coin Acquisition. The Allied Acquisition has been substantially integrated
and, in addition to improving the Company's cash flow, has allowed the
Company to establish a larger market presence in the Mid-West. Management
expects to integrate substantially all of the operations formerly conducted
by the Reliable Entities and the NCL Entities into the Company's operations
during 1997 and to achieve targeted cost savings as a result of such
integration.

Multi-regional route operators. Management believes that the acquisition
of a large, multi-regional route operator results 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 usually results in
reduced per unit capital expenditures. As is the case with all
acquisitions, the Company's Integrated Computer System is utilized to
provide further operating efficiencies and related cost savings. Kwik Wash
is an example of a multi-regional acquisition which enabled the Company to
substantially increase its operating base, add several experienced regional
managers, penetrate new markets and, along with the aforementioned regional
acquisitions, become the largest industry participant.

As part of the Company's growth strategy, the Company continues to evaluate
acquisition opportunities. There can be no assurance however that, subsequent
to ongoing negotiations and due diligence reviews, the Company will complete
any such acquisitions.

FINANCIAL CHARACTERISTICS OF THE BUSINESS

The Company's business has the following financial characteristics:

Recurring Revenues. The Company derives a majority of its revenues from
outsourced coin-operated laundry equipment services typically performed under
long-term contracts with landlords,

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property management companies and owners of rental apartment buildings,
condominiums and cooperatives, university and institutional housing and other
multi-family housing properties. Management estimates that approximately 90%
of its locations are subject to long-term contracts with initial terms of
three to ten years, most of which have automatic renewal or right of first
refusal provisions. During the 1997 fiscal year, the Company retained
approximately 97% of its existing machine base. The Company believes that its
ability to retain its customers and machine base is attributable to a number
of factors, including the Company's national reputation for superior service,
the structure of its contracts and the strength of its long-term customer
relationships.

Leverageable Cash Flows. Due to the stable, recurring nature of the
Company's revenues and its consistent EBITDA levels, the Company has been able
to obtain debt financing on favorable terms to support its acquisition
strategy. This use of debt financing to support growth is an important
component of the Company's financial strategy, and the Company believes that
access to both the public and private debt markets provides it with a
competitive advantage.

Benefits of Scale. By increasing its installed machine base, the Company has
benefited from economies of scale in both operating costs and purchasing
power. The Company is able to leverage its existing infrastructure, including
its sales, service, collections, security and corporate overhead, over a
larger installed machine base than its competition. As a result, the Company
has been able to improve its EBITDA margin as it has increased its size. For
the twelve months ended March 29, 1996, the 1997 fiscal year and the three
months ended June 27, 1997, the Company's EBITDA margins were 28.6%, 30.4% and
31.0%, respectively. Furthermore, due to its purchasing power, management
believes that the Company is able to purchase equipment on terms more
favorable than those available to smaller industry participants.

Significant Portion of Capital Investment Related to Growth. During the 1997
fiscal year, the Company spent $213.0 million in capital expenditures, of
which $171.5, or approximately 80.6%, was used to finance acquisitions as part
of the Company's growth strategy. Of the remaining capital investment, $12.5
million, or approximately 5.8%, was used for internally generated growth and
$29.1 million, or approximately 13.6%, related to the renewal of the Company's
existing machine base.

INDUSTRY

The coin-operated laundry equipment services industry is characterized by
stable cash flows generated by long-term, renewable lease contracts with
multi-family property owners and management companies. The industry is highly
fragmented, 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
consists of over 280 independent operators. Based upon industry estimates,
management believes there are approximately 3.5 million installed machines in
multi-family properties throughout the United States, approximately 2.5
million of which have been outsourced to independent operators such as the
Company and approximately 1.0 million of which continue to be operated by the
owners of such locations.

The industry is highly capital intensive and customers require prompt and
reliable service. The majority of capital costs are incurred upon procurement
of new leases. 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, since machines operate throughout
the term of the contract under which they are installed if serviced properly,
and variable costs are paid out of revenues collected from the machines.

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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 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.

OPERATIONS

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

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. Sales personnel must be proficient with the
application of sophisticated financial analyses which calculate minimum
returns on investment to achieve the Company's targeted goals in securing
location contracts and renewals. Management believes that its sales staff is
among the most competent and effective in the industry.

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.
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 new and renewal 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.

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 property 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 to the
location owner in addition to commissions. The Company's leases typically
include provisions that allow for unrestricted price increases, a 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 revenues from a lease. 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 advance rental payments.
The Company evaluates each lease opportunity through its Integrated Computer
Systems which is designed to achieve certain targeted levels of return on
investment.

Management estimates that approximately 90% of its locations are under long-
term leases with initial terms of three to ten years. Of the remaining
locations not subject to long term leases, the Company

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believes that it has retained a majority of such customers through long-
standing relationships and intends to continue to service such customers.
Approximately 42% of the Company's leases renew automatically, and the Company
has a right of first refusal on termination in approximately 40% 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 June 27, 1997, the Company's leases have an average
remaining life to maturity of approximately 50 months (without giving effect
to automatic renewals).

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 352 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 2,200 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
service areas. These operations coordinate the Company's radio-equipped
service vehicles that allow the Company to address customer needs quickly and
efficiently.

Information Management. Management believes that the Company's Integrated
Computer Systems serve three major functions: (i) tracking the service cycle
of equipment; (ii) monitoring revenues and costs by location, customer and
salesperson, and (iii) providing information on competitor's lease renewal
schedules.

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. 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. Management is able to obtain daily, monthly, quarterly and annual
reports on location performance, coin collection, service and sales activity
by salesperson.

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.

Management also believes that the Integrated Computer Systems enhance the
Company's ability to successfully integrate acquired businesses into its
existing operations. It has been the experience of the Company's management
that regional or muti-regional acquisitions can be integrated within 90 to 120
days, while a local acquisition can be integrated almost immediately.

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. Remanufactured machines are
restored to virtually new condition with the same estimated average life and
service requirements as new

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machines. Machines that can no longer be remanufactured are added to the
Company's inventory of spare parts.

The Company maintains four regional remanufacturing facilities which provide
for consistent machine quality and efficient operations and are strategically
located to service each of its operating regions.

Collection Security. Management believes that it provides the highest level
of collection 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 enforces
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.

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. The other large multiple region operators are Web Service
Company, Inc. and Macke Laundry Service, L.P.

OTHER OPERATIONS

In addition to supplying outsourced coin-operated laundry equipment
services, the Company has expanded its breadth of operations to other, related
lines of business:

Individual Housing Units. Through the acquisition of Appliance Warehouse,
the Company entered the business of renting laundry equipment and other
household appliances and electronic items to individuals. With access to
approximately four million individual housing units, the Company believes its
new business line represents an opportunity for growth in a new market segment
which is complementary to its core business.

Laundromat Construction. Super Laundry, a wholly owned subsidiary of
Coinmach, is a laundromat construction and 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 operated machines and parts,
and selling service contracts. Super Laundry's customers generally enter into
sales contracts pursuant to which Super Laundry constructs and equips a
complete laundromat operation, including location identification,
construction, plumbing, electrical wiring and all required permits.

Retail Laundromat Operations. The Company operates 151 retail laundromats
located throughout Texas, 150 of which were acquired in the Kwik Wash
Acquisition. The operation of the retail laundromats involves leasing store
locations in desired geographic areas, maintaining an appropriate mix of
washers and dryers at each store location and servicing such washers and
dryers at such locations. The Company is also responsible for maintaining the
premises at each laundromat and paying for utilities and related expenses.

FACILITIES

As of August 1, 1997, the Company leases 38 offices throughout its operating
regions serving various operational purposes, including sales and service
activities, collections and warehousing. The Company presently maintains its
headquarters in Roslyn, New York, leasing approximately 40,000 square feet
pursuant to a five year lease terminating April 30, 2001. The Company's Roslyn
facility is used for general

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corporate purposes, as well as for remanufacturing and warehouse space for the
Northeast operating region. The Company has an option to purchase the Roslyn
facility, which it presently does not intend to exercise.

EMPLOYEES

As of August 1, 1997, the Company employed 1,411 full-time employees
(including 334 laundromat attendants in the Company's retail laundromats in
Texas). Approximately 140 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.

LEGAL PROCEEDINGS

The Company and its predecessors have been named as defendants 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.

40
<PAGE>

MANAGEMENT

EXECUTIVE OFFICERS AND DIRECTORS

The executive officers and directors of Coinmach Laundry are:

<TABLE>
<CAPTION>
NAME AGE TITLE
---- --- -----
<S> <C> <C>
Stephen R. Kerrigan........... 44 Chairman of the Board and Chief Executive
Officer, Director
Mitchell Blatt................ 46 President, Chief Operating Officer,
Director
Robert M. Doyle............... 40 Chief Financial Officer, Senior Vice
President, Treasurer, Secretary
John E. Denson................ 60 Senior Vice President--Corporate
Development
Michael E. Stanky............. 46 Senior Vice President
Bruce V. Rauner............... 41 Director
David A. Donnini.............. 32 Director
James N. Chapman.............. 35 Director
Dr. Arthur B. Laffer.......... 57 Director
Stephen G. Cerri.............. 61 Director
</TABLE>

BACKGROUND AND EXPERIENCE

Mr. Kerrigan has been Chief Executive Officer of Coinmach Laundry since
April 1996 and of Coinmach since November 1995. Mr. Kerrigan was President and
Treasurer of Solon and Coinmach Laundry from April 1995 until April 1996, and
Chief Executive Officer of The Coinmach Corporation ("TCC"), a predecessor of
Coinmach, from January 1995 until November 1995. Mr. Kerrigan has been a
director and Chairman of the Board of Coinmach Laundry since April 1995 and of
Coinmach since November 1995. Mr. Kerrigan was a director of TCC from January
1995 to November 1995 and a director of Solon from April 1995 to November
1995. Mr. Kerrigan served as Vice President and Chief Financial Officer of
TCC's predecessor, Coinmach Industries 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 Coinmach Laundry
since April 1996 and of Coinmach since November 1995. Mr. Blatt was the
President and Chief Operating Officer of TCC from January 1995 to November
1995. Mr. Blatt has been a director of Coinmach Laundry and Coinmach since
November 1995. Mr. Blatt joined TCC 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, Treasurer
and Secretary of Coinmach Laundry since April 1996 and of Coinmach since
November 1995. Mr. Doyle has been a director of Coinmach since November 1995.
Mr. Doyle served as Vice President, Treasurer and Secretary of TCC from
January 1995 to November 1995. Mr. Doyle joined Coinmach's predecessor in 1987
as Controller. In 1988, Mr. Doyle 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 Coinmach Laundry since April
1996 and of Coinmach since November 1995. Mr. Denson was Senior Vice
President, Finance of Solon from June 1987 until November 1995. Mr. Denson
served as an officer of Solon under various titles since 1973, and served as a
director and Co-Chief Executive Officer of Solon from November 1994 to April
1995.

41
<PAGE>

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

Mr. Rauner has been a director of Coinmach Laundry since April 1995. Mr.
Rauner was a director of Coinmach from November 1995 to November 1996 and a
director of TCC from January 1995 to November 1995. Mr. Rauner has been a
Principal of GTCR since 1981. Mr. Rauner serves as a director of COREStaff,
Inc., Esquire Communications Ltd., Lason Systems, Inc., and Polymer Group,
Inc.

Mr. Donnini has been a director of Coinmach Laundry since April 1995. Mr.
Donnini was a director of Coinmach from November 1995 to November 1996 and a
director of TCC from January 1995 to November 1995. Mr. Donnini has been a
Principal of GTCR since 1993. From 1991 to 1993, Mr. Donnini was an Associate
with GTCR. Mr. Donnini serves as a director of Polymer Group, Inc.,
International Computer Graphics, Inc., U.S. Aggregates, Inc., Keystone Group
Holdings, Inc., Dickson Media, Inc. and Cherrydale Farms, Inc.

Mr. Chapman has been a director of Coinmach Laundry since April 1995. Mr.
Chapman is presently Vice President--Investment Banking with The Renco Group,
Inc., a financial services company. Mr. Chapman was a Principal of Fieldstone
Private Capital Group, L.P. a private holding company, from its inception in
1990 to May 1996. Mr. Chapman was a director of Coinmach from November 1995 to
November 1996 and a director of TCC from January 1995 to November 1995.

Dr. Laffer has been a director of Coinmach Laundry since September 1996. Dr.
Laffer is a director of Mastec, Inc., Nicholas Applegate Mutual Funds,
Nicholas Applegate Growth Equity Funds, Casmyn, Inc. and United States Filter
Corporation. Dr. Laffer has been Chairman and Chief Executive Officer of A.B.
Laffer, V.A. Canto & Associates, an economic consulting firm, since 1979,
Chief Executive Officer of Calport Asset Management, Inc., a money management
firm, since 1992 and Chief Executive Officer of Laffer Advisors, Inc., a
registered broker-dealer and investment advisor since 1985.

Mr. Cerri has been a director of Coinmach Laundry since September 1996. Mr.
Cerri has been Chairman and Chief Executive Officer of Alinabal Holdings
Corporation, manufacturer of electro-mechanical and mechanical products, since
November 1987 and a consultant with Capstone Management Resources, Inc., a
firm which provides consulting services to clientele involved in leverage
transactions.

The Board consists of seven members and is divided into three classes of
directors. Each class of directors is elected to serve for a term of three
years, so that the term of office of approximately one-third of the directors
will expire each year. 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. All executive officers serve at the discretion of the Board. There
are no family relationships between any of the directors or executive officers
of the Company.

42
<PAGE>

PRINCIPAL AND SELLING STOCKHOLDERS

The following table sets forth information known to the Company with respect
to the beneficial ownership of the Common Stock as of October 10, 1997, and as
adjusted to reflect the sale of Common Stock offered hereby, by (i) each
person or entity who is known by the Company to own beneficially more than 5%
of the Common Stock; (ii) each of Coinmach Laundry's directors; (iii) the
Chief Executive Officer and each of the three other most highly compensated
current executive officers of Coinmach Laundry; (iv) all current directors and
executive officers as a group; and (v) each Selling Stockholder. Except as
indicated in the footnotes to the table, the persons and entities named in the
table have sole voting and investment power with respect to all shares of
Common Stock which they respectively beneficially owned.

<TABLE>
<CAPTION>
SHARES SHARES
BENEFICIALLY BENEFICIALLY
OWNED PRIOR TO NUMBER OF OWNED AFTER
OFFERING(1) SHARES OFFERING(1)
--------------------- BEING -----------------
NAME AND ADDRESS NUMBER PERCENT OFFERED(2) NUMBER PERCENT
---------------- --------- ------- ---------- --------- -------
<S> <C> <C> <C> <C> <C>
DIRECTORS, OFFICERS AND 5%
STOCKHOLDERS
Golder, Thoma, Cressey,... 4,556,114(3) 45.5% 1,064,060 3,492,054 27.64%
Rauner, Fund IV, L.P.
6100 Sears Tower
Chicago, IL 60606
MCS Capital, Inc.......... 566,010(4) 5.7% -- -- --
c/o Coinmach Corporation
521 East Morehead,
Suite 590
Charlotte, NC 28202
Janus Capital Corpora-
tion..................... 527,800(5) 5.3% -- -- --
100 Fillmore Street
Denver, Colorado
80206-4923
Thomas H. Bailey.......... 527,800(6) 5.3% -- -- --
100 Fillmore Street
Denver, Colorado
80206-4923
Stephen R. Kerrigan....... 566,010(7) 5.7% -- -- --
Mitchell Blatt............ 456,313(8) 4.6% -- -- --
Robert M. Doyle........... 157,964(9) 1.6% -- -- --
Michael E. Stanky......... 108,284(10) 1.1% -- -- --
John E. Denson............ 11,503(11) * -- -- --
Bruce J. Rauner........... 4,556,114(12) 45.5% 1,064,060 3,492,054 27.64%
David A. Donnini.......... 4,556,114(12) 45.5% 1,064,060 3,492,054 27.64%
James N. Chapman.......... 30,386(13) * 7,097 23,289 *
Arthur B. Laffer.......... 30,000(14) * 7,006 22,994 *
Stephen G. Cerri.......... 30,000(14) * 7,006 22,994 *
All Officers and Directors
as a group (10 persons).. 5,946,574(15) 59.4%
OTHER SELLING STOCKHOLDERS
Jackson National Life
Insurance Company........ 240,324(16) -- 56,126 184,198 1.46%
Heller Financial, Inc. 240,324(16) -- 56,126 184,198 1.46%
President and Fellows of
Harvard College.......... 151,860(17) 1.5% 35,466 116,394 .92%
Michael Marrus............ 25,974(18) * 6,066 19,908 *
S.A. Spencer and Mary M.
Spencer.................. 24,297(19) 2.4% 5,674 18,623 *
Ronald S. Brody........... 23,006(20) * 5,378 17,633 *
</TABLE>

43
<PAGE>

- --------
* Percentage of shares beneficially owned does not exceed 1% of Common Stock
outstanding.
(1) Share percentage ownership is rounded to nearest tenth of 1% and reflects
the effect of dilution as a result of outstanding options to the extent
such options are, or within 60 days will become, exercisable. Shares of
Common Stock underlying any option which was exercisable on October 10,
1997 or becomes exercisable within the next 60 days ("Presently
Exercisable Options") are deemed outstanding only for purposes of
computing the share ownership and share ownership percentage of the
holder of such option. The number of shares of Common Stock deemed
outstanding prior to this Offering includes 10,004,278 shares of Common
Stock outstanding as of October 10, 1997 and shares of Common Stock
issuable pursuant to Presently Exercisable Options held by the respective
person or group as set forth below. The number of shares of Common Stock
deemed outstanding after this Offering is comprised of the sum of (i) the
outstanding shares of Common Stock immediately prior to the Offering in
an amount equal to 10,004,278, (ii) 2,500,000 shares of Common Stock
being offered for sale by the Company in the Offering, plus (iii) 20,046
shares of Common Stock to be issued to certain Selling Stockholders upon
the exercise of options in connection with the Offering and (iv) 116,074
shares of Common Stock to be issued to certain Selling Stockholders upon
conversion of Non-Voting Common Stock into Common Stock in connection
with the Offering. Beneficial ownership is determined in accordance with
the rules of the Securities and Exchange Commission that deem shares to
be beneficially owned by any person who has or shares voting or
investment power with respect to such shares. Presently Exercisable
Options are deemed to be outstanding and to be beneficially owned by the
person or group holding such options for the purpose of computing the
percentage ownership of such person or group, but are not treated as
outstanding for the purpose of computing the percentage ownership of any
other person or group.
(2) Does not include approximately 562,500 shares of Common Stock to be sold
in the Offering by Selling Stockholders and certain other stockholders of
Coinmach Laundry if the Underwriters' over-allotment option is exercised
in full, of which 21,343 shares of Common Stock would be sold by certain
members of management not named in the table above.
(3) If the Underwriters' over-allotment option is exercised in full, GTCR
will sell approximately an additional 239,322 shares of Common Stock in
the Offering.
(4) Includes shares underlying Presently Exercisable Options to purchase an
aggregate of 123,241 shares of Common Stock at an exercise price of
$11.90 per share. Does not include shares underlying options to purchase
an aggregate of 184,857 shares of Common Stock at an exercise price of
$11.90 per share, which options are not Presently Exercisable Options. If
the Underwriters' over-allotment option is exercised in full, MCS
Capital, Inc. will sell approximately 113,202 shares of Common Stock in
the Offering.
(5) The shares are owned beneficially by Janus Capital Corporation ("Janus"),
as a result of its role as investment adviser and sub-adviser to
investment companies registered under Section 8 of the Investment Company
Act of 1940 and individual and institutional clients.
(6) The shares are owned beneficially by Janus. Mr. Bailey is the President,
Chairman of the Board and a stockholder of Janus.
(7) The shares are owned beneficially by MCS, a corporation controlled by Mr.
Kerrigan. Includes shares underlying Presently Exercisable Options held
by MCS to purchase an aggregate of 123,241 shares of Common Stock at an
exercise price of $11.90 per share. Does not include shares underlying
options held by MCS to purchase an aggregate of 184,857 shares of Common
Stock at an exercise price of $11.90 per share, which options are not
Presently Exercisable Options. If the Underwriters' over-allotment option
is exercised in full, Mr. Kerrigan will sell approximately 113,202 shares
of Common Stock in the Offering. Mr. Kerrigan also holds options to
purchase approximately 184,857 shares of Common Stock, which options are
not Presently Exercisable Options.
(8) Includes shares underlying Presently Exercisable Options to purchase an
aggregate of 20,000 shares of Common Stock at an exercise price of $11.90
per share and 40,000 shares of Common Stock at an exercise price of
$14.00 per share. Does not include shares underlying options to purchase
an aggregate of 80,000 shares of Common Stock at an exercise price of
$11.90 per share and 60,000 shares of Common Stock at an exercise price
of $14.00 per share, which options are not Presently Exercisable Options.
If the Underwriters' over-allotment option is exercised in full, Mr.
Blatt will sell approximately 91,263 shares of Common Stock in the
Offering. Mr. Blatt also holds options to purchase approximately 140,000
shares of Common Stock, which options are not Presently Exercisable
Options.
(9) Includes shares underlying Presently Exercisable Options to purchase an
aggregate of 48,756 shares of Common Stock at an exercise price of $11.90
per share. Does not include shares underlying options to purchase an
aggregate of 123,134 shares of Common Stock at an exercise price of
$11.90 per share, which options are not Presently Exercisable Options. If
the Underwriters' over-allotment option is exercised in full, Mr. Doyle
will sell approximately 31,593 shares of Common Stock in the Offering.
Mr. Doyle also holds options to purchase approximately 123,134 shares of
Common Stock, which options are not Presently Exercisable Options.
(10) Includes shares underlying Presently Exercisable Options to purchase an
aggregate of 41,409 shares of Common Stock at an exercise price of $11.90
per share and 20,000 shares of Common Stock at an exercise price of
$14.00 per share. Does not include shares underlying options to purchase
an aggregate of 62,112 shares of Common Stock at an exercise price of
$11.90 per share and 30,000 shares of Common Stock at an exercise price
of $14.00 per share, which options are not Presently Exercisable Options.
If the Underwriters' over-allotment option is exercised in full, Mr.
Stanky will sell approximately 21,657 shares of Common Stock in the
Offering. Mr. Stanky also holds options to purchase approximately 62,112
shares of Common Stock, which options are not Presently Exercisable
Options.
(11) Represents shares underlying Presently Exercisable Options to purchase an
aggregate of 11,503 shares of Common Stock at an exercise price of $11.90
per share. Does not include shares underlying options to purchase an
aggregate of 17,253 shares of Common Stock at an exercise price of $11.90
per share, which options are not Presently Exercisable Options. If the
Underwriters' over-allotment option is exercised in full, Mr. Denson will
sell approximately 2,301 shares of Common Stock in the Offering. Mr.
Denson also holds options to purchase approximately 17,253 shares of
Common Stock, which options are not Presently Exercisable Options.
(12) All such shares are held by GTCR, of which GTCR IV, L.P. ("GTCR IV"), is
the general partner. Mr. Rauner and Mr. Donnini are principals of Golder,
Thoma, Cressey, Rauner, Inc., the general partner of GTCR IV. Mr. Rauner
and Mr. Donnini each disclaim beneficial ownership of such shares. If the
Underwriters' over-allotment option is exercised in full, GTCR will sell
approximately an additional 239,322 shares of Common Stock in the
Offering.
(13) Includes shares underlying Presently Exercisable Options to purchase an
aggregate of 11,503 shares of Common Stock at an exercise price of $11.90
per share. Does not include shares underlying options to purchase an
aggregate of 17,253 shares of Common Stock at an exercise price of $11.90
per share, which options are not Presently Exercisable Options. If the
Underwriters' over-allotment option is exercised in full, Mr. Chapman
will sell approximately an additional 1,596 shares of Common Stock in the
Offering.
(14) Represents shares underlying Presently Exercisable Options to purchase an
aggregate of 30,000 shares of Common Stock at an exercise price of $14.00
per share. Does not include shares underlying options to purchase an
aggregate of 30,000 shares of Common Stock at an exercise price of $14.00
per share, which options are not Presently Exercisable Options. If the
Underwriters' over-allotment option is exercised in full, Messrs. Laffer
and Cerri will each sell approximately an additional 1,576 shares of
Common Stock in the Offering.

44
<PAGE>

(15) In calculating the shares beneficially owned by executive officers and
directors as a group, (i) 4,556,114 shares of Common Stock owned by GTCR
and included in the beneficial ownership amounts of each of Messrs.
Rauner and Donnini, and (ii) 566,010 shares of Common Stock owned by MCS
and included in the beneficial ownership amount of Mr. Kerrigan, in each
case as set forth in the table above, are included only once. In
calculating the percentage of shares owned by executive officers and
directors as a group, the shares of Common Stock underlying all options
which are beneficially owned by executive officers and directors and
which are Presently Exercisable Options are deemed outstanding.
(16) Represents shares of Non-Voting Common Stock (which are convertible on a
share-for-share basis into shares of Common Stock), of which upon
conversion 58,037 shares of Common Stock will be sold in the Offering if
the Underwriters' over-allotment option is exercised in full.
(17) If the Underwriters' over-allotment option is exercised in full,
President and Fellows of Harvard College will sell approximately an
additional 7,977 shares of Common Stock in the Offering.
(18) Includes shares underlying Presently Exercisable Options to purchase an
aggregate of 11,503 shares of Common Stock at an exercise price of $11.90
per share. Does not include shares underlying options to purchase an
aggregate of 17,253 shares of Common Stock at an exercise price of $11.90
per share, which options are not Presently Exercisable Options. If the
Underwriters' over-allotment option is exercised in full, Mr. Marrus will
sell approximately an additional 1,384 shares of Common Stock in the
Offering.
(19) If the Underwriters' over-allotment option is exercised in full, S.A.
Spencer and Mary M. Spencer, JT-TEN will sell approximately an additional
1,276 shares of Common Stock in the Offering.
(20) Includes shares underlying Presently Exercisable Options to purchase an
aggregate of 23,006 shares of Common Stock at an exercise price of $11.90
per share. Does not include shares underlying options to purchase an
aggregate of 34,506 shares of Common Stock at an exercise price of $11.90
per share, which options are not Presently Exercisable Options. If the
Underwriters' over-allotment option is exercised in full, Mr. Brody will
sell approximately an additional 1,208 shares of Common Stock in the
Offering.

45
<PAGE>

DESCRIPTION OF CAPITAL STOCK

The following statements are brief summaries of certain provisions relating
to Coinmach Laundry's capital stock and are qualified in their entirety by
reference to the provisions of Coinmach Laundry's Third Amended and Restated
Certificate of Incorporation and Second Amended and Restated By-Laws, each of
which have been filed with the Commission.

Coinmach Laundry's authorized capital stock consists of 15,000,000 shares of
Common Stock, 1,000,000 shares of Class B Common Stock, par value $.01 per
share ("Non-Voting Common Stock") and 1,000,000 shares of preferred stock, par
value $.01 per share ("Preferred Stock"). As of October 13, 1997, there were
10,004,278 shares of Common Stock, 480,648 shares of Non-Voting Common Stock
and no shares of Preferred Stock outstanding. Upon consummation of the
Offering, there will be 13,004,972 shares of Common Stock outstanding.

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

Shares of Common Stock are not redeemable, and holders thereof have no
preemptive or conversion rights nor do holders have any subscription rights to
purchase any securities of the Company. There are no redemption or sinking
fund provisions applicable to the Common Stock. All shares of Common Stock are
fully paid and non-assessable and all shares of Common Stock to be offered by
the Company hereby, when issued, will be fully paid and non-assessable.

In the event of liquidation, dissolution or winding up of Coinmach Laundry,
the holders of Common Stock are entitled to receive, after payment of Coinmach
Laundry's debts and liabilities, the remaining assets of Coinmach Laundry 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 Common Stock is listed for quotation on The Nasdaq National Market under
the trading symbol "WDRY." The transfer agent and registrar for the Common
Stock is The Bank of New York.

DESCRIPTION OF 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 restrictions on ownership,
voting and conversion, the Non-Voting Common Stock is substantially similar to
the Common Stock.

PAYMENT OF DIVIDENDS ON COMMON STOCK AND NON-VOTING 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.

DESCRIPTION OF PREFERRED STOCK

In accordance with the provisions of the Company's Third Amended and
Restated Certificate of Incorporation, the Board may, without further action
by Coinmach Laundry's stockholders, from time to

46
<PAGE>

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 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 may be entitled to receive a
preference payment in the event of any liquidation, dissolution or winding-up
of Coinmach Laundry 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 Coinmach Laundry's securities or the
removal of incumbent management. The Board, without stockholder approval, may
issue shares of Preferred Stock with voting and/or conversion rights which
could adversely affect the holders of Common Stock and Non-Voting Common Stock.

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

The Third Amended and Restated Certificate of Incorporation and the Second
Amended and Restated Bylaws 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 provides that the
Board be divided into three classes, with each class 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 Coinmach Laundry. 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 Coinmach Laundry, these provisions could also
make it more difficult for existing stockholders or another party to effect a
change in management.

The Third Amended and Restated Certificate of Incorporation requires that any
action required or permitted to be taken by Coinmach Laundry'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 requires that special meetings of the stockholders of Coinmach
Laundry be called by the Chairman of the Board, the president 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 provides 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 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 specifies certain

47
<PAGE>

requirements for a stockholder's notice to be in proper written form. These
provisions 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.

CERTAIN STATUTORY PROVISIONS

Coinmach Laundry is subject to Section 203 of the Delaware General
Corporation Law, which prohibits certain transactions between a Delaware
corporation and an "interested stockholder," which is defined as a person who,
together with any affiliates and/or associates of such person, beneficially
owns, directly or indirectly, 15 percent or more of the outstanding voting
shares of a Delaware corporation. This provisions prohibits certain business
combinations (defined broadly to include mergers, consolidations, sales or
other dispositions of assets having an aggregate value in excess of 10 percent
of the consolidated assets of the corporation, and certain transactions that
would increase the interested stockholder's proportionate share ownership in
the corporation) between an interested stockholder and a corporation for a
period of three years after the date the interested stockholder acquired its
stock, unless (i) the business combination or the transaction resulting in the
person becoming an interested stockholder is approved by the corporation's
board of directors prior to the date the interested stockholder acquired
shares; (ii) the interested stockholder acquired at least 85 percent of the
voting stock of the corporation in the transaction in which it became an
interested stockholder; or (iii) the business combination is approved by a
majority of the board of directors and by the affirmative vote of two-thirds of
the votes entitled to be cast by disinterested stockholders at an annual or
special meeting. 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."

48
<PAGE>

SHARES ELIGIBLE FOR FUTURE SALE

Upon the closing of the Offering, there will be 12,640,398 shares of Common
Stock and 364,574 shares of Non-Voting Common Stock outstanding prior to
giving effect to the exercise of the options granted by the Company and not
exercised in connection with the Offering. The 3,750,000 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, 5,462,205 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
90 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 one year 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 (125,043 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 two years is entitled to sell such shares
under Rule 144 without regard to the limitations described above.

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.

Coinmach Laundry its executive officers and directors, and GTCR 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 90 days after the date of this Prospectus, without the prior written
consent of BT Alex. Brown, as representative of the Underwriters.

Pursuant to the Company Registration Agreement, the pre-initial public
offering stockholders of Coinmach Laundry, who will hold in the aggregate
5,462,205 shares of Common Stock following the Offering, are entitled to
certain registration rights (such shares of Common Stock are hereinafter
referred to as the "Registrable Securities"). 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. Coinmach Laundry is responsible
for all registration expenses in connection with all such registrations.
Additionally, if Coinmach Laundry proposes to register any of its Common Stock
under the Securities Act, whether for

49
<PAGE>

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 Registrable
Securities would be paid by Coinmach Laundry in all such registrations. Each
holder of Registrable Securities has agreed not to effect any public sale or
distribution of such securities during the Lock-up Period.

No prediction can be made as to the effect, if any, that future sales of
shares of Common Stock, 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 issued, 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 equity securities. Coinmach
Laundry 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."

50
<PAGE>

UNDERWRITING

Subject to the terms and conditions of the underwriting agreement (the
"Underwriting Agreement"), the underwriters named below (the "Underwriters"),
through their representatives ("collectively, the "Representatives") BT Alex.
Brown Incorporated ("BT Alex. Brown"), Lehman Brothers Inc. ("Lehman
Brothers"), Raymond James & Associates, Inc., Wheat First Butcher Singer and
Jefferies & Company, Inc. ("Jefferies"), have severally agreed to purchase
from Coinmach Laundry and the Selling Stockholders the following respective
numbers of shares of Common Stock at the public offering price less the
underwriting discounts and commissions set forth on the cover page of this
Prospectus:

<TABLE>
<CAPTION>
NUMBER
UNDERWRITERS OF SHARES
------------ ---------
<S> <C>
BT Alex. Brown Incorporated...........................................
Lehman Brothers Inc...................................................
Raymond James & Associates, Inc.......................................
Wheat, First Securities, Inc..........................................
Jefferies & Company, Inc..............................................
---------
Total................................................................. 3,750,000
=========
</TABLE>

The Underwriting Agreement provides that the obligations of the Underwriters
are subject to certain conditions precedent and that the Underwriters will
purchase all shares of the Common Stock offered hereby (other than those
subject to the over-allotment option described below) if any of such shares
are purchased.

Coinmach Laundry has been advised by the Representatives that the
Underwriters propose to offer the shares of Common Stock to the public at the
public offering price set forth on the cover page of this Prospectus and to
certain dealers at such price less a concession not in excess of $ per
share. The Underwriters may allow, and such dealers may reallow, a concession
not in excess of $ per share to certain other dealers. After the public
offering, the offering price and other selling terms may be changed by the
Representatives.

Certain of the Selling Stockholders and certain other stockholders
(collectively, if and when the over-allotment option described herein is
exercised, the "Selling Stockholders") have granted to the Underwriters an
option, exercisable by the Representatives not later than 30 days after the
date of this Prospectus, to purchase up to 562,500 additional shares of Common
Stock at the public offering price less the underwriting discounts and
commissions set forth on the cover page of this Prospectus. To the extent that
the Underwriters exercise such option, each of the Underwriters will have a
firm commitment to purchase approximately the same percentage thereof that the
number of shares of Common Stock to be purchased by it shown in the above
table bears to 3,750,000 and such Selling Stockholders will be obligated,
pursuant to the option, to sell such shares to the Underwriters. The
Underwriters may exercise such option only to cover over-allotments made in
connection with the sale of Common Stock offered hereby. If purchased, the
Underwriters will offer such additional shares on the same terms as those on
which the 3,750,000 shares are being offered.

Coinmach Laundry and the Selling Stockholders have agreed to indemnify the
Underwriters against certain liabilities, including liabilities under the
Securities Act.

Coinmach Laundry's directors and executive officers, and GTCR have agreed
not to offer, sell or otherwise dispose of the shares of Common Stock held by
them immediately prior to completion of this

51
<PAGE>

Offering for a period of 90 days after the commencement of this Offering
without the prior written consent of BT Alex. Brown except to the extent being
sold in this Offering. Coinmach Laundry has entered into a similar agreement,
except that it may issue, and grant options to purchase, shares of Common
Stock under its current stock option and purchase plans and pursuant to other
currently outstanding options. BT Alex. Brown, at any time and without notice,
may release all or any part of the shares from these restrictions.

The Representatives have advised Coinmach Laundry that the Underwriters do
not intend to confirm sales to any account over which they exercise
discretionary authority.

The Underwriters have advised Coinmach Laundry that, pursuant to Regulation
M under the Securities Act, certain persons participating in this Offering may
engage in transactions, including stabilizing bids, syndicate covering
transactions or the imposition of penalty bids, which may have the effect of
stabilizing or maintaining the market price of the Common Stock at a level
above that which might otherwise prevail in the open market. A "stabilizing
bid" is a bid for or the purchase of the Common Stock on behalf of the
Underwriters for the purpose of fixing or maintaining the price of the Common
Stock. A "syndicate covering transaction" is the bid for or the purchase of
the Common Stock on behalf of the Underwriters to reduce a short position
incurred by the Underwriters in connection with this offering. A "penalty bid"
is an arrangement permitting the Underwriters to reclaim the selling
concession otherwise accruing to an Underwriter or dealer in connection with
this offering if the Common Stock originally sold by such Underwriter or
dealer is purchased by the Underwriters in a syndicate covering transaction
and has therefore not been effectively placed by such Underwriter or dealer.
The Underwriters have advised Coinmach Laundry that such transactions may be
effected on the Nasdaq National Market or otherwise and, if commenced, may be
discontinued at any time.

As permitted by Rule 103 under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), Underwriters or prospective Underwriters that
are market markers ("passive market makers") in the Common Stock may make bids
for or purchases of Common Stock on the Nasdaq National Market until such
time, if any, when a stabilizing bid for such securities has been made. Rule
103 generally provides that: (i) a passive market maker's net daily purchases
of the Common Stock may not exceed 30% of its average daily trading volume in
such securities for the two full consecutive calendar months (or any 60
consecutive days ending within the 10 days) immediately preceding the filing
date of the registration statement of which this Prospectus forms a part; (ii)
a passive market maker may not effect transactions or display bids for the
Common Stock at a price that exceeds the highest independent bid for the
Common Stock by persons who are not passive market makers; and (iii) bids made
by passive market makers must be identified as such.

No action has been or will be taken in any jurisdiction by the Selling
Stockholders, the Company, or the Representatives that would permit an
offering to the general public of the shares of Common Stock offered by this
Prospectus in any jurisdiction other than the United States.

From time to time, certain of the Representatives have provided investment
banking services to the Company, for which they have received customary
underwriting fees. Lehman Brothers acted as a Representative in the Company's
Initial Public Offering in July 1996. An affiliate of BT Alex. Brown acts as
administrative agent and an affiliate of Lehman Brothers acts as documentation
agent for the Credit Facility. Jefferies and BT Alex. Brown acted as Initial
Purchasers in the Company's recent Bond Offering, and Jefferies has provided
certain general financial advisory services to the Company.

52
<PAGE>

LEGAL MATTERS

The validity of the shares of Common Stock offered by this Prospectus and
certain legal matters in connection with the Offering for Coinmach Laundry and
for the Selling Stockholders will be passed upon by Anderson Kill & Olick,
P.C., New York, New York. Certain legal matters in connection with the
Offering will be passed upon for the Underwriters by Cahill Gordon & Reindel
(a partnership including a professional corporation), New York, New York. A
member of Anderson Kill & Olick, P.C. holds options to purchase 57,512 shares
of Common Stock and is a Selling Stockholder in the Offering. See "Principal
and Selling Stockholders".

EXPERTS

The consolidated financial statements of Coinmach Laundry and subsidiaries
as of March 28, 1997 and for the year then ended, as of March 29, 1996 and for
the six month transition period then ended and for the period from April 5,
1995 to September 29, 1995 included and incorporated by reference in this
Prospectus and Registration Statement have been audited by Ernst & Young LLP,
independent auditors, as stated in their reports thereon which are included
and incorporated by reference herein, and have been so included and
incorporated in reliance upon such reports given upon the authority of such
firm as experts in accounting and auditing.

AVAILABLE INFORMATION

Coinmach Laundry is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, in
accordance therewith, files reports, proxy statements and other information
with the Commission. Such reports, proxy statements and other information may
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, and
at its Regional Offices located at, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661-2511 and Seven World Trade Center, 13th Floor, New
York, New York 10048. Copies of such material may also be obtained by mail
from the Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates. The Common Stock is listed for
trading on The Nasdaq National Market, and reports, proxy statements and other
information concerning the Company are on file for inspection at the offices
of The Nasdaq National Market, 1735 K Street, N.W., Washington, D.C. 20006.
Such material may also be accessed electronically by means of the Commission's
home page on the Internet at http://www.sec.gov.

Coinmach Laundry has filed with the Commission a Registration Statement on
Form S-3 under the Securities Act of 1933, as amended with respect to the
Common Stock offered hereby (the "Registration Statement"). This Prospectus
does not contain all of the information included in the Registration Statement
and the exhibits thereto. Statements contained in this Prospectus as to the
contents of any contract or other document referred to herein and filed as an
exhibit to the Registration Statement are not necessarily complete and, in
each instance, reference is made to the copy of such contract or other
document filed as an exhibit to the Registration Statement, each such
statement being qualified in all respects by such reference. For further
information with respect to Coinmach Laundry and its subsidiaries and the
Common Stock, reference is hereby made to the Registration Statement and the
exhibits thereto which may be obtained from the Commission in the manner set
forth above.

53
<PAGE>

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The following documents filed by Coinmach Laundry with the Commission are
hereby incorporated by reference in and made a part of this Prospectus:

(1) Annual Report on Form 10-K for the fiscal year ended March 28, 1997;

(2) Quarterly Report on Form 10-Q for the fiscal quarter ended June 27,
1997;

(3) Current Report on Form 8-K dated October 9, 1997; and

(4) Proxy Statement dated June 13, 1997, for the 1997 Annual Meeting of
Stockholders;

All documents filed by Coinmach Laundry with the Commission pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of
this Prospectus and prior to the termination of the Offering shall be deemed to
be incorporated by reference in this Prospectus and to be a part hereof from
the date of filing of such documents. Any statement contained herein or in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any subsequently filed document
which also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Prospectus.

Coinmach Laundry will furnish without charge, to each person to whom this
Prospectus is delivered, upon written or oral request of such person, including
any beneficial owner, a copy of any and all of the information that has been
incorporated by reference into the Registration Statement of which this
Prospectus is a part but which has not been delivered with this Prospectus (not
including exhibits to the information that is incorporated by reference unless
such exhibits are specifically incorporated by reference into the information
that the Registration Statement incorporates by reference); such requests
should be directed to Coinmach Laundry Corporation, 55 Lumber Road, Roslyn, New
York 11576, Attention: Robert M. Doyle.

54
<PAGE>

COINMACH LAUNDRY CORPORATION AND SUBSIDIARIES

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

CONSOLIDATED FINANCIAL STATEMENTS--CONSOLIDATED BALANCE SHEETS OF COINMACH
LAUNDRY CORPORATION AND SUBSIDIARIES AS OF MARCH 28, 1997 AND MARCH 29, 1996
AND THE RELATED CONSOLIDATED STATEMENTS OF OPERATIONS, SHAREHOLDERS' EQUITY
(DEFICIT), AND CASH FLOWS FOR THE YEAR ENDED MARCH 28, 1997, 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

<TABLE>
<S> <C>
Report of Independent Auditors........................................... F-2
Consolidated Balance Sheets.............................................. F-3
Consolidated Statements of Operations.................................... F-5
Consolidated Statements of Stockholders' Equity (Deficit)................ F-6
Consolidated Statements of Cash Flows.................................... F-8
Notes to Consolidated Financial Statements............................... F-9

UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS--CONSOLIDATED BALANCE SHEETS OF
COINMACH LAUNDRY CORPORATION AND SUBSIDIARIES AS OF JUNE 27, 1997 AND MARCH
28, 1997, AND THE RELATED CONSOLIDATED STATEMENTS OF OPERATIONS, SHAREHOLDERS'
EQUITY, AND CASH FLOWS FOR THE THREE MONTH PERIOD ENDED JUNE 27, 1997 AND JUNE
28, 1996 WITH ACCOMPANYING NOTES

Condensed Consolidated Balance Sheets.................................... F-24
Condensed Consolidated Statements of Operations.......................... F-25
Condensed Consolidated Statements of Cash Flows.......................... F-26
Notes to Condensed Consolidated Financial Statements..................... F-27
</TABLE>

F-1
<PAGE>

REPORT OF INDEPENDENT AUDITORS

To the Board of Directors of Coinmach Laundry Corporation

We have audited the accompanying consolidated balance sheets of Coinmach
Laundry Corporation and Subsidiaries (the "Company") as of March 28, 1997 and
March 29, 1996, and the related consolidated statements of operations,
stockholders' equity (deficit), and cash flows for the year ended March 28,
1997, 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 consolidated financial position of Coinmach
Laundry Corporation and Subsidiaries at March 28, 1997 and March 29, 1996, and
the consolidated results of their operations and their cash flows for the year
ended March 28, 1997, 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.

ERNST & YOUNG LLP

Melville, New York
May 13, 1997, except for
Note 5b., as to which the date
is June 2, 1997

F-2
<PAGE>

COINMACH LAUNDRY CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(IN THOUSANDS OF DOLLARS)

<TABLE>
<CAPTION>
MARCH 28, MARCH 29,
1997 1996
--------- ---------
<S> <C> <C>
ASSETS
Cash and cash equivalents................................ $ 14,729 $ 19,858
Receivables, less allowance of $555 and $454............. 6,894 5,260
Inventories.............................................. 7,959 4,443
Prepaid expenses......................................... 3,170 2,641
Advance rental payments.................................. 38,472 20,320
Property and equipment:
Laundry equipment and fixtures......................... 135,656 89,394
Land, building and improvements........................ 14,266 10,965
Trucks and other vehicles.............................. 4,211 1,849
-------- --------
154,133 102,208
Less accumulated depreciation.......................... (42,017) (19,509)
-------- --------
Net property and equipment............................... 112,116 82,699
Contract rights, net of accumulated amortization of
$19,815 and $8,925...................................... 180,557 59,745
Goodwill, net of accumulated amortization of $5,574 and
$2,386.................................................. 95,771 44,071
Other assets............................................. 13,253 10,111
-------- --------
Total assets............................................. $472,921 $249,148
======== ========
</TABLE>

See accompanying notes.

F-3
<PAGE>

COINMACH LAUNDRY CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS--(CONTINUED)

(IN THOUSANDS OF DOLLARS)

<TABLE>
<CAPTION>
MARCH 28, MARCH 29,
1997 1996
--------- ---------
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Accounts payable......................................... $ 8,941 $ 6,085
Accrued commissions...................................... 10,573 7,380
Accrued interest......................................... 9,712 7,745
Other accrued expenses................................... 8,996 7,557
Deferred income taxes.................................... 65,650 18,924
11 3/4% senior notes..................................... 196,655 196,655
Credit facility.......................................... 130,000 --
9 7/8% promissory note................................... 15,000 --
12 3/4% senior notes..................................... -- 5,000
Other long-term debt..................................... 3,831 1,110
Stockholders' equity (deficit):
Common stock........................................... 105 62
Capital in excess of par value......................... 53,160 17,841
Accumulated deficit.................................... (29,263) (18,719)
-------- --------
24,002 (816)
Receivables from stockholders.......................... (439) (492)
-------- --------
Total stockholders' equity (deficit)..................... 23,563 (1,308)
-------- --------
Total liabilities and stockholders' equity (deficit)..... $472,921 $249,148
======== ========
</TABLE>

See accompanying notes.

F-4
<PAGE>

COINMACH LAUNDRY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(IN THOUSANDS OF DOLLARS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
SIX-MONTH
TRANSITION
YEAR ENDED PERIOD ENDED APRIL 5, 1995
MARCH 28, MARCH 29, TO SEPTEMBER
1997 1996 29, 1995
---------- ------------ -------------
<S> <C> <C> <C>
Revenues................................. $206,852 $ 89,070 $89,719
Costs and expenses:
Laundry operating expenses............. 139,446 60,536 62,905
General and administrative............. 4,613 1,844 2,351
Depreciation and amortization.......... 46,316 18,212 18,423
Stock based compensation charge........ 2,152 -- --
Restructuring expenses................. -- -- 2,200
-------- -------- -------
192,527 80,592 85,879
-------- -------- -------
Operating income......................... 14,325 8,478 3,840
Interest expense, net.................... 26,859 11,999 11,818
-------- -------- -------
Loss before income taxes and
extraordinary items..................... (12,534) (3,521) (7,978)
-------- -------- -------
Provision (benefit) for income taxes:
Currently payable...................... 200 50 420
Deferred............................... (2,507) (1,048) (2,282)
-------- -------- -------
(2,307) (998) (1,862)
-------- -------- -------
Loss before extraordinary items.......... (10,227) (2,523) (6,116)
Extraordinary items, net of income tax
benefit of $206 for the year ended March
28, 1997 and $5,305 for the six-month
transition period ended March 29, 1996.. (296) (8,925) --
-------- -------- -------
Net loss................................. $(10,523) $(11,448) $(6,116)
======== ======== =======
Loss per share:
Before extraordinary items............. $ (1.11) $ -- $ --
Extraordinary items.................... (.03) -- --
-------- -------- -------
Net loss per share....................... $ (1.14) $ -- $ --
======== ======== =======
Pro forma loss per share:
Before extraordinary items............. $ -- $ (.32) $ (.79)
Extraordinary items.................... -- (1.15) --
-------- -------- -------
Pro forma net loss per share............. $ -- $ (1.47) $ (.79)
======== ======== =======
</TABLE>

See accompanying notes.

F-5
<PAGE>

COINMACH LAUNDRY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)

(IN THOUSANDS OF DOLLARS, EXCEPT PAR VALUE AND SHARES)

<TABLE>
<CAPTION>
BALANCE BALANCE RECAPITALIZATION BALANCE
APRIL 5, NET SEPTEMBER 29, NET OF MARCH 29,
1995 LOSS 1995 LOSS COMMON STOCK 1996
-------- ------- ------------- -------- ---------------- ---------
<S> <C> <C> <C> <C> <C> <C>
Voting Class A common
stock, par value $.01:
Authorized shares
15,000,000
issued shares, end of
period--
0, 0 and 10,004,278.... $ -- $ -- $ -- $ -- $-- $ --
Non-voting Class B
common stock, par value
$.01:
Authorized shares
1,000,000
issued shares, end of
period--
0, 0 and 480,648....... -- -- -- -- -- --
Class A common stock,
par value $.01:
Authorized shares
1,959,021
issued shares, end of
period--1,959,021,
1,783,584 and 0........ 19 -- 19 -- (1) 18
Class B common stock,
par value $.01:
Authorized shares
345,710
issued shares, end of
each period--265,044,
265,044 and 0.......... 3 -- 3 -- -- 3
Class C common stock,
par value $.01:
Authorized shares
305,212
issued shares, end of
period--
0, 305,212 and 0....... -- -- -- -- 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, 175,436 and 0....... -- -- -- -- 2 2
Class F common stock,
par value $.01:
Authorized shares
3,086,045
issued shares, end of
period--
0, 3,086,045 and 0..... -- -- -- -- 30 30
Class G common stock,
par value $.01:
Authorized shares
618,428
issued shares, end of
period--
0, 578,509 and 0....... -- -- -- -- 6 6
Series A Preferred
stock, par value $.01:
1,000,000 authorized,
issued shares, end of
period--0.............. -- -- -- -- -- --
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
stockholders........... (492) -- (492) -- -- (492)
------- ------- ------- -------- ---- -------
Total stockholders'
equity (deficit)....... $16,256 $(6,116) $10,140 $(11,448) $-- $(1,308)
======= ======= ======= ======== ==== =======
</TABLE>

See accompanying notes.

F-6
<PAGE>

COINMACH LAUNDRY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) (CONTINUED)

(IN THOUSANDS OF DOLLARS, EXCEPT PAR VALUE AND SHARES)

<TABLE>
<CAPTION>
BALANCE
MARCH 29, RECLASSIFICATION ISSUANCE REDEMPTION ISSUANCE STOCK NET ACTIVITY
1996, BROUGHT NET OF COMMON OF PREFERRED OF PREFERRED OF COMMON STOCK BASED IN LOANS TO
FORWARD LOSS STOCK STOCK STOCK STOCK DIVIDEND COMPENSATION STOCKHOLDERS
------------- -------- ---------------- ------------ ------------ --------- -------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Voting Class A
common stock,
par value $.01:
Authorized
shares--
15,000,000
issued shares,
end of period
--0, 0 and
10,004,278..... $ -- $ -- $ 57 $ -- $ -- $ 43 $ -- $ -- $--
Non-voting Class
B common stock,
par value $.01:
Authorized
shares--
1,000,000
issued shares,
end of period
--0, 0 and
480,648........ -- -- 5 -- -- -- -- -- --
Class A common
stock, par
value $.01:
Authorized
shares--
1,959,021
issued shares,
end of period
--1,959,021,
1,783,584 and
0.............. 18 -- (18) -- -- -- -- -- --
Class B common
stock, par
value $.01:
Authorized
shares--345,710
issued shares,
end of each
period--
265,044,
265,044 and 0.. 3 -- (3) -- -- -- -- -- --
Class C common
stock, par
value $.01:
Authorized
shares--305,212
issued shares,
end of period
--0, 305,212
and 0.......... 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, 175,436
and 0.......... 2 -- (2) -- -- -- -- -- --
Class F common
stock, par
value $.01:
Authorized
shares--
3,086,045
issued shares,
end of period
--0, 3,086,045
and 0.......... 30 -- (30) -- -- -- -- -- --
Class G common
stock, par
value $.01:
Authorized
shares--618,428
issued shares,
end of period
--0, 578,509
and 0.......... 6 -- (6) -- -- -- -- -- --
Series A
Preferred
stock, par
value $.01:
1,000,000
authorized,
issued shares,
end of period
--0............ -- -- -- 19,207 (19,207) -- -- -- --
Capital in
excess of par
value.......... 17,841 -- -- (19,207) -- 53,764 (398) 1,160 --
Accumulated
deficit........ (18,719) (10,523) -- -- -- -- (21) -- --
-------- -------- ----- -------- -------- ------- ----- ------ ----
(816) (10,523) -- -- (19,207) 53,807 (419) 1,160 --
Receivables from
stockholders... (492) -- -- -- -- -- -- -- 53
-------- -------- ----- -------- -------- ------- ----- ------ ----
Total
stockholders'
equity
(deficit)...... $ (1,308) $(10,523) $ -- $ -- $(19,207) $53,807 $(419) $1,160 $ 53
======== ======== ===== ======== ======== ======= ===== ====== ====
<CAPTION>
BALANCE
MARCH 28,
1997
----------
<S> <C>
Voting Class A
common stock,
par value $.01:
Authorized
shares--
15,000,000
issued shares,
end of period
--0, 0 and
10,004,278..... $ 100
Non-voting Class
B common stock,
par value $.01:
Authorized
shares--
1,000,000
issued shares,
end of period
--0, 0 and
480,648........ 5
Class A common
stock, par
value $.01:
Authorized
shares--
1,959,021
issued shares,
end of period
--1,959,021,
1,783,584 and
0.............. --
Class B common
stock, par
value $.01:
Authorized
shares--345,710
issued shares,
end of each
period--
265,044,
265,044 and 0.. --
Class C common
stock, par
value $.01:
Authorized
shares--305,212
issued shares,
end of period
--0, 305,212
and 0.......... --
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, 175,436
and 0.......... --
Class F common
stock, par
value $.01:
Authorized
shares--
3,086,045
issued shares,
end of period
--0, 3,086,045
and 0.......... --
Class G common
stock, par
value $.01:
Authorized
shares--618,428
issued shares,
end of period
--0, 578,509
and 0.......... --
Series A
Preferred
stock, par
value $.01:
1,000,000
authorized,
issued shares,
end of period
--0............ --
Capital in
excess of par
value.......... 53,160
Accumulated
deficit........ (29,263)
----------
24,002
Receivables from
stockholders... (439)
----------
Total
stockholders'
equity
(deficit)...... $ 23,563
==========
</TABLE>

See accompanying notes.

F-7
<PAGE>

COINMACH LAUNDRY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(IN THOUSANDS OF DOLLARS)

<TABLE>
<CAPTION>
SIX-MONTH
TRANSITION
YEAR ENDED PERIOD ENDED APRIL 5, 1995
MARCH 28, MARCH 29, TO SEPTEMBER 29,
1997 1996 1995
---------- ------------ ----------------
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net loss.............................. $(10,523) $(11,448) $(6,116)
Adjustments to reconcile net loss to
net cash provided by operating
activities:
Depreciation and amortization........ 46,316 18,212 18,423
Deferred income taxes................ (2,507) (1,048) (2,000)
Amortization of debt discount and
deferred issue costs................ 627 508 735
Stock based compensation............. 2,152 -- --
Extraordinary charges for early
extinguishment of debt, net of
taxes............................... 296 8,925 --
Increase or decrease in operating
assets and liabilities, net of
businesses acquired:
(Increase) decrease in other assets.. (2,462) 24 (1,054)
Increase in receivables, net......... (1,100) (1,489) (197)
(Increase) decrease in inventories
and prepaid expenses................ (3,008) (1,100) 930
Increase (decrease) in accounts
payable............................. 2,002 (6) (610)
Increase (decrease) in accrued
interest............................ 1,956 3,193 (25)
Increase (decrease) in other accrued
expenses, net....................... 983 (3,434) 1,980
-------- -------- -------
Net cash provided by operating
activities........................... 34,732 12,337 12,066
-------- -------- -------
INVESTING ACTIVITIES
Additions to property and equipment... (29,779) (10,757) (9,550)
Advance rental payments to location
owners............................... (11,809) (3,462) (3,569)
Additions to net assets related to
acquisitions of businesses (net of
promissory notes of $16,208 in
1997)................................ (155,247) -- (11,925)
Sales of property and equipment....... 137 57 5
-------- -------- -------
Net cash used in investing
activities........................... (196,698) (14,162) (25,039)
-------- -------- -------
FINANCING ACTIVITIES
Debt transactions:
Proceeds from issuance of 11 3/4%
senior notes........................ -- 72,655 --
Proceeds from issuance of term loans
from credit facility................ 130,000 -- --
Net (repayments) borrowings of bank
and other borrowings................ (325) (48,715) 6,126
Repayment of 12 3/4% senior notes.... (5,000) -- --
Principal payments on capitalized
lease obligations................... (1,007) (262) (143)
Deferred debt issuance costs......... (178) (5,397) --
Debt extinguishment costs............ (319) (6,909) --
Equity transactions:
Proceeds from public offering of
common stock........................ 52,894 -- --
Redemption of preferred stock........ (19,207) -- --
Dividend paid--preferred stock....... (21) -- --
Loans to stockholders................ -- -- (154)
Sale of common stock................. -- -- 6,681
-------- -------- -------
Net cash provided by financing
activities........................... 156,837 11,372 12,510
-------- -------- -------
Net (decrease) increase in cash and
cash equivalents..................... (5,129) 9,547 (463)
Cash and cash equivalents, beginning
of period............................ 19,858 10,311 10,774
-------- -------- -------
Cash and cash equivalents, end of
period............................... $ 14,729 $ 19,858 $10,311
======== ======== =======
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Interest paid......................... $ 24,845 $ 8,500 $10,900
======== ======== =======
</TABLE>

See accompanying notes.

F-8
<PAGE>

COINMACH LAUNDRY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 28, 1997

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The accompanying consolidated financial statements of Coinmach Laundry
Corporation ("Coinmach Laundry") and Subsidiaries (collectively, the
"Company") include the accounts of its wholly-owned subsidiary, Coinmach
Corporation ("Coinmach") (formerly Solon Automated Services, Inc. ("Solon")
and the consolidated accounts of The Coinmach Corporation ("TCC")). The
Company was formed on April 5, 1995, at which time it acquired Solon (the
"Solon Acquisition"), and is controlled by Golder Thoma Cressey Rauner, Inc.
("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 LP") 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 consolidated 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 properties throughout much of the
United States. The Company owns and operates approximately 337,000 coin-
operated washers and dryers in over 30,000 multi-family housing units on
routes located in 30 states and the District of Columbia and in 150 retail
laundromats located throughout Texas. The Company's wholly-owned subsidiary,
Super Laundry Equipment Corp. ("Super Laundry"), also is a construction and
laundromat equipment distribution company.

All material intercompany accounts and transactions have been eliminated in
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 last Friday in March. The period from April
5, 1995 to September 29, 1995 is referred to as "1995", the period from
September 30, 1995 to March 29, 1996 is referred to as "1996T" and the year
ended March 28, 1997 is referred to as "1997".

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.

Super Laundry's customers generally sign sales contracts pursuant to which
Super Laundry constructs and equips complete laundromat operations, including
location identification, construction, plumbing,

F-9
<PAGE>

COINMACH LAUNDRY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES--(CONTINUED)
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 amounted to
approximately $18.8 million, $7.8 million and $7.9 million in 1997, 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 28, MARCH 29,
1997 1996
--------- ---------
<S> <C> <C>
Laundry equipment........................................ $6,198 $3,774
Machine repair parts..................................... 1,761 669
------ ------
$7,959 $4,443
====== ======
</TABLE>

Property and Equipment

Property, equipment and leasehold improvements are carried at cost and are
depreciated or amortized on a straight-line basis over the lesser of the
estimated useful lives or lease life:

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

Upon the 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 $22.6 million, $9.4 million and $9.5 million for
1997, 1996T and 1995, respectively.

Goodwill and Contract Rights

Goodwill, under purchase accounting, represents the excess of cost over fair
value of net assets acquired. Goodwill recorded as a result of the Solon
Acquisition on April 5, 1995 (see Note 2) is being amortized on a straight-
line basis over 20 years. Goodwill recorded on acquisitions subsequent thereto
is being amortized over 15 years on a straight-line basis.

F-10
<PAGE>

COINMACH LAUNDRY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES--(CONTINUED)

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 or present valued future cash flows at prevailing
discount rates.

Management periodically evaluates the realizability of the goodwill and
contract rights balances based upon the Company's expectations of undiscounted
cash flows and operating income. Based upon present operations and strategic
plans, management believes that no impairment of goodwill or contract rights
has occurred.

Advance Rental Payments

Advance rental 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 approximately
$966,000, $277,000 and $148,000 for 1997 and 1996T and 1995, respectively.

Reclassification

Certain 1996T balances have been reclassified to conform with the 1997
presentation.

Loss per Share

Loss per share for 1997 was calculated based upon the weighted average
number of common shares outstanding of 9,232,530. Pro forma loss per share for
1996T and 1995 was calculated based upon the weighted average number of common
shares of 7,774,017, which amount gives effect to the transactions discussed
below.

The Company's historical capitalization differs significantly from its
capitalization effective with its July 23, 1996 initial public offering of
stock (see Note 8a). Accordingly, historical net loss per common share for the
six month transition period ended March 29, 1996 and the period from April 5,
1995 to September 29, 1995 is not considered meaningful and has not been
presented herein; rather, a pro forma net loss per share is presented for
these periods in the accompanying statement of operations. The calculation of
the shares used in computing pro forma net loss per share includes the effect
of the stock issued and options granted discussed further in Note 8a, as well
as the redemption of preferred stock, as more fully described in Note 8c.
Pursuant to Securities and Exchange Commission Staff Accounting Bulletin No.
83, common stock sold or issued at prices below the initial public offering
price per share in the twelve months preceding the initial public offering
have been included in the calculation as if outstanding for 1996T and 1995.

In February 1997, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 128, "Earnings Per
Share." This standard changes the method of calculating earnings per share and
will be effective for periods ending after December 15, 1997. Earlier
application is not permitted; however, when adopted, all prior period earnings
per share data presented will be required to be restated to conform with the
new standard. The Company has determined that the impact of SFAS No. 128 will
not have a material effect on the calculations of earnings per share.

Employee Stock Options

The Company has a stock option program which is more fully described in Note
8d. The Company accounts for stock option grants in accordance with Accounting
Principles Board Opinion ("APB") No. 25, "Accounting for Stock Issued to
Employees." Under the Company's stock option program, options are

F-11
<PAGE>

COINMACH LAUNDRY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES--(CONTINUED)
granted with an exercise price not less than the market price of the
underlying common stock of the Company on the date of grant.

Accordingly, no compensation expense is recognized in connection with the
grant of these stock options.

In October 1995, the FASB issued SFAS No. 123, "Accounting for Stock-Based
Compensation". SFAS 123 defines a fair value method of accounting for the
issuance of stock options and other equity instruments. Under the fair value
method, compensation cost is measured at the grant date based on the fair
value of the award and is recognized over the service period, which is usually
the vesting period. Pursuant to SFAS No. 123, companies are encouraged, but
are not required, to adopt the fair value method of accounting for employee
stock-based transactions. Companies are also permitted to continue to account
for such transactions under APB No. 25, but are required to disclose in the
financial statement footnotes, pro forma net (loss) income and per share
amounts as if the Company had applied the new method of accounting for all
grants made during 1997 and 1996. SFAS No. 123 also requires increased
disclosures for stock-based compensation arrangements. Effective March 30,
1996, the Company adopted the disclosure requirements of SFAS No. 123.

Income Taxes

The Company accounts for income taxes under SFAS No. 109, "Accounting for
Income Taxes". SFAS No. 109 requires the asset and liability method of
accounting for income taxes. Under the asset and liability method of SFAS No.
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. SFAS No. 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 SFAS No.
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

Effective March 30, 1996, the Company adopted SFAS No. 121, "Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed
Of." SFAS No. 121 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. SFAS No. 121 also addresses the accounting
for long-lived assets that are expected to be disposed of. The adoption of
SFAS No. 121 did not have an effect on the results of operations or financial
condition of the Company.

2. BUSINESS COMBINATIONS

a. The Kwik Wash Acquisition

On January 8, 1997, pursuant to the terms and conditions of a Stock Purchase
Agreement dated as of November 25, 1996, Coinmach completed the acquisition of
100% of the outstanding voting securities of each of KWL, Inc. ("KWL"), a
Nevada corporation, and Kwik-Wash Laundries, Inc. ("Kwik Wash"), a Nevada
corporation, for approximately $125 million in cash (excluding transaction
expenses) and a $15 million promissory note issued by Coinmach Laundry (the
"Kwik Wash Acquisition"). KWL and Kwik Wash are the sole partners of Kwik Wash
Laundries, L.P. (the "Kwik Wash Partnership"), a Texas limited

F-12
<PAGE>

COINMACH LAUNDRY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

BUSINESS COMBINATIONS--(CONTINUED)
partnership. The Kwik Wash Partnership, based in Dallas, Texas, provides coin-
operated laundry equipment services to multi-family dwellings in Texas,
Louisiana, Arkansas and Oklahoma and operates approximately 150 retail
laundromats located throughout Texas. Simultaneously with the acquisition,
KWL, Kwik Wash and the Kwik Wash Partnership merged with and into Coinmach.

Concurrently with the Kwik Wash Acquisition, Coinmach entered into a new
senior financing arrangement providing up to $200 million (the "New Credit
Facility") (see Note 5). The New Credit Facility, proceeds of which were used
in part to fund the Kwik Wash Acquisition, replaced the Company's then
existing credit facility and will provide financing to support the Company's
acquisition strategy.

The Kwik Wash Acquisition has been accounted for as a purchase and,
accordingly, assets and liabilities were recorded at fair value at the date of
acquisition and the results of operations are included subsequent to that
date. The excess of cost over the net tangible assets acquired was allocated
to contract rights of approximately $123.3 million, goodwill of $49.4 million
and deferred taxes payable of approximately $49.4 million.

The following table reflects unaudited pro forma combined results of
operations of the Company and Kwik Wash as if such acquisition had taken place
at the beginning of each of the periods presented (in thousands except per
share data):

<TABLE>
<CAPTION>
SIX-MONTH
TRANSITION
YEAR ENDED PERIOD ENDED
MARCH 28, MARCH 29,
1997 1996
---------- ------------
<S> <C> <C>
Revenues............................................ $255,605 $121,687
Loss before extraordinary items..................... (11,148) (3,190)
Net loss............................................ (11,444) (12,115)
Loss before extraordinary items per common share.... (1.21) (.41)
Net loss per common share........................... (1.24) (1.56)
</TABLE>

These unaudited pro forma results have been presented for comparative
purposes only and include certain adjustments, such as increased interest
expense on the related acquisition debt and additional amortization expense of
intangible assets, offset by the capitalization of installation and decorating
costs to conform to the accounting policy of the Company.

In management's opinion, the unaudited pro forma combined results of
operations are not indicative of the actual results that would have occurred
had the Kwik Wash Acquisition been consummated at the beginning of each period
or the results of future operations of the combined companies under the
ownership and management of the Company.

b. Other Acquisitions

During the 1997 fiscal year, the Company made acquisitions of several small
route businesses or assets of businesses with purchase prices aggregating
approximately $26.3 million, of which the Company paid approximately $25.2
million in cash and $1.2 million in promissory notes issued by the Company,
which are included in other long-term debt. Such promissory notes have a
conversion option which allows the holder of the option to convert these
promissory notes, after the one-year anniversary of the issue date, into
shares of the Company's Class A Common Stock at the principal amount then
outstanding at a conversion price equal to 115% of the average daily closing
price per share of Common Stock over the twenty business day period
immediately preceding the issue date.

F-13
<PAGE>

COINMACH LAUNDRY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

BUSINESS COMBINATIONS--(CONTINUED)
c. The Solon Acquisition

Solon entered into a Stock Purchase Agreement, dated as of March 7, 1995,
with Ford Coin Laundries, Inc. ("Ford"), and certain other parties named
therein, whereby Ford purchased all of Solon's outstanding Common Stock (the
"Common Stock") and substantially all of Solon's Class A Common Stock (the
"Class A Common Stock") (collectively, the "Shares"). The purchase price for
the Shares was $11.5 million. The foregoing transaction closed on April 5,
1995. The source of funds used by Ford for the Shares was the cash proceeds
from the sales by Ford to the Company of (i) Ford's non-voting Class A Common
Stock (the "Ford Non-Voting Common Stock") pursuant to a Stock Purchase
Agreement, dated April 4, 1995, and (ii) an option to purchase Ford's voting
common stock (the "Ford Voting Common Stock") 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 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 owned, and had the sole power to dispose of, 1,000 shares
of Ford Non-Voting Common Stock.

Pursuant to the Letter Agreement dated April 4, 1995, Ford granted to the
Company, among other things, an option (the "Option") to purchase, subject to
the terms and conditions contained therein, all of 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 Ford
Non-Voting Common Stock. As of April 28, 1995, the Company beneficially owned,
and had the sole power to vote and dispose of, ten shares of Ford Voting
Common Stock.

d. 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 was a holding company which was formed to acquire partnership interests
in Industries and Super Laundry LP. 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 LP. 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.

e. 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 corporation after the merger, whereupon it changed its name to
Coinmach

F-14
<PAGE>

COINMACH LAUNDRY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

BUSINESS COMBINATIONS--(CONTINUED)
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>
SEPTEMBER
APRIL 5, 1995 30, 1995
TO SEPTEMBER 29, TO NOVEMBER
1995 29, 1995
---------------- -----------
<S> <C> <C>
REVENUES
Solon........................................... $51,256 $17,909
TCC............................................. 38,463 13,018
------- -------
Combined........................................ $89,719 $30,927
======= =======
NET (LOSS) INCOME
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 28, MARCH 29,
1997 1996
--------- ---------
<S> <C> <C>
Trade receivables........................................ $5,551 $3,113
Notes receivable......................................... 1,225 1,811
Finance lease receivables................................ 380 625
Other.................................................... 293 165
------ ------
7,449 5,714
Allowance for doubtful accounts.......................... 555 454
------ ------
$6,894 $5,260
====== ======
</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 9). 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. RESTRUCTURING COSTS

Restructuring charges for 1995 consist of costs aggregating approximately
$2.2 million, which includes 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

F-15
<PAGE>

COINMACH LAUNDRY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

RESTRUCTURING COSTS--(CONTINUED)
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 was 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

Debt consists of the following (in thousands):
<TABLE>
<CAPTION>
MARCH 28, MARCH 29,
1997 1996
--------- ---------
<S> <C> <C>
11 3/4% Senior Notes due
2005................... $196,655 $196,655
12 3/4% Senior Notes due
2001................... -- 5,000
Credit facility......... 130,000 --
9 7/8% Promissory Note
due 2004............... 15,000 --
Obligations under
capital leases......... 1,711 686
Other long-term debt
with varying terms and
maturities............. 2,120 424
-------- --------
$345,486 $202,765
======== ========
</TABLE>

a. Senior Notes

On November 30, 1995, Coinmach completed an exchange offer with
substantially all the holders of certain 12 3/4% Senior Notes due 2001 (the
"Senior Notes") and certain 13 3/4% Senior Subordinated Debentures due 2002
(the "Subordinated Debentures"). Through December 14, 1995, Coinmach issued a
total of $196.7 million of 11 3/4% Senior Notes due 2005 (the "Notes") which
enabled it to complete this exchange offer, consummate the merger with TCC,
retire its remaining debt, and provide additional working capital. Coinmach
incurred costs of approximately $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 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 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 were
exchanged for identical registered notes in a registered exchange offer in
April 1996. Additionally, the Notes restrict the payment of certain dividends,
distributions or other payments from Coinmach to Coinmach Laundry.

In February 1997, Coinmach redeemed all of its outstanding Senior Notes at a
redemption price of 106.375% of the principal amount thereof, together with
accrued interest from January 15, 1997 to February 18, 1997, in an aggregate
amount of approximately $5.4 million. As part of the premium paid to redeem
the Senior Notes, together with the write-off of all unamortized financing
costs associated with the Senior Notes, Coinmach recognized an extraordinary
charge of $502,000 (net of a tax benefit of $206,000).

F-16
<PAGE>

COINMACH LAUNDRY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

DEBT--(CONTINUED)
b. Credit Facility

On November 30, 1995, Coinmach entered into a revolving credit facility
("Credit Facility"), which provided up to a maximum of $35 million and which
replaced certain credit facilities of both Solon and TCC. Availability under
the Credit Facility was limited by an amount equal to one semi-annual interest
payment on the Notes. Interest on the borrowings was payable monthly at a rate
per annum no greater than the sum of LIBOR plus 2.50%. The Company was
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
were secured by real and personal property of the Company and also required
the Company, among other things, to maintain certain financial ratios and
restrict additional investments and indebtedness.

On January 8, 1997, the Company entered into a senior financing arrangement
under the New Credit Facility with Bankers Trust Company, First Union National
Bank of North Carolina, Lehman Commercial Paper, Inc. and certain other
lending institutions named therein (collectively, the "Banks"), replacing the
Company's then existing credit facility. The New Credit Facility, as amended
effective June 2, 1997 and prior to any principal installments made, consists
of a $70 million revolving credit facility and a $190 million term loan
facility, which is comprised of a Tranche A term loan in the amount of $30
million and a Tranche B term loan in the amount of $160 million. The Tranche B
term loan was increased by $60 million effective June 2, 1997. The New Credit
Facility also provides for up to $10 million of letter of credit financing and
short term borrowings under a swing line facility of up to $5 million.

Interest on the Company's borrowings under the New Credit Facility is
payable quarterly in arrears with respect to Base Rate Loans and the last day
of each applicable interest period with respect to Eurodollar Loans and at a
rate per annum no greater than the sum of the Applicable Base Rate Margin plus
the Base Rate or the sum of the Applicable Eurodollar Margin plus the
Eurodollar Rate (in each case, as defined in the New Credit Facility).

Indebtedness under the New Credit Facility is secured by all of the
Company's real and personal property. The Company has guaranteed the
indebtedness under the New Credit Facility and pledged to Bankers Trust
Company, as Collateral Agent, its interests in all of the issued and
outstanding shares of capital stock of Coinmach. In addition to certain terms
and provisions, events of default, as defined, and customary restrictive
covenants and agreements, the New Credit Facility contains certain covenants
including, but not limited to, a maximum leverage ratio, a minimum
consolidated interest coverage ratio, and limitations on indebtedness, capital
expenditures, advances, investments and loans, mergers and acquisitions,
dividends, stock issuances and transactions with affiliates.

Debt outstanding under the New Credit Facility as of March 28, 1997,
consisted of the following (in thousands):

<TABLE>
<S> <C>
Term loan A, quarterly payments of $750 commencing March 31,
1997, and increasing to $1,000 March 31, 1998, $1,250 March 31,
1999, and $2,000 March 31, 2002. (Interest rate of 7.6875% at
March 28, 1997)................................................. $ 30,000
Term loan B, semi-annual payments of $500 commencing June 20,
1997 with the final three payments of $31,333 on June 20, 2003,
December 31, 2003 and June 30, 2004. (Interest rate of 8.125% at
March 28, 1997)................................................. 100,000
Revolving line of credit......................................... --
--------
$130,000
========
</TABLE>

F-17
<PAGE>

COINMACH LAUNDRY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

DEBT--(CONTINUED)
c. Promissory Note

Pursuant to the Kwik Wash Acquisition, Coinmach Laundry issued a $15.0
million 9 7/8% promissory note due June 15, 2004. Annual payments (in
thousands) of $1,000 commence January 15, 1998 and increasing to $2,000
January 15, 2000, $3,000 January 15, 2003 and $4,000 June 15, 2004.

6. RETIREMENT SAVINGS PLANS

Coinmach maintains several defined contribution plans (including the
Coinmach Plan, Solon Plan and Kwik Wash Plan collectively, the "Plans")
meeting the guidelines of Section 401(k) of the Internal Revenue Code. All of
the Plans require employees to meet certain age, employment status and minimum
entry requirements as allowed by law.

Contributions to the Plans for 1997, 1996T and 1995 amounted to
approximately $140,000, $43,000 and $43,000, respectively.

The Company does not provide any other post-retirement benefits.

7. INCOME TAXES

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

<TABLE>
<CAPTION>
MARCH 28, MARCH 29,
1997 1996
--------- ---------
<S> <C> <C>
Deferred tax liabilities:
Accelerated depreciation and contract rights........... $73,809 $26,537
Other, net............................................. 1,516 1,449
------- -------
75,325 27,986
------- -------
Deferred tax assets:
Net operating loss carryforwards....................... 9,544 8,549
Stock compensation expense............................. 476 --
Other.................................................. 115 973
Valuation allowance for deferred tax assets............ (460) (460)
------- -------
9,675 9,062
------- -------
Net deferred tax liabilities............................. $65,650 $18,924
======= =======
</TABLE>

Deferred taxes arise primarily from timing differences resulting from using
accelerated depreciation for tax purposes and straight-line depreciation for
financial reporting purposes, and contract rights acquired which are not
deductible for tax purposes.

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 2008, consist of approximately $7 million (after the limitation)
relating to Solon and approximately $16.3 million relating to the Company.

F-18
<PAGE>

COINMACH LAUNDRY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

INCOME TAXES--(CONTINUED)

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

<TABLE>
<CAPTION>
YEAR ENDED PERIOD ENDED APRIL 5, 1995
MARCH 28, MARCH 29, TO SEPTEMBER 29,
1997 1996 1995
---------- ------------ ----------------
<S> <C> <C> <C>
Federal............................. $(2,039) $(5,215) $(1,760)
State............................... (474) (1,088) (102)
------- ------- -------
$(2,513) $(6,303) $(1,862)
======= ======= =======
</TABLE>

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>
YEAR ENDED PERIOD ENDED APRIL 5, 1995
MARCH 28, MARCH 29, TO SEPTEMBER 29,
1997 1996 1995
---------- ------------ ----------------
<S> <C> <C> <C>
Expected tax benefit.............. $(4,563) $(1,201) $(2,655)
State tax benefit, net of federal
taxes............................ (308) (170) (320)
Permanent book/tax differences:
Goodwill........................ 1,100 373 1,000
Stock compensation expense...... 311 -- --
Other........................... 947 -- 113
------- ------- -------
Tax provision/(benefit)........... $(2,513) $ (998) $(1,862)
======= ======= =======
</TABLE>

The Company made cash payments for income taxes of approximately $204,000
and $36,000 for 1997 and 1996, respectively.

8. STOCKHOLDERS' EQUITY

a. Initial Public Offering

On July 23, 1996, the Company completed its initial public offering (the
"Offering") of 4,120,000 shares of its Common Stock at an initial public
offering price of $14.00 per share. The Company's Registration Statement for
4,000,000 shares of Common Stock was filed with the Securities and Exchange
Commission on May 13, 1996 and subsequently declared effective on July 17,
1996. On July 18, 1996, the Company filed an additional registration statement
on Form S-1 with respect to the registration of an additional 120,000 shares
of Common Stock, which registration statement was effective upon filing.

In connection with the Offering, the underwriters were granted a 30-day
option to purchase up to an aggregate of 618,000 additional shares of Common
Stock to cover over-allotments (the "Over-Allotment Option"), which Over-
Allotment Option was exercised on August 16, 1996 with respect to the purchase
of an additional 63,642 shares of Common Stock.

Proceeds from the Offering were approximately $54.5 million (after giving
effect to the exercise of the Over-Allotment Option), after underwriting
discounts and commissions and before expenses. After giving effect to the
redemption of the Preferred Stock (as described below), proceeds from the
Offering were approximately $35.3 million, before expenses.

Prior to the Offering, the Company issued, in privately negotiated
transactions, 79,029 shares of its Class B common stock to certain members of
management. The Company recorded a stock based compensation charge in an
amount of approximately $887,000 attributable to the issuance of such stock

F-19
<PAGE>

COINMACH LAUNDRY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

STOCKHOLDERS' EQUITY--(CONTINUED)
in 1997. In addition, approximately $103,000 of outstanding receivables
relating to loans to management in connection with prior purchases of the
Company's common stock were forgiven and have been accounted for as a stock-
based compensation charge in 1997.

b. Reclassification and Stock Split

In connection with the Offering, the Company approved a reclassification
(the "Reclassification") of all of its capital stock pursuant to which all
seven classes of the previously issued and outstanding capital stock of the
Company prior to the Offering were converted into a class of preferred stock,
a class of voting common stock and a class of non-voting common stock. As part
of the Reclassification, holders of the Company's Class A common stock, Class
E common stock and Class F common stock immediately prior to the Offering
(collectively, the "Preference Shares") also received a distribution
consisting of shares of Common Stock and shares of Series A preferred stock,
par value $.01 per share (the "Preferred Stock"), representing an amount equal
to the sum of: (a) preferred dividends on such Preference Shares in an amount
equal to the accrued yield (at a rate of 8% per annum, compounded quarterly)
on the original investment in such Preference Shares through July 23, 1996;
and (b) an amount equal to the original investment in such Preference Shares.
Holders of Preference Shares who are members of the Company's management
received an aggregate of 28,425 shares of Common Stock, and holders of the
Preference Shares who were not members of the Company's management received an
aggregate of 1,000 shares of Preferred Stock.

In connection with the Reclassification, the Company also approved an
approximate 23-to-1 stock split (the "Stock Split") payable to shareholders of
record of the Company on July 12, 1996.

c. Redemption of Preferred Stock

Immediately following the Offering, approximately $19.2 million of the
proceeds of the Offering were used by the Company to retire all of the issued
and outstanding shares of Preferred Stock.

d. Stock Option Plan

Prior to the Offering, the Company adopted the 1996 Employee Stock Option
Plan (as amended and restated, the "Stock Option Plan") which provides that
the Company may grant options for the purchase of up to 1,109,147 shares of
common stock to key employees of the Company over a period not to exceed ten
years. The Company may grant incentive stock options or options which do not
qualify as incentive stock options at an exercise price per share not less
than 100% of the fair market value of the Common Stock at the date of grant.
All options granted under the Stock Option Plan vest over four years in five
equal installments (20% immediately) and expire ten years from the date of
grant.

The Company has granted 181,250 options to various employees of the Company
pursuant to the Stock Option Plan, through March 28, 1997.

On July 23, 1996, in connection with the Offering, the Company granted
certain nonqualified options (the "Options") to certain members of management
(collectively, the "Option Holders") to purchase up to 735,618 shares of
Common Stock at 85% of the initial offering price of the Common Stock. On
September 17, 1996, for the purpose of preserving the Option Holders'
percentage interest of Common Stock represented by the Options (which
percentage interest was decreased as a result of the exercise of the Over-
Allotment Option), the Company granted to the Option Holders additional
nonqualified stock options to purchase up to 3,819 shares of Common Stock (the
"Additional Options"). The Options and

F-20
<PAGE>

COINMACH LAUNDRY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

STOCKHOLDERS' EQUITY--(CONTINUED)
Additional Options vest in equal annual installments (20% vested immediately
on the date of grant and the remainder over a four year period) commencing on
July 23, 1996, the effective date of the Offering. With respect to Options and
Additional Options granted to employees of Coinmach, Coinmach will record the
difference between the exercise price and the initial offering price of Common
Stock as a stock-based compensation charge over the applicable vesting period.

On September 17, 1996, the Company granted to certain directors each of whom
was appointed by the Board of Directors of the Company on such date to serve
as independent directors, options entitling each such director to purchase up
to 60,000 shares of Common Stock (the "Independent Director Options"). The
Independent Director Options vest in equal annual installments (25% vest
immediately on the date of grant and the remainder over a three year period),
commencing on September 17, 1996, and entitle each such director to purchase
shares of Common Stock at the initial public offering price of the Common
Stock. Coinmach will record the difference between the exercise price of the
Independent Director Options and the fair market value of the Common Stock on
September 17, 1996 as a stock-based compensation charge over the applicable
vesting period.

For the year ended March 28, 1997, the Company has recorded a stock-based
compensation charge of approximately $1,162,000 relating to the Options, the
Additional Options and the Independent Director Options.

The Company has elected to comply with APB No. 25 and related
interpretations in accounting for its employee stock options because the
alternate fair value accounting provided for under SFAS No. 123 requires use
of option valuation models which were not developed for use in valuing such
employee stock options. Under APB No. 25, compensation expense is recognized
only when the exercise price of the Company's employee stock options is less
than the market price of the underlying stock on the date of grant.

In accordance with SFAS No. 123, pro-forma information regarding net loss
and loss per common share has been determined as if the Company had accounted
for its employee stock options under the fair value method required by SFAS
No. 123. The fair value for these options was estimated at the date of each
grant using a Black-Scholes option pricing model with the following weighted
average assumptions for 1997: risk-free interest rate of 6.6%; dividend yields
of 0%, volatility factor of the expected market price of the Company's common
stock of 24.5% and a weighted-average expected life of the options of five
years.

The Black-Scholes option valuation model was developed for use in estimating
the fair value of traded options which have no vesting restrictions and are
fully transferable. In addition, option valuation models require the input of
highly subjective assumptions including the expected stock price volatility.
In management's opinion, the existing models do not necessarily provide a
reliable single measure of the fair value of its employee stock options due to
changes in subjective input assumptions which may materially affect the fair
value estimate, and because the Company's employee stock options have
characteristics significantly different from those of traded options.

For purposes of pro forma disclosures, the estimated fair value of the
options is amortized to expense over the options' vesting periods. The
Company's pro forma net loss and net loss per share as of March 31, 1997 is as
follows:

<TABLE>
<S> <C>
Pro forma net loss............................................ $(10,307,000)
Pro forma net loss per share.................................. $ (1.12)
</TABLE>

F-21
<PAGE>

COINMACH LAUNDRY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

STOCKHOLDERS' EQUITY--(CONTINUED)

SFAS No. 123 is applicable only to options granted subsequent to March 30,
1996 (no options were granted in fiscal 1996).

Information with respect to options for the year ended March 28, 1997 is as
follows:

<TABLE>
<CAPTION>
WEIGHTED
WEIGHTED AVERAGE
AVERAGE FAIR VALUE
EXERCISE OF OPTIONS
OPTIONS PRICE GRANTED
--------- -------- ----------
<S> <C> <C> <C>
Options outstanding--beginning of year........ -- $ -- $ --
Options granted:
Nonqualified options issued at market
price...................................... 181,250 14.00 4.87
Directors' options issued at below market
price...................................... 120,000 14.00 9.36
Nonqualified options issued at below market
price...................................... 739,437 11.90 6.00
Options exercised............................. -- -- --
Options cancelled and expired................. -- -- --
--------- ------ -----
Options outstanding--end of year.............. 1,040,687 $12.51 $6.17
========= ====== =====
Options exercisable at end of year............ 214,151 $12.55 $6.26
========= ====== =====
</TABLE>

Exercise prices for options outstanding as of March 28, 1997 were as follows:

<TABLE>
<CAPTION>
NUMBER
OF RANGE OF
OPTIONS EXERCISE PRICES
------- ----------------
<S> <C>
1,040,687...............................$11.90 to $14.00
</TABLE>

The weighted average remaining contractual life of those options is
approximately 9.2 years.

Shares of Common Stock reserved for future issuance as of March 28, 1997 are
as follows:

<TABLE>
<CAPTION>
NUMBER
OF SHARES
---------
<S> <C>
Stock options................................................... 1,968,584
Conversion shares............................................... 480,648
Convertible notes............................................... 56,466
---------
2,505,698
=========
</TABLE>

9. COMMITMENTS AND CONTINGENCIES

Rental expense for all operating leases, which principally cover office
facilities, laundromats and vehicles, was approximately $2,307, $1,235 and
$1,139 for 1997, 1996T and 1995, respectively (in thousands).

Future minimum rental commitments under all noncancellable operating leases
as of March 28, 1997, are as follows (in thousands):

<TABLE>
<S> <C>
1998............................................................. $ 4,140
1999............................................................. 3,668
2000............................................................. 3,056
2001............................................................. 2,287
2002............................................................. 1,218
2003 and future periods.......................................... 1,096
-------
$15,465
=======
</TABLE>

F-22
<PAGE>

COINMACH LAUNDRY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

COMMITMENTS AND CONTINGENCIES--(CONTINUED)

The Company is contingently liable on receivables sold with recourse to
finance companies. The total amount of such receivables outstanding as of
March 28, 1997 is approximately $1.6 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.

10. FAIR VALUE OF FINANCIAL INSTRUMENTS

Under the provisions of SFAS No. 107, "Disclosures About Fair Value of
Financial Instruments," the Company is required to disclose fair value
information about financial instruments, whether or not recognized in the
balance sheet, for which it is practicable to estimate the value. In cases
where quoted market prices are not available, fair values are based on
estimates using present value or other valuation techniques.

The carrying amounts of cash and cash equivalents, receivables, the New
Credit Facility, the promissory note related to the Kwik Wash Acquisition and
other long-term debt approximates their fair market value at March 28, 1997.
The carrying amount and related estimated fair value for the Company's Senior
Notes at March 28, 1997 (the carrying amount approximated the estimated fair
market at March 29, 1996) are as follows (in thousands):

<TABLE>
<CAPTION>
CARRYING ESTIMATED
AMOUNT FAIR VALUE
-------- ----------
<S> <C> <C>
11 3/4% Senior Notes..................................... $196,655 $216,320
</TABLE>

The fair value of the Senior Notes has been determined through information
obtained from quoted market prices.

11. OTHER ASSETS

In connection with the Company's establishment of a corporate development
office in Charlotte, North Carolina and the relocation of an executive officer
to such office in September 1996, the Company extended a loan to such
executive officer in the principal amount of $500,000 payable in five equal
annual installments commencing in July 1997, with interest accruing at a rate
of 7.5% per annum. The amount of such loan is included in other assets as of
March 28, 1997.

12. SUBSEQUENT EVENTS

Through May 1997, the Company completed certain acquisitions of businesses
or assets of businesses, with purchase prices aggregating approximately $46.0
million, utilizing funds available under the New Credit Facility.

F-23
<PAGE>

COINMACH LAUNDRY CORPORATION AND SUBSIDIARIES

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

CONDENSED CONSOLIDATED BALANCE SHEETS

(IN THOUSANDS OF DOLLARS)

<TABLE>
<CAPTION>
JUNE 27, MARCH 28,
1997 1997(1)
----------- ---------
(UNAUDITED)
<S> <C> <C>
ASSETS:
Cash and cash equivalents................................ $ 19,401 $ 14,729
Receivables, net......................................... 6,467 6,894
Inventories.............................................. 10,304 7,959
Prepaid expenses......................................... 3,993 3,170
Advance rental payments.................................. 43,975 38,472
Property and equipment, less accumulated
depreciation of $48,077 and $42,017..................... 126,855 112,116
Contract rights, less accumulated amortization of
$24,252 and $19,815..................................... 208,367 180,557
Goodwill, less accumulated amortization of $7,204
and $5,574.............................................. 104,246 95,771
Other assets............................................. 12,710 13,253
-------- --------
Total assets............................................. $536,318 $472,921
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY:
Accounts payable......................................... $ 10,746 $8,941
Accrued commissions...................................... 13,090 10,573
Accrued interest......................................... 4,261 9,712
Other accrued expenses................................... 10,339 8,996
Deferred income taxes.................................... 74,570 65,650
11 3/4% Senior Notes..................................... 196,655 196,655
Credit facility.......................................... 188,000 130,000
9 7/8% promissory note................................... 15,000 15,000
Other Long-term debt..................................... 3,463 3,831
Stockholders' equity:
Common stock and capital in excess of par value........ 53,409 53,265
Notes receivable from management....................... (439) (439)
Accumulated deficit.................................... (32,776) (29,263)
-------- --------
Total stockholders' equity............................... 20,194 23,563
-------- --------
Total liabilities and stockholders' equity............... $536,318 $472,921
======== ========
</TABLE>
- --------
(1) The March 28, 1997 Balance Sheet has been derived from the audited
financial statements as of that date.

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

F-24
<PAGE>

COINMACH LAUNDRY CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)

(IN THOUSANDS OF DOLLARS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
THREE MONTHS ENDED
---------------------
JUNE 27, JUNE 28,
1997 1996
--------- ---------
<S> <C> <C>
REVENUES................................................ $ 72,095 $ 47,940
COSTS AND EXPENSES
Laundry operating expenses............................ 48,236 32,580
General and administrative expenses................... 1,489 1,041
Depreciation and amortization......................... 16,475 9,810
Stock-based compensation charge....................... 145 --
--------- ---------
66,345 43,431
--------- ---------
OPERATING INCOME........................................ 5,750 4,509
INTEREST EXPENSE, NET................................... 10,063 6,141
--------- ---------
LOSS BEFORE INCOME TAXES................................ (4,313) (1,632)
--------- ---------
PROVISION (BENEFIT) FOR INCOME TAXES:
Currently payable..................................... 50 50
Deferred.............................................. (850) (450)
--------- ---------
(800) (400)
--------- ---------
NET LOSS................................................ $ (3,513) $ (1,232)
========= =========
NET LOSS PER SHARE...................................... $ (.34)
=========
PRO FORMA NET LOSS PER SHARE............................ $ (.16)
=========
</TABLE>

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

F-25
<PAGE>

COINMACH LAUNDRY CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)

(IN THOUSANDS OF DOLLARS)

<TABLE>
<CAPTION>
THREE MONTHS ENDED
--------------------
JUNE 27, JUNE 28,
1997 1996
--------- ---------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss................................................ $ (3,513) $ (1,232)
Adjustments to reconcile net loss to net cash provided
by operating activities:
Depreciation and amortization.......................... 16,475 9,810
Deferred income taxes.................................. (850) (450)
Stock-based compensation charge........................ 145 --
Amortization of debt discount and debt issuance costs.. 161 130
Increase or decrease in operating assets and
liabilities, net of business acquired:
Decrease (increase) in other assets................... 870 (821)
Decrease in receivables, net.......................... 896 1,109
Increase in inventories and prepaid expenses.......... (1,810) (1,409)
Decrease in accounts payable.......................... (162) (205)
Decrease in accrued interest.......................... (5,451) (4,610)
Increase in accrued expenses, net..................... 1,912 1,494
--------- ---------
Net cash provided by operating activities.............. 8,673 3,816
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property and equipment..................... (9,429) (5,942)
Advance rental payments to location owners.............. (3,639) (2,628)
Additions to net assets related to acquisitions of
businesses............................................. (47,548) (16,722)
--------- ---------
Net cash used for investing activities................. (60,616) (25,292)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Debt transactions:
Net repayments of bank and other borrowings............. (225) 4,887
Deferred debt issuance costs............................ (900) 79
Proceeds from issuance of term loans from credit
facility............................................... 58,000 --
Principal payments on capitalized lease obligations..... (260) (108)
--------- ---------
Net cash provided by financing activities............ 56,615 4,858
--------- ---------
Net increase (decrease) in cash and cash
equivalents......................................... 4,672 (16,618)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD........... 14,729 19,858
--------- ---------
CASH AND CASH EQUIVALENTS, END OF PERIOD................. $ 19,401 $ 3,240
========= =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid........................................... $ 15,428 $ 10,714
========= =========
</TABLE>

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

F-26
<PAGE>

COINMACH LAUNDRY CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1. DESCRIPTION OF BUSINESS

Coinmach Laundry Corporation ("Coinmach Laundry"), a Delaware corporation,
through its wholly-owned subsidiaries (collectively, the "Company"), is
primarily engaged in providing coin-operated laundry equipment services to
multi-family housing properties throughout much of the United States. After
giving effect to the National Coin Acquisition (as hereinafter defined), the
Company owns and operates approximately 414,000 coin-operated washers and
dryers in over 40,000 locations on routes in 31 states, the District of
Columbia and Mexico and in 151 retail laundromats located throughout Texas.
The Company, through its wholly-owned subsidiary, Super Laundry Equipment
Corp., a New York corporation ("Super Laundry"), also is a construction and
laundromat equipment distribution company. On July 17, 1997, the Company
completed the acquisition of the route businesses of National Coin Laundry,
Inc. and Whitmer Vend-O-Mat Laundry Services, Inc. and the distribution
business of National Laundry Equipment Company for an aggregate cash purchase
price of approximately $19.0 million, excluding transaction costs (the
"National Coin Acquisition"). See Note 7, "Subsequent Events." The results of
operations for the three month period ended June 27, 1997 do not take into
account the National Coin Acquisition.

2. BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements of
the Company have been prepared in conformity with generally accepted
accounting principles ("GAAP") for interim financial reporting and pursuant to
the rules and regulations of the Securities and Exchange Commission.
Accordingly, such financial statements do not include all of the information
and footnotes required by GAAP for complete financial statements. GAAP
requires the Company's management to make estimates and assumptions that
affect the amounts reported therein. Actual results could vary from such
estimates. The interim results presented herein are not necessarily indicative
of the results to be expected for the entire year.

In the opinion of management of the Company, these unaudited condensed
consolidated financial statements contain all adjustments of a normal
recurring nature necessary for a fair presentation of the financial statements
for the interim periods presented.

These unaudited condensed consolidated financial statements should be read
in conjunction with the audited consolidated financial statements included in
Coinmach Laundry's Annual Report on Form 10-K for the year ended March 28,
1997.

3. LOSS PER SHARE

Loss per share for the three months ended June 27, 1997 was calculated based
upon the weighted average number of common shares outstanding of 10,484,926.
Pro forma loss per share for the three months ended June 28, 1996 was
calculated based upon the weighted average number of common shares of
7,774,017, which amount gives effect to the transactions discussed in Note 5.

The Company's historical capitalization differs significantly from its
capitalization effective with its July 23, 1996 initial public offering (see
Note 5). Accordingly, historical net loss per common share for the three
months ended June 28, 1996 is not considered by management to be meaningful
and has not been presented. A pro forma net loss per share, on the other hand,
is presented for this period in the accompanying statement of operations. The
calculation of the number of shares used in computing pro forma net loss per
share includes the effect of shares of stock issued and options granted
discussed further in Note 5, as well as the redemption of preferred stock, as
more fully described in Note 5. Pursuant to Securities and Exchange Commission
Staff Accounting Bulletin No. 83, shares of common stock sold or

F-27
<PAGE>

COINMACH LAUNDRY CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

LOSS PER SHARE--(CONTINUED)
issued at prices below the initial public offering price per share in the
twelve months preceding the initial
public offering have been included in the calculation as if outstanding for
the three months ended June 28, 1996.

In February 1997, the FASB issued SFAS No. 128, "Earnings Per Share." This
standard changes the method of calculating earnings per share and will be
effective for periods ending after December 15, 1997. Earlier application is
not permitted; however, when adopted, all prior period earnings per share data
presented will be required to be restated to conform with the new standard.
The Company has determined that the impact of SFAS No. 128 will not have a
material effect on the calculations of earnings per share.

4. LONG-TERM DEBT

At June 27, 1997, Coinmach Corporation ("Coinmach"), a wholly-owned
subsidiary of Coinmach Laundry, had outstanding long-term debt consisting of
(a) approximately $196.7 million of 11 3/4% Senior Notes due 2005 (the "Senior
Notes"), (b) $188 million of term loans, and (c) a $15.0 million 9 7/8%
promissory note due 2004. The outstanding term loans were made pursuant to a
senior financing arrangement obtained by the Company in January, 1997
consisting of a $190 million term loan facility and a $70 million revolving
credit facility (the "New Credit Facility"). Indebtedness under the New Credit
Facility is secured by all of the Company's real and personal property.
Coinmach Laundry has guaranteed the indebtedness under the New Credit Facility
and pledged to Bankers Trust Company, as Collateral Agent, its interests in
all of the issued and outstanding shares of capital stock of Coinmach. In
addition to certain terms and provisions, events of default, and customary
restrictive covenants and agreements, the New Credit Facility contains certain
covenants including, but not limited to, a maximum leverage ratio, a minimum
consolidated interest coverage ratio, and limitations on indebtedness, capital
expenditures, advances, investments and loans, mergers and acquisitions,
dividends, stock issuances and transactions with affiliates. Also, the Senior
Notes and the New Credit Facility limit Coinmach's ability to pay dividends.
At June 27, 1997, there were no amounts outstanding under Coinmach's revolving
credit facility.

5. STOCKHOLDERS' EQUITY

a. Initial Public Offering

On July 23, 1996, Coinmach Laundry completed its initial public offering
(the "Offering") of 4,120,000 shares of its Common Stock at a price of $14.00
per share. Coinmach Laundry's Registration Statement for 4,000,000 shares of
Common Stock was filed with the Securities and Exchange Commission on May 13,
1996 and subsequently declared effective on July 17, 1996. On July 18, 1996,
Coinmach Laundry filed an additional registration statement on Form S-1 with
respect to the registration of an additional 120,000 shares of Common Stock,
which registration statement was effective upon filing.

F-28
<PAGE>

COINMACH LAUNDRY CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

STOCKHOLDERS' EQUITY--(CONTINUED)
Prior to the Offering, Coinmach Laundry issued, in privately negotiated
transactions, 79,029 shares of its Class B common stock to certain members of
management. Coinmach Laundry recorded a stock based compensation charge in an
amount of approximately $887,000, attributable to the issuance of such stock
in July 1996. In addition, approximately $103,000 of outstanding receivables
relating to loans to management in connection with prior purchases of Coinmach
Laundry's common stock were forgiven and was accounted for as a stock-based
compensation charge in July 1996.

b. Reclassification and Stock Split

In connection with the Offering, Coinmach Laundry approved a
reclassification (the "Reclassification") of all of its capital stock,
pursuant to which all seven classes of the previously issued and outstanding
capital stock of Coinmach Laundry prior to the Offering were converted into a
class of preferred stock, a class of voting common stock and a class of non-
voting common stock. As part of the Reclassification, holders of Coinmach
Laundry's Class A common stock, Class E common stock and Class F common stock
immediately prior to the Offering (collectively, the "Preference Shares") also
received a distribution consisting of shares of Common Stock and shares of
Series A preferred stock, par value $.01 per share (the "Preferred Stock")
representing an amount equal to the sum of: (a) preferred dividends on such
Preference Shares in an amount equal to the accrued yield (at a rate of 8% per
annum, compounded quarterly) on the original investment in such Preference
Shares through July 23, 1996; and (b) an amount equal to the original
investment in such Preference Shares. Holders of Preference Shares who were
members of the Company's management received an aggregate of 28,425 shares of
Common Stock, and holders of the Preference Shares who were not members of the
Company's management received an aggregate of 1,000 shares of Preferred Stock.
In connection with the Reclassification, Coinmach Laundry also approved an
approximate 23-to-1 stock split (the "Stock Split") payable to shareholders of
record of Coinmach Laundry on July 12, 1996.

c. Redemption of Preferred Stock

Immediately following the Offering, approximately $19.2 million of the
proceeds of the Offering were used by the Company to retire all of the issued
and outstanding shares of Preferred Stock.

d. Stock Option Plan

Prior to the Offering, the Company adopted the 1996 Employee Stock Option
Plan (as amended and restated, the "Stock Option Plan") which provides that
the Company may grant options for the purchase of up to 1,109,147 shares of
Common Stock to key employees of the Company over a period not to exceed ten
years. The Company may grant incentive stock options or options which do not
qualify as incentive stock options at an exercise price per share not less
than 100% of the fair market value of the Common Stock at the date of grant.
All options granted under the Stock Option Plan vest over four years in five
equal installments (20% vest immediately on the date of grant and the
remainder over a four year period) and expire ten years from the date of
grant.

The Company has granted 181,250 options to various employees of the Company
pursuant to the Stock Option Plan, through June 27, 1997.

On July 23, 1996, in connection with the Offering, Coinmach Laundry granted
certain non-qualified options (the "Options") to certain members of management
(collectively, the "Option Holders") to purchase up to 735,618 shares of
Common Stock at 85% of the initial offering price of the Common Stock. On
September 17, 1996, for the purpose of preserving the Option Holders'
percentage interest of Common Stock represented by the Options (which
percentage interest was decreased as a result of the

F-29
<PAGE>

COINMACH LAUNDRY CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

STOCKHOLDERS' EQUITY--(CONTINUED)
exercise of the Over-Allotment Option), Coinmach Laundry granted to the Option
Holders additional non-qualified stock options to purchase up to 3,819 shares
of Common Stock (the "Additional Options"). The Options and Additional Options
vest in equal annual installments (20% vest immediately on the date of grant
and the remainder over a four year period) commencing on July 23, 1996, the
effective date of the Offering. With respect to Options and Additional Options
granted to employees of the Company, the Company will record the difference
between the exercise price and the initial offering price of Common Stock as a
stock-based compensation charge over the applicable four year vesting period.

On September 17, 1996, Coinmach Laundry granted to certain directors, each
of whom was appointed by the Board of Directors of Coinmach Laundry on such
date to serve as independent directors, options entitling each such director
to purchase up to 60,000 shares of Common Stock (the "Independent Director
Options"). The Independent Director Options vest in equal annual installments
(25% vest immediately on the date of grant and the remainder over a three year
period), commencing on September 17, 1996, and entitle each such director to
purchase shares of Common Stock at the initial public offering price of the
Common Stock. The Company will record the difference between the exercise
price of the Independent Director Options and the fair market value of the
Common Stock on September 17, 1996 as a stock-based compensation charge over
the applicable three year vesting period.

For the three months ended June 27, 1997, the Company has recorded a stock-
based compensation charge of approximately $145,000 relating to the Options,
the Additional Options and the Independent Director Options.

6. ACQUISITION

On April 23, 1997, pursuant to the terms and conditions of a Merger
Agreement dated as of March 20, 1997, Coinmach completed the acquisition and
merger of Reliable Holding Corp. ("Reliable") and its subsidiaries, Reliable
Laundry Service Inc., Girard-Hopkins Acquisition Corp., Maquilados Automaticas
S.A. de C.V., and Automatica S.A. de C.V. (collectively, the "Reliable
Entities") with and into Coinmach, for $44 million in cash (excluding
transaction expenses). The Reliable Entities provide coin-operated laundry
equipment services to multi-family dwellings in California and Mexico.

7. SUBSEQUENT EVENT

On July 17, 1997, the Company consummated the National Coin Acquisition,
pursuant to which Coinmach acquired 100% of the outstanding voting securities
of National Coin Laundry Holding, Inc., an Ohio Corporation ("NCLH") and
National Laundry Equipment Company, an Ohio corporation ("NLEC"). NCLH is the
parent of National Coin Laundry, Inc., an Ohio corporation ("NCL"). In a
related transaction, the Company acquired substantially all of the assets of
Whitmer Vend-O-Mat Laundry Services, Inc., an Indiana corporation ("Whitmer")
that is an affiliate of NCLH, NLEC and NCL. Coinmach acquired NCLH, NLEC, NCL
and Whitmer (collectively, the "NCL Entities") for an aggregate purchase price
of approximately $19.0 million in cash. The NCL Entities provide coin-operated
laundry equipment services to multi-family dwellings in the states of Ohio,
Indiana, Kentucky, Michigan, West Virginia, Pennsylvania, Georgia, Tennessee,
Illinois and Florida, as well as distributing exclusive lines of commercial
coin and non-coin laundry machines and parts, and selling service contracts.
Subsequent to the acquisition of Whitmer and of the other NCL Entities, such
other entities were merged with and into Coinmach.

F-30
<PAGE>

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

NO PERSON HAS BEEN AUTHORIZED IN CONNECTION WITH THE OFFERING MADE HEREBY TO
GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PRO-
SPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY, THE SELLING STOCKHOLDERS
OR ANY UNDERWRITER. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF ANY OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY TO ANY
PERSON OR BY ANYONE IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL TO MAKE SUCH
OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE
MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT IN-
FORMATION CONTAINED HEREIN IS CORRECT AS OF ANY DATE SUBSEQUENT TO THE DATE
HEREOF.

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

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary....................................................... 3
Risk Factors............................................................. 9
The Company.............................................................. 13
Use of Proceeds.......................................................... 15
Price Range of Common Stock.............................................. 15
Dividend Policy.......................................................... 16
Dilution................................................................. 17
Capitalization........................................................... 18
Unaudited Pro Forma Financial Data....................................... 19
Selected Historical Consolidated Financial Data.......................... 25
Management's Discussion and Analysis of Financial Condition and Results
of Operations........................................................... 27
Business................................................................. 33
Management............................................................... 41
Principal and Selling Stockholders....................................... 43
Description of Capital Stock............................................. 45
Shares Eligible for Future Sale.......................................... 48
Underwriting............................................................. 50
Legal Matters............................................................ 52
Experts.................................................................. 52
Available Information.................................................... 52
Incorporation of Certain Information by Reference........................ 53
Index to Consolidated Financial
Statements.............................................................. F-1
</TABLE>

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

3,750,000 Shares

LOGO

Common Stock

-----------

PROSPECTUS

-----------

BT Alex. Brown

Lehman Brothers

Raymond James & Associates, Inc.

Wheat First Butcher Singer

Jefferies & Company, Inc.

, 1997

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The following table sets forth all expenses payable by the Company (other
than underwriting discounts and commissions) in connection with the sale of
the Common Stock being registered. All of such expenses, other than the filing
fees for the Commission and the NASD, are estimates.

<TABLE>
<S> <C>
Securities and Exchange Commission registration fee................ *
National Association of Securities Dealers fee..................... *
Blue sky fees and expenses (including attorneys' fees and
expenses)......................................................... *
Printing and engraving expenses.................................... *
Transfer agent's fees and expenses................................. *
Accounting fees and expenses....................................... *
Legal fees and expenses............................................ *
Miscellaneous fees and expenses.................................... *
----
Total............................................................ *
====
</TABLE>
- --------
* To be filed by Amendment.

ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

The Company's Second Amended and Restated Bylaws provide that the Company
shall indemnify and hold harmless, to the fullest extent which it is empowered
to do so unless prohibited from doing so by the Delaware General Corporation
Law, as it exists or may hereafter be amended (but, in the case of any such
amendment, only to the extent that such amendment permits the corporation to
provide broader indemnification rights than said law permitted the corporation
to provide prior to such amendment), any person who was or is a party or is
threatened to be made a party to or is otherwise involved (including
involvement as a witness) in any action, suit, or proceeding, whether civil,
criminal, administrative or investigative, by reason of the fact that he or
she was a director or officer of the Company, or while a director or officer
of the Company, is or was serving at the request of the Company as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust, or other enterprise, including service with respect to an employee
benefit plan, against all expenses, liabilities, damages, actions, cost of
attachment or similar bonds, claims and losses (including without limitation
costs of investigating, preparing or defending any such claim or action and
attorney's fees and disbursements, judgments, fines, or penalties and amounts
paid in settlement) and any expenses of establishing a right to
indemnification reasonably incurred or suffered by such person in connection
therewith and that such indemnification shall continue as to any such person
who has ceased to be a director, officer, employee or agent and shall inure to
the benefit of such person's heirs, executors and administrators; and that the
Company may, by action of its board of directors, provide indemnification to
employees and agents of the Company with the same scope and effect as
indemnification of directors and officers.

Section 145 of the Delaware General Corporation Law provides that a
corporation may indemnify any person who was or is a party or is threatened to
be made a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative (other
than an action by or in the right of the corporation) by reason of the fact
that he is or was a director, officer, employee or agent of the corporation,
or is or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, against expenses (including attorneys' fees), judgments,
fines and amounts paid in settlement actually and reasonably incurred by him
in connection with such action, suit or proceeding if he acted in good faith
and in a manner he reasonably believed to be in or not opposed to the best
interest of the corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful; and
further that a corporation may indemnify such person against expenses
(including

II-1
<PAGE>

attorneys' fees) actually and reasonably incurred by him in connection with
the defense or settlement of such action or suit if he acted in good faith and
in a manner he reasonably believed to be in or not opposed to the best
interests of the corporation, except that no indemnification shall be made in
respect of any claim, issue or matter as to which such person shall have been
adjudged to be liable to the corporation unless and only to the extent that
the Court of Chancery or the court in which such action or suit was brought
shall determine upon application that, despite the adjudication of liability
but in view of all the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses which the Court of Chancery
or such other court shall deem proper. To the extent that a director, officer,
employee or agent of a corporation has been successful on the merits or
otherwise in defense of any such action, suit or proceeding, or in defense of
any claim, issue or matter therein, he shall be indemnified against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection therewith.

The Second Amended and Restated Bylaws further provide that the Company
shall indemnify any such person seeking indemnification in connection with a
proceeding initiated by such person only if such proceeding was authorized by
the board of directors of the Company, except that it shall be a defense to
any such action (other than an action brought to enforce a claim for expenses
incurred in defending any proceeding in advance of its final disposition where
the required undertaking, if any, has been tendered to the Company) that the
claimant has not met the standards of conduct (as set forth above) which make
it permissible under the Delaware General Corporation Law for the Company to
indemnify the claimant for the amount claimed, but the burden of such defense
shall be on the Company.

The Second Amended and Restated Bylaws further provide that the right to
indemnification shall be a contract right and shall include the right to be
paid by the Company for the expenses incurred in defending any such proceeding
in advance of its final disposition unless otherwise determined by the board
of directors of the Company in the specific case upon receipt of an
undertaking by or on behalf of the director or officer to repay such amount if
it shall ultimately be determined that he or she is not entitled to be
indemnified by the Company; and that such expenses incurred by other employees
and agents may be so paid upon such terms and conditions, if any, as the board
of directors of the Company deems appropriate. The rights conferred in the
Second Amended and Restated Bylaws to indemnification and the payment of
expenses incurred in defending a proceeding in advance of its final
disposition are not exclusive of any other right which any person may have or
hereafter acquire under any statute, provision of the certificate of
incorporation, by-law, agreement, vote of stockholders or disinterested
directors or otherwise.

Section 102 of the Delaware General Corporation Law allows a corporation to
eliminate or limit the personal liability of a director of a corporation to
the corporation or to any of its stockholders for monetary damage for a breach
of fiduciary duty as a director, except in the case where the director (i)
breaches his duty of loyalty to the corporation or its stockholders, (ii)
fails to act in good faith, engages in intentional misconduct or knowingly
violates a law, (iii) authorizes the payment of a dividend or approves a stock
purchase or redemption in violation of Section 174 of the Delaware General
Corporation Law or (iv) obtains an improper personal benefit. Article Eleven
of the Company's Third Amended and Restated Certificate of Incorporation
includes a provision which eliminates directors' personal liability to the
fullest extent permitted under the Delaware General Corporation Law.

The Company has purchased director and officer liability insurance for its
directors and officers.

II-2
<PAGE>

ITEM 16. EXHIBITS

(a) Exhibits

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
1.1* Underwriting Agreement
4.1 Third Amended and Restated Certificate of Incorporation of the Company
(incorporated by reference from exhibit number 3.1 to Coinmach's Form
10-Q for the quarterly period ended September 27, 1996, File number 1-
11907 file number 333-00620)
4.2 Second Amended and Restated Bylaws of the Company (incorporated by
reference from exhibit number 3.1 to Coinmach's Form 10-Q for the
quarterly period ended September 27, 1996, file number 1-11907)
5.1* Form of Opinion and Consent of Anderson Kill & Olick, P.C. regarding
the validity of the Common Stock
10.1* Asset Purchase Agreement dated July 17, 1997 by and among Whitmer
Vend-O-Mat Laundry Services, Inc., Stephen P. Close, Kimberly A.
Close, Ruth D. Close, Kimberly A. Close, Ruth D. Close and Stephen P.
Close, as trustees of the Alvin D. Close Trust, SPC Management, Inc.
and Coinmach Corporation
10.2* Stock Purchase Agreement dated July 17, 1997 by and among Kimberly A.
Close, Stephen P. Close, Ruth D. Close, Kimberly A. Close, Ruth D.
Close and Stephen P. Close, as trustees of the Alvin D. Close Trust,
National Coin Laundry Holding, Inc., National Coin Laundry Inc.,
National Laundry Equipment Company and Coinmach Corporation
10.3* Second Amendment and Waiver dated as of October 7, 1997 to the Credit
Agreement dated as of January 8, 1997, as amended, among Coinmach
Corporation, Coinmach Laundry Corporation, the Banks party thereto,
Bankers Trust Company, as Administrative Agent, First Union National
Bank of North Carolina, as Syndication Agent and Lehman Commercial
Paper, Inc., as Documentation Agent
23.1* Consent of Ernst & Young LLP
23.2* Consent of Anderson Kill & Olick, P.C. (Included in Exhibit 5.1)
27.1 Financial Data Schedule
</TABLE>
- --------
* To be filed by amendment.

ITEM 17. UNDERTAKINGS.

The Company (or the "Registrant") hereby undertakes that:

(1) for purposes of determining any liability under the Securities Act,
the information omitted from the form of prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective; and

(2) for the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.

Insofar as indemnification for liabilities arising under the Securities Act
of 1933, as amended, may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act of 1933, as amended, and, is therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant in the successful defense of
any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being

II-3
<PAGE>

registered, the Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act of 1933, as amended,
and will be governed by the final adjudication of such issue.

The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.

II-4
<PAGE>

SIGNATURES

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE
REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED, IN THE CITY OF ROSLYN, STATE OF NEW YORK ON OCTOBER 14, 1997.

COINMACH LAUNDRY CORPORATION

/s/ Stephen R. Kerrigan
By: _________________________________
STEPHEN R. KERRIGAN CHIEF
EXECUTIVE OFFICER

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS REGISTRATION
STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN THE CAPACITIES
INDICATED ON OCTOBER 14, 1997.

SIGNATURE TITLE

/s/ STEPHEN R. KERRIGAN Chairman of the Board of Directors
- ------------------------------------- and Chief Executive Officer
STEPHEN R. KERRIGAN (Principal Executive Officer)

/s/ MITCHELL BLATT Director, President and Chief
- ------------------------------------- Operating Officer
MITCHELL BLATT

/s/ ROBERT M. DOYLE Chief Financial Officer and Senior
- ------------------------------------- Vice President (Principal Financial
ROBERT M. DOYLE and Accounting Officer)

/s/ JOHN E. DENSON Senior Vice President
- -------------------------------------
JOHN E. DENSON

/s/ MICHAEL E. STANKY Senior Vice President
- -------------------------------------
MICHAEL E. STANKY

/s/ DAVID A. DONNINI Director
- -------------------------------------
DAVID A. DONNINI

II-5
<PAGE>

/s/ JAMES N. CHAPMAN Director
- -------------------------------------
JAMES N. CHAPMAN

/s/ BRUCE V. RAUNER Director
- -------------------------------------
BRUCE V. RAUNER

/s/ ARTHUR B. LAFFER Director
- -------------------------------------
ARTHUR B. LAFFER

/s/ STEPHEN G. CERRI Director
- -------------------------------------
STEPHEN G. CERRI

II-6
<PAGE>

INDEX TO EXHIBITS

<TABLE>
<CAPTION>
SEQUENTIAL
EXHIBIT PAGE
NUMBER DESCRIPTION NUMBER
------- ----------- ----------
<C> <S> <C>
1.1* Underwriting Agreement...................................
4.1 Third Amended and Restated Certificate of Incorporation
of the Company (incorporated by reference from exhibit
number 3.1 to Coinmach's Form 10-Q for the quarterly
period ended September 27, 1996, file number 1-11907)....
4.2 Second Amended and Restated Bylaws of the Company
(incorporated by reference from exhibit number 3.1 to
Coinmach's Form 10-Q for the quarterly period ended
September 27, 1996, file number 1-11907).................
5.1* Opinion and Consent of Anderson Kill & Olick, P.C.
regarding the validity of the Common Stock...............
10.1* Asset Purchase Agreement dated July 17, 1997 by and among
Whitmer Vend-O-Mat Laundry Services, Inc., Stephen P.
Close, Kimberly A. Close, Ruth D. Close, Kimberly A.
Close, Ruth D. Close and Stephen P. Close, as trustees of
the Alvin D. Close Trust, SPC Management, Inc. and
Coinmach Corporation.....................................
10.2* Stock Purchase Agreement dated July 17, 1997 by and among
Kimberly A. CLose, Stephen P. Close, Ruth D. Close,
Kimberly A. Close, Ruth D. Close and Stephen P. Close, as
trustees of the Alvin D. Close Trust, National Coin
Laundry Holding, Inc., National Coin Laundry, Inc.,
National Laundry Equipment Company and Coinmach
Corporation..............................................
10.3* Second Amendment and Waiver dated as of October 7, 1997
to the Credit Agreement dated as of January 8, 1997, as
amended, among Coinmach Corporation, Coinmach Laundry
Corporation, the Banks party thereto, Bankers Trust
Company, as Administrative Agent, First Union National
Bank of North Carolina, as Syndication Agent and Lehman
Commercial Paper, Inc., as Documentation Agent...........
23.1* Consent of Ernst & Young LLP.............................
23.2* Consent of Anderson Kill & Olick, P.C. (Included in
Exhibit 5.1).............................................
27.1 Financial Data Schedule..................................
</TABLE>
- --------
* To be filed by amendment.

<PAGE>

<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FORM
S-3 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATE-
MENTS.
</LEGEND>
<MULTIPLIER> 1,000

<S> <C> <C>
<PERIOD-TYPE> 12-MOS 3-MOS
<FISCAL-YEAR-END> MAR-28-1997 MAR-27-1998
<PERIOD-START> MAR-30-1996 MAR-29-1997
<PERIOD-END> MAR-28-1997 JUN-27-1997
<CASH> 14,729 19,401
<SECURITIES> 0 0
<RECEIVABLES> 6,894 6,467
<ALLOWANCES> 0 0
<INVENTORY> 7,959 10,304
<CURRENT-ASSETS> 0 0
<PP&E> 154,133 174,932
<DEPRECIATION> 42,017 48,077
<TOTAL-ASSETS> 472,921 536,318<F1>
<CURRENT-LIABILITIES> 0 0
<BONDS> 341,655 399,655<F2>
0 0
0 0
<COMMON> 53,265 53,409
<OTHER-SE> (29,702) (33,215)
<TOTAL-LIABILITY-AND-EQUITY> 472,921 536,318<F3>
<SALES> 0 0
<TOTAL-REVENUES> 206,852 72,095
<CGS> 0 0
<TOTAL-COSTS> 139,446 48,236
<OTHER-EXPENSES> 53,081 18,109<F4>
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 26,859 10,063
<INCOME-PRETAX> (12,534) (4,313)
<INCOME-TAX> (2,307) (800)<F5>
<INCOME-CONTINUING> (10,227) (3,513)
<DISCONTINUED> 0 0
<EXTRAORDINARY> (296) 0
<CHANGES> 0 0
<NET-INCOME> (10,523) (3,513)<F6>
<EPS-PRIMARY> (1.14) (.34)
<EPS-DILUTED> 0 0
<FN>
<F1> Includes Advance Rental Payments of $38,472 and $43,975, Contract Rights of $180,557 and $208,367,
and Goodwill of $95,771 and $104,246, each net of accumulated amortization, for the year ended March
28, 1997 and the three months ended June 27, 1997, respectively.
<F2> Includes $196,655 of 11 3/4% senior notes and a promissary note of $15,000, as well as debt
outstanding under a credit facility of $130,000 and $188,000 for the year ended March 28, 1997 and
the three months ended June 27, 1997.
<F3> Includes Accrued Commissions of $10,573 and $13,090 and Accrued Interest of $9,712 and $4,261, for
the year ended March 28, 1997 and the three months ended June 27, 1997, respectively.
<F4> Other Expenses include stock based compensation charges of $2,152 and $145 for the year ended
March 28, 1997 and the three months ended June 27, 1997, respectively.
<F5> The provision (benefit) for income taxes consists of $200 and $50 currently payable and
($2,507) and ($850) deferred, for the year ended March 28, 1997 and the three months ended June 27,
1997, respectively.
<F6> In addition, EBITDA (earnings before interest, income taxes, depreciation and amortization) of
$62,793 and $22,370 (before the deduction for the stock-based compensation charge) was generated for
the reported periods. EBITDA is a meaningful measure of a company's ability to service debt.
</FN>

</TABLE>