GENERAL ROOFING SERVICES INC, S-1/A, 1998-07-31

GENERAL ROOFING SERVICES INC
S-1/A, 1998-07-31
CONSTRUCTION - SPECIAL TRADE CONTRACTORS

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<PAGE> 1

As filed with the Securities And Exchange Commission on July 31, 1998.

Registration No. 333-53641
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------

AMENDMENT NO. 3

TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------------

GENERAL ROOFING SERVICES, INC.
(Exact name of registrant as specified in its charter)
---------------------

<TABLE>
<S> <C> <C>
FLORIDA 1761 65-0836979
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation or organization) Classification Code Number) Identification Number)
</TABLE>

951 SOUTH ANDREWS AVENUE
POMPANO BEACH, FLORIDA 33069
(954) 942-3550
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)

GREGG E. WALLICK
PRESIDENT AND CHIEF EXECUTIVE OFFICER
GENERAL ROOFING SERVICES, INC.
951 SOUTH ANDREWS AVENUE
POMPANO BEACH, FLORIDA 33069
(954) 942-3550
(Name, address, including zip code, and telephone number, including area code,
of agent for service)

COPIES TO:

<TABLE>
<S> <C>
ANDREW HULSH, ESQ. JEFFREY M. STEIN, ESQ.
BAKER & MCKENZIE KING & SPALDING
1200 BRICKELL AVENUE, SUITE 1900 191 PEACHTREE STREET, N.E.
MIAMI, FLORIDA 33131 ATLANTA, GEORGIA 30303
(305) 789-8900 (404) 572-4600
</TABLE>

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As
promptly as practicable after this Registration Statement becomes effective.

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, please 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. [ ]
---------------------

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, AS AMENDED, OR UNTIL THIS 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> 2

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4,000,000 SHARES

(GENERAL ROOFING SERVICES LOGO)

COMMON STOCK

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

All of the 4,000,000 shares of Common Stock, par value $.01 per share (the
"Common Stock"), offered hereby (the "Offering") are being sold by General
Roofing Services, Inc. ("GRS" or the "Company").

Prior to the Offering there has been no public market for the Common Stock.
It is currently anticipated that the initial public offering price will be
between $13.00 and $15.00 per share. See "Underwriting" for a discussion of the
factors considered in determining the initial public offering price of the
Common Stock. The Company's Common Stock has been approved for quotation on the
Nasdaq Stock Market's National Market under the symbol "ROOF."

SEE "RISK FACTORS" BEGINNING ON PAGE 11 FOR A DISCUSSION OF CERTAIN
INFORMATION THAT SHOULD BE CONSIDERED IN CONNECTION WITH AN INVESTMENT IN THE
COMMON STOCK OFFERED HEREBY.

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

<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC DISCOUNT(1) COMPANY(2)
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<S> <C> <C> <C>
Per Share............................... $ $ $
- ----------------------------------------------------------------------------------------------------------------
Total(3)................................ $ $ $
- ----------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
</TABLE>

(1) See "Underwriting" for a description of the indemnification arrangements
with the Underwriters.
(2) Before deducting expenses of the Offering payable by the Company estimated
to be $ .
(3) The Company has granted the Underwriters a 30-day option to purchase up to
600,000 additional shares of Common Stock, solely to cover over-allotments,
if any. If such option is exercised in full, the total Price to Public,
Underwriting Discount and Proceeds to Company will be $ , $ and
$ , respectively. See "Underwriting."

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

The shares of Common Stock are offered severally by the Underwriters named
herein subject to prior sale when, as and if received and accepted by the
Underwriters, subject to their right to reject orders, in whole or in part, and
to certain other conditions. It is expected that delivery of the certificates
will be made against payment therefor at the office of The Robinson-Humphrey
Company, LLC, Atlanta, Georgia, on or about 1998.

THE ROBINSON-HUMPHREY COMPANY
BANCAMERICA ROBERTSON STEPHENS
RAYMOND JAMES & ASSOCIATES, INC.

, 1998
<PAGE> 3

CERTAIN PERSONS PARTICIPATING IN THE OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE COMMON STOCK,
INCLUDING PURCHASES OF THE COMMON STOCK TO STABILIZE ITS MARKET PRICE, PURCHASES
OF THE COMMON STOCK TO COVER SOME OR ALL OF A SHORT POSITION IN THE COMMON STOCK
MAINTAINED BY THE UNDERWRITERS AND THE IMPOSITION OF PENALTY BIDS. FOR A
DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING."
<PAGE> 4

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by reference to, and
should be read in conjunction with, the more detailed information and the
financial statements, including the related notes thereto, appearing elsewhere
in this Prospectus. Concurrently with, and as a condition to, the Offering, the
Company plans to acquire (the "Combination") 18 commercial roofing companies
(the "Founding Companies"). See "The Company" for a detailed listing of the
Founding Companies. Unless the context otherwise requires, (i) the "Company" or
"GRS" refers to General Roofing Services, Inc. and the Founding Companies, and
assumes that the Combination has been consummated and (ii) the information in
this Prospectus assumes that the Underwriters' over-allotment option has not
been exercised.

THE COMPANY

General Roofing Services, Inc. (the "Company" or "GRS") was founded in 1998
to become the leading nationwide provider of commercial roofing services.
Concurrently with, and as a condition to, the Offering, GRS plans to acquire 18
leading commercial roofing companies (the "Founding Companies"). The Founding
Companies, which have been in business for an average of approximately 28 years,
had pro forma combined 1997 revenues and income from operations of approximately
$195.9 million and $13.4 million, respectively. Following the Combination and
the Offering, the Company will have operations in 20 cities in 12 states, and
will be one of the largest providers of commercial roofing services in the
United States. Combined historical revenues of the Founding Companies grew at a
compound annual growth rate of 14.7% from 1995 through 1997. Management believes
that the Company will have certain competitive advantages as the first public
company seeking to consolidate the commercial roofing industry.

The Company offers a broad range of comprehensive roofing services, which
include re-roofing, restoration and repair, and new roof construction.
Approximately 65% of the Company's 1997 pro forma revenues were derived from
re-roofing, restoration and repair services, and 35% were derived from new roof
construction. The Company also offers maintenance services, which provide
recurring revenues and ongoing interaction with its customers. The Company
provides services to customers in a broad range of industries, including the
industrial, office, retail, hospitality, government, educational and
entertainment industries. The Company has performed services for a broad range
of companies, including The Home Depot, Inc., The Walt Disney Company, U.S.
Postal Service, NationsBank, N.A., Bass Hotels & Resorts (Holiday Inn Hotels),
Sea World, AMC Entertainment Inc., General Motors Corporation, Rockwell
International Corp., Ford Motor Company, Chrysler Corporation, The Coca-Cola
Company, U.S. Army, U.S. Navy, Simon DeBartolo Group, Inc., Wal-Mart Stores,
Inc., Sears Roebuck & Company, Abbott Laboratories, Inc., Trammel Crow Company,
Arvida Company, Cushman & Wakefield, Inc., Columbia/HCA Healthcare Corporation,
and The University of Michigan.

The Company believes that its size, geographic diversity of operations,
knowledge of local markets and industry relationships will give the Company
significant competitive advantages. Through increased size, the Company believes
that it will have a greater ability to (i) provide services to customers with
locations in multiple markets, (ii) more effectively allocate resources to serve
customers in each of its markets, (iii) attract, train and retain skilled
roofing labor and (iv) achieve economies of scale in the purchase of roofing
materials. The Company also believes that increased size will provide operating
and cost efficiencies by allowing it to perform a wide range of functions on a
centralized basis, including administrative functions, such as those relating to
human resources, employee benefits and insurance, as well as purchasing,
accounting and bonding. The Company intends to share best practices among the
Founding Companies and with other companies that it may acquire. The Company
believes that the geographic diversity of its operations will diminish the
effects of local market downturns, offer opportunities to pursue growth in its
existing markets and create a base of expertise and relationships to expand into
new markets. In anticipation of the Combination, one of the Founding Companies
has made a substantial investment in a scalable, advanced enterprise information
system to be utilized by the Company, which will provide critical project status
and cost information to all employees on a daily basis and will provide
management with comprehensive reports on substantially all aspects of the
Company's operations.

3
<PAGE> 5

The Company plans to leverage its experienced management and extensive
relationships within the commercial roofing industry to increase its revenues
through internal growth as well as through the acquisition of additional
commercial roofing companies. The Company has extensive relationships within the
industry, in part through the Founding Companies, all of which are members of
the National Roofing Contractor's Association (the "NRCA"), the largest roofing
trade organization with approximately 3,200 commercial roofing companies as
members. Gregg E. Wallick, the Company's Chairman of the Board, President and
Chief Executive Officer, with more than 18 years of experience in the commercial
roofing industry, is a member of the Board of Directors of the NRCA. Mr. Wallick
is also a member of the Board of Governors of the Alliance for Progress and is a
member of its Steering Committee. The Alliance for Progress is an industry
organization that invests funds contributed by its membership in certain
programs, such as special training programs, for the benefit of the roofing
industry and the organization's membership.

According to a market survey conducted by the NRCA, total expenditures for
roofing services in the United States in 1997 were approximately $20.0 billion,
of which approximately $14.5 billion were for commercial roofing services. The
roofing industry is highly fragmented, and is estimated to be comprised of more
than 25,000 companies, most of which are small, owner-operated, independent
contractors serving a local customer base, with limited access to capital for
investment in infrastructure, technology and expansion. The Company believes
that no single company accounted for more than 1% of total expenditures for
roofing services in the United States. According to the NRCA market survey,
approximately 75% of roofing expenditures in 1997 were attributable to
re-roofing, restoration and repair, with the balance attributable to new roof
construction.

The Company believes that its business strategy will enable it to continue
its growth in existing markets and, together with its relative size and
recognition within the industry, enable it to achieve its goal of maintaining
and expanding its position as a leading national provider of commercial roofing
services. Key elements of the Company's strategy are to:

Focus on Commercial Roofing Market. The Company intends to continue
to focus on the commercial roofing market because of its size, the
magnitude of individual projects, the diverse and multiple-location
customer base, the trend of consolidation in commercial real estate,
recurring revenue opportunities and the potential for long-term
relationships with building owners, property managers, general contractors
and roof consultants.

Establish Regional and National Market Coverage. The Company believes
that the growth of many of the Founding Companies has been restricted due
to the geographic limitations of their existing operations and that the
Company's broad geographic coverage will increase internal growth
opportunities. The Company intends to leverage its geographic diversity to
solicit additional business from existing customers and new business from
new customers that operate on a regional and national basis, such as real
estate investment trusts ("REITs"), contractors, owners of national chains
and roof consultants. The Company believes that significant demand exists
from such companies to utilize the services of a single commercial roofing
service provider and that existing local and regional relationships can be
expanded as the Company develops a nationwide network.

Expand Maintenance Services. The Company intends to further develop
its maintenance service operations, which generally provide higher gross
margins, recurring revenues and ongoing interaction with customers. The
Company has adopted a maintenance-oriented approach, whereby it performs
regularly-scheduled maintenance checks and focuses on increasing customer
awareness of the cost-effectiveness of preventive maintenance and the
available repair and restoration services that can most efficiently prolong
the life of a roof. The Company believes that this approach builds
long-term relationships with customers and encourages them to turn to the
Company for all of their roofing needs.

information on a daily basis regarding project estimates, materials and
labor cost, accounts receivable and accounts payable tracking, project
progress and sales, as well as comprehensive reports on substantially all
aspects of the Company's operations. Management believes that this system,
which was developed by one of the Founding Companies over a five-year
period, will provide the Company with significant competitive advantages
through more accurate job estimates, enhanced cost awareness and uniform
control procedures through the timely flow of comprehensive project
information. Management believes that this advanced enterprise information
system will be fully implemented and accessible on a Company-wide basis by
the end of 1999.

Adopt Best Practices. The Company believes that it will be able to
increase operating efficiencies and enhance internal growth by identifying
and incorporating the operational and marketing strengths of individual
Founding Companies. The Company intends to institute a "best practices"
program, which will evaluate and implement on a Company-wide basis selected
policies, practices and procedures of the Founding Companies and other
companies that may be acquired, with the goal of maximizing service levels
and profitability. In order to ensure that best practices are shared among
each of the individual Founding Companies, the Company has created a
Presidents' Council composed of the president or senior executive of each
of the Founding Companies. The Council has begun meeting on a regular basis
as a group and through smaller working committees, to share operating
practices and to develop additional methods to improve the overall
performance of the Company and the individual operating companies. Best
practices that result from the work of the Council will be included in the
training and monitoring programs developed and disseminated to the
respective operating companies.

Operate on a Decentralized Basis. The Company believes that, while
maintaining strong operating and financial controls, a decentralized
operating structure will retain the entrepreneurial spirit present in each
of the Founding Companies. The Company's decentralized operating structure
will allow it to capitalize on the considerable local and regional market
knowledge and customer relationships possessed by each Founding Company, as
well as by companies that may be acquired in the future.

Grow through Acquisitions. The Company believes that, due to the
highly fragmented nature of the commercial roofing industry, it has
significant opportunities to pursue an acquisition strategy and expand in
targeted geographic markets. The Company intends to focus on acquiring
profitable companies with an established customer base and a reputation for
quality that will serve as a platform for the acquisition and integration
of smaller companies. The Company will also seek to acquire companies with
entrepreneurial management philosophies and a willingness to learn and
share improved business practices through open communications. The Company
believes that many commercial roofing businesses that lack the capital
necessary to expand their operations will become acquisition candidates.
The Company believes that it will be attractive to these acquisition
candidates because it will provide (i) information on best practices, (ii)
expertise to expand in specialized markets, (iii) the opportunity to focus
on customers and operations rather than administration, (iv) national name
recognition, (v) increased financial resources, (vi) the opportunity for
existing management to have a continuing role with the Company and (vii)
the opportunity to provide services to the Company's customers in their
respective geographic markets. All of the Founding Companies participate in
professional associations, including the NRCA. The Company intends to
capitalize on the relationships created within these professional
associations and the combined industry reputation of the Founding Companies
to pursue its acquisition strategy. Through these and other resources, the
Company believes it will be able to identify and attract acquisition
candidates that meet the Company's criteria. The Company reviews on an
ongoing basis suitable acquisition opportunities. However, the Company does
not currently have any plans, arrangements or understandings with respect
to any particular acquisition, except for the Combination.

5
<PAGE> 7

THE OFFERING

Common Stock Offered.................. 4,000,000 Shares

Common Stock to be Outstanding after
the Offering(1)....................... 10,258,667 Shares

Use of Proceeds....................... To fund the cash portion of the
purchase price for the Founding
Companies, to repay certain
outstanding indebtedness of the
Founding Companies and for other
general corporate purposes, including
working capital and future
acquisitions. See "Use of Proceeds."

Nasdaq National Market Symbol......... ROOF
- ---------------

(1) Includes 6,258,667 shares to be issued in connection with the acquisition of
the Founding Companies concurrently with the Offering, but excludes 282,222
shares of Common Stock reserved for issuance upon the exercise of stock
options and warrants to be issued to holders of options and warrants of
certain of the Founding Companies in the Combination. In addition,
immediately following the Offering the Company will grant options to
purchase approximately 560,000 shares of Common Stock to employees and
directors of the Company pursuant to the Company's 1998 Stock Option and
Restricted Stock Purchase Plan. See "Management -- 1998 Stock Option and
Restricted Stock Purchase Plan."

6
<PAGE> 8

SUMMARY PRO FORMA COMBINED FINANCIAL DATA

General Roofing Services, Inc. will acquire the Founding Companies
concurrently with and as a condition to the consummation of the Offering. For
financial statement presentation purposes, General Roofing Industries ("GRI"), a
combined group of four Founding Companies affiliated through common ownership,
has been identified as the "accounting acquirer," and the financial statements
of GRI will be regarded as the historical financial statements of the Company.
The following summary unaudited pro forma combined financial data present
certain data for the Company, as adjusted for (i) the effects of the
Combination, (ii) the effects of certain other pro forma adjustments to
historical financial statements and (iii) the consummation of the Offering and
the application of the net proceeds therefrom. The unaudited pro forma combined
income statement data assume that the Combination, the Offering and related
transactions were consummated on January 1, 1997 and are not necessarily
indicative of the results that the Company would have obtained had these events
actually occurred at that date or indicative of the Company's future results.
During the period presented below, the Founding Companies were not under common
control or common management, and therefore, the data presented may not be
comparable to or indicative of post-Combination results to be achieved by the
Company. The unaudited pro forma combined income statement data are based on
preliminary estimates, available information and certain assumptions that
Company management deems appropriate. The unaudited pro forma combined financial
data should be read in conjunction with the other financial information included
elsewhere in this Prospectus. See "Selected Historical and Pro Forma Financial
Data," the Unaudited Pro Forma Combined Financial Statements and notes thereto,
and the historical financial statements for each of the Founding Companies and
the notes thereto, all included elsewhere in this Prospectus.

<TABLE>
<CAPTION>
PRO FORMA
COMBINED
-----------------
YEAR ENDED
DECEMBER 31, 1997
-----------------
(IN THOUSANDS,
EXCEPT SHARE AND
PER SHARE DATA)
<S> <C>
INCOME STATEMENT DATA:
Revenues.................................................. $ 195,909
Cost of Revenues.......................................... 153,390
-----------
Gross Profit.............................................. 42,519
Selling, General and Administrative Expenses(1)........... 27,497
Goodwill Amortization(2).................................. 1,607
-----------
Income from Operations.................................... 13,415
Interest and Other Expense, net(3)........................ (531)
-----------
Income before Income Taxes................................ 12,884
Provision for Income Taxes(4)............................. (5,652)
-----------
Net Income................................................ $ 7,232
===========
Basic and Diluted Earnings per Share...................... $ 0.70
===========
Shares used in Computing Pro Forma Net Income per
Share(5)............................................... 10,258,667
===========
</TABLE>

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

(1) The pro forma combined income statement data reflect an aggregate of $3.3
million in pro forma reductions in salaries, bonuses, and benefits to the
owners and key employees of the Founding Companies. The owners and key
employees have agreed to these reductions effective upon the Combination.
See Note 4 to the Unaudited Pro Forma Combined Financial Statements.
(2) Consists of amortization of goodwill to be recorded as a result of the
Combination over a 40-year period and computed on the basis described in the
Notes to the Unaudited Pro Forma Combined Financial Statements.
(3) Several of the Founding Companies are S Corporations. Prior to the
Combination, these Founding Companies will make distributions to their
stockholders totaling $15.3 million, representing substantially

7
<PAGE> 9

all of their previously-taxed undistributed earnings (the "S Corporation
Distributions"). Certain Founding Companies will incur debt of $12.1 million
relating to these distributions and, subsequent to the Offering, such
amounts will be repaid by borrowings of the Company under a three-year,
$50.0 million revolving credit facility which will become available
concurrently with, and conditioned upon, the Offering. Accordingly, pro
forma interest expense has been increased by $968,000 for the year ended
December 31, 1997.
(4) Assumes a corporate income tax rate of 39% and the non-deductibility of
goodwill.
(5) Includes 4,000,000 shares of Common Stock offered hereby and 6,258,667
shares to be issued in connection with the acquisition of the Founding
Companies concurrently with the Offering. Excludes 282,222 shares of Common
Stock reserved for issuance upon the exercise of stock options and warrants
to be issued to holders of options and warrants of certain of the Founding
Companies in the Combination. In addition, immediately following the
Offering the Company will grant options to purchase approximately 560,000
shares of Common Stock to employees and directors of the Company pursuant to
the Company's 1998 Stock Option and Restricted Stock Purchase Plan. See
"Management -- 1998 Stock Option and Restricted Stock Purchase Plan."

8
<PAGE> 10

SUMMARY INDIVIDUAL FOUNDING COMPANY HISTORICAL FINANCIAL DATA
(IN THOUSANDS)

The following table presents certain summary historical income statement
data of the Founding Companies and supplemental combined summary historical
income statement data for the Founding Companies for each of their three most
recent fiscal years and for the three months ended March 31, 1997 and 1998. The
historical income statement data below have not been adjusted for the pro forma
adjustments related to contractually agreed reductions in salaries and benefits,
or any other pro forma adjustments reflected in the Unaudited Pro Forma Combined
Financial Statements, included elsewhere in this Prospectus. The income
statement data presented below have been audited for certain of the Founding
Companies and for the periods as reflected in the historical financial
statements of such Founding Companies, included elsewhere in this Prospectus.
See "Management's Discussion and Analysis of Financial Condition and Results of
Operations."

The supplemental combined historical financial data of the Founding
Companies do not represent data derived from results of operations presented in
accordance with generally accepted accounting principles, but are only the
summation of the revenues and gross profit of the Founding Companies on a
historical basis.

<TABLE>
<CAPTION>
THREE MONTHS
ENDED
FISCAL YEARS(1) MARCH 31,
------------------------------ -----------------
1995 1996 1997 1997 1998
-------- -------- -------- ------- -------
<S> <C> <C> <C> <C> <C>
SUPPLEMENTAL HISTORICAL COMBINED:
Revenues.................................................. $152,184 $171,510 $201,220 $40,682 $40,746
Gross Profit.............................................. 29,458 35,634 42,686 7,576 7,893
GENERAL ROOFING INDUSTRIES(2):
Revenues.................................................. $ 18,174 $ 24,810 $ 26,792 $ 6,508 $ 7,135
Gross Profit.............................................. 4,615 7,552 7,691 1,977 1,827
Selling, General and Administrative Expenses.............. 4,955 6,570 6,995 1,715 2,049
Operating Income (Loss)................................... (340) 982 696 262 (222)
THE C.E.I. COMPANIES(3):
Revenues.................................................. $ 39,694 $ 42,525 $ 45,163 $ 9,653 $10,025
Gross Profit.............................................. 8,505 9,673 10,264 1,911 2,292
Selling, General and Administrative Expenses.............. 7,289 7,699 8,018 1,933 2,105
Operating Income (Loss)................................... 1,216 1,974 2,246 (22) 187
ANTHONY ROOFING, LTD.:
Revenues.................................................. $ 12,290 $ 12,226 $ 19,778 $ 2,524 $ 2,489
Gross Profit.............................................. 3,446 2,719 5,337 282 357
Selling, General and Administrative Expenses.............. 1,961 2,086 2,870 372 445
Operating Income (Loss)................................... 1,485 633 2,467 (90) (88)
SPECIALTY ASSOCIATES, INC. AND AFFILIATE(4):
Revenues.................................................. $ 13,297 $ 15,306 $ 17,197 $ 3,529 $ 2,300
Gross Profit.............................................. 1,584 1,647 2,240 326 14
Selling, General and Administrative Expenses.............. 1,416 1,236 1,486 272 317
Operating Income (Loss)................................... 168 411 754 54 (303)
CYCLONE ROOFING COMPANY:
Revenues.................................................. $ 9,243 $ 10,254 $ 16,057 $ 3,085 $ 2,829
Gross Profit.............................................. 1,625 1,716 3,534 501 372
Selling, General and Administrative Expenses.............. 683 1,157 1,099 227 227
Operating Income.......................................... 942 559 2,435 274 145
WRIGHT-BROWN ROOFING COMPANY:
Revenues.................................................. $ 10,923 $ 12,820 $ 15,316 $ 2,135 $ 2,447
Gross Profit.............................................. 1,441 2,190 2,496 347 334
Selling, General and Administrative Expenses.............. 1,007 1,285 1,393 393 307
Operating Income (Loss)................................... 434 905 1,103 (46) 27
HARRINGTON-SCANLON ROOFING COMPANY, INC.
AND AFFILIATES(5):
Revenues.................................................. $ 5,067 $ 10,313 $ 11,816 $ 2,654 $ 2,369
Gross Profit.............................................. 989 1,636 1,770 468 184
Selling, General and Administrative Expenses.............. 839 1,515 1,550 329 377
Operating Income (Loss)................................... 150 121 220 139 (193)
</TABLE>

9
<PAGE> 11

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

(1) The fiscal years presented above are the years ended December 31, 1995, 1996
and 1997, except for (i) General Roofing Industries, for which the fiscal
years presented are the years ended October 31, 1995, 1996 and 1997; (ii)
Anthony Roofing, Ltd., for which the fiscal years presented are October 31,
1995, and December 31, 1996 and 1997; (iii) Specialty Associates, Inc. and
Affiliate, for which the fiscal years presented are the year ended June 30,
1995, the 53-week period ended February 2, 1997 and the 52-week period ended
February 1, 1998; (iv) Slavik, Butcher & Baecker Construction Company, Inc.,
for which the fiscal years presented are the years ended June 30, 1995, 1996
and 1997; (v) Five-K Industries, Inc. and Subsidiary, for which the fiscal
years presented are the years ended March 31, 1996, 1997 and 1998; and (vi)
Register Contracting Company, Inc., for which the fiscal years presented are
the years ended September 30, 1995, 1996 and 1997.
(2) Consists of (i) GRI of South Florida, Inc., (ii) GRI of West Florida, Inc.,
(iii) GRI of Orlando, Inc. and (iv) Dakota Leasing, Inc.
(3) Consists of (i) C.E.I. Roofing, Inc., (ii) C.E.I. West Roofing Company, Inc.
and (iii) C.E.I. Florida, Inc.
(4) Consists of Specialty Associates, Inc. and SAI Wholesale Distributors, Inc.
(5) Consists of Harrington-Scanlon Roofing Company, Inc. and Subsidiary,
Architectural Sheet Metal, Inc., and H&S Investments, LLC.

10
<PAGE> 12

RISK FACTORS

In addition to the other information in this Prospectus, prospective
purchasers of the Common Stock offered hereby should consider carefully the
following factors before deciding to invest in the Common Stock. To the extent
this Prospectus contains certain forward-looking statements, actual results
could differ materially from those projected in the forward-looking statements
as a result of any number of factors, including the risk factors set forth below
and elsewhere in this Prospectus.

ABSENCE OF COMBINED OPERATING HISTORY

Although each of the Founding Companies has operated for more than 10
years, the business of the Founding Companies will not be operated on a combined
basis until after the Offering. There can be no assurance that the Company will
be able to integrate the operations of the Founding Companies successfully or to
institute the necessary systems and procedures, including accounting and
financial reporting systems, to manage the combined enterprise on a profitable
basis. In addition, there can be no assurance that the Company's management
group will be able to manage the combined entity or to implement effectively the
Company's operating strategy, internal growth strategy and acquisition program.
The pro forma combined and supplemental historical combined financial results of
the Founding Companies cover periods when the Founding Companies were not under
common control or management and may not be indicative of the Company's future
financial or operating results. The inability of the Company to integrate and
manage the Founding Companies and such additional businesses as the Company may
acquire as a cohesive, efficient enterprise or to eliminate unnecessary
duplication may have a material adverse effect on the business, financial
condition and results of operations of the Company.

DEPENDENCE ON ACQUISITIONS FOR GROWTH

The Company intends to grow primarily by acquiring commercial roofing
companies in its existing and new markets. The Company's acquisition strategy
presents risks that, singularly or in any combination, could materially
adversely affect the Company's business, financial condition and results of
operations. These risks include the possibility of the adverse effect on
existing operations of the Company from the diversion of management attention
and resources to acquisitions, the possible loss of acquired customer bases and
key personnel, the possible adverse effect on earnings resulting from
amortization of goodwill created in purchase transactions, and the contingent
and latent risks associated with the past operations and other unanticipated
problems arising in the acquired businesses. The success of the Company's
acquisition strategy will depend on the extent to which it is able to identify,
acquire, successfully integrate and profitably manage additional businesses, and
no assurance can be given that the Company's strategy will succeed. Competition
for suitable acquisition targets could limit the Company's ability to locate
suitable acquisition targets and could increase the cost of purchasing such
acquisition targets. See "Business -- Strategy -- Acquisition Strategy."

DEPENDENCE ON ADDITIONAL CAPITAL FOR FUTURE GROWTH

Expansion of the Company through acquisitions and internal growth will
require significant capital. The timing, size and success of the Company's
acquisition efforts and the associated capital commitments cannot be readily
predicted. The Company currently intends to finance future acquisitions by using
shares of its Common Stock for a substantial portion of the consideration to be
paid. If the Common Stock does not maintain a sufficient market value, or if
potential acquisition candidates are otherwise unwilling to accept Common Stock
as part of the consideration for the sale of their businesses, the Company may
be required to utilize more of its cash resources, if available, in order to
initiate and maintain its acquisition program. The Company expects to have
approximately $12.7 million (at an assumed offering price of $14.00 per share)
of the net proceeds of this Offering remaining for future acquisitions and
working capital. There can be no assurance the Company will be able to raise
sufficient capital upon terms acceptable to the Company, or at all. If the
Company does not have sufficient cash resources, its growth could be limited
unless it is able to obtain additional capital through equity or debt financing.
Such indebtedness, if incurred, would increase the Company's leverage, may make
the Company more vulnerable to economic downturns and may limit its

11
<PAGE> 13

ability to withstand competitive pressures. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations -- Liquidity and
Capital Resources -- Pro Forma Combined."

SEASONALITY; QUARTERLY FLUCTUATIONS; GENERAL ECONOMIC CONDITIONS

The Company's results of operations and the demand for its roofing services
can be expected to fluctuate from quarter to quarter due to a variety of
factors, including adverse weather conditions and the timing of acquisitions.
For example, mild, dry weather results in reduced demand for repair services.
Conversely, adverse weather increases the number of roofs in need of repair, but
due to the increased demand and the inability to render services during such
periods, severe weather can delay the time it takes to complete a roofing
project. Accordingly, the Company expects its revenues and operating results
generally will be lower in the first and fourth quarters. In addition, the
Company believes that the roofing industry is sensitive to economic conditions,
including national, regional and local slowdowns in construction, commercial,
industrial and/or real estate activity and weakening demand for roofing
services. New roof construction is particularly sensitive to economic
conditions. The Company's operating results may be adversely affected by
increases in interest rates that may lead to a decline in economic activity.
There can be no assurance that adverse economic conditions will not have a
material adverse effect on the Company's business, financial condition and
results of operations. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations -- Seasonal and Cyclical Nature of the
Commercial Roofing Industry."

RISKS ASSOCIATED WITH DEVELOPMENT, IMPLEMENTATION, AND INTEGRATION OF OPERATING
SYSTEMS AND POLICIES

As a rapidly growing provider of commercial roofing services, the Company
is faced with the development, implementation and integration of Company-wide
policies and systems related to its operations. The Company plans to implement
and integrate certain information and operating systems and procedures for the
Founding Companies, including accounting systems, employment and human resources
policies, purchasing programs and certain centralized marketing programs. Each
of the Founding Companies and companies to be acquired in the future will need
to modify certain systems and policies they have utilized historically to
implement the Company's systems and policies. As a result of the Company's
decentralized operating strategy, there can be no assurance that the Company's
operating systems and policies will be successfully implemented at the
subsidiary level or that the Company will be successful in monitoring the
performance of the subsidiaries. The Company may experience delays,
complications and expenses in implementing, integrating and operating such
systems, any of which could have a material adverse effect on the Company's
business, financial condition and results of operations. See
"Business -- Strategy -- Operating Strategy."

DEPENDENCE ON ENTERPRISE INFORMATION SYSTEMS

The Company's operations are dependent on the Company's enterprise
information systems, which consist of a proprietary project management system
and a management information system. The Company relies on these information
systems for communications with its operating locations, employees and customers
and information regarding the status of roofing projects, employee productivity,
Company operations, accounting and financial matters, marketing and sales, the
Company's facility management program and a variety of other matters. In
addition, any significant disruption or unavailability of the Company's
information systems for any significant period of time would have a material
adverse effect on the Company's business, financial condition and results of
operations. Although the Company has taken precautions to protect itself from
events that could interrupt its operations, including the secured storage of
back-up data, physical security systems and an early warning fire detection
system, there can be no assurance that a sustained electrical or communications
link outage, fire, flood or other natural disaster would not disable the
information systems or prevent the information systems from communicating with
the Company's branch locations. See "Business -- Enterprise Information
Systems."

VALUATION OF ACQUISITIONS

The initial public offering price of the Common Stock will be determined
based on negotiations between the Company and the representatives of the
Underwriters, and the factors which will be considered in
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<PAGE> 14

determining such price include, in addition to prevailing market conditions, the
expected results of operations of the Company, estimates of the business
potential and earnings prospects of the Company and the economy as a whole. See
"Underwriting." The valuation of the Company has not been established on a
company-by-company basis, and no third party appraisals of the Founding
Companies were obtained by the Company for purposes of the Offering nor has a
fairness opinion been obtained. A valuation of the Company determined solely by
appraisal of the individual Founding Companies would likely result in a
different valuation of the Company than that reflected by the initial public
offering price of the Common Stock offered hereby. The aggregate consideration
related to the Founding Companies (other than General Roofing Industries) will
be approximately $101.8 million, which will consist of $58.7 million in Common
Stock and $25.7 million in cash, assumed debt of $11.7 million for the S
Corporation Distributions and $9.7 million of assumed existing debt to be repaid
upon completion of the Offering. The consideration to be paid by the Company for
each Founding Company other than GRI, the accounting acquirer, was based upon
arms-length negotiations between the Company's management and the stockholders
of each Founding Company, and management considered a number of factors
including historical and anticipated earnings, customer base, geographic
location, market presence and management of each Founding Company, among other
factors. There can be no assurance that the consideration paid or to be paid by
the Company for the Founding Companies accurately reflects the value of the
assets of these companies or that the percentage of Common Stock of the Company
owned by the former owners of the Founding Companies reflects the value of the
assets of the Founding Companies. See "The Combination."

AVAILABILITY OF SKILLED ROOFING LABOR

The timely provision of high-quality maintenance, repair, restoration,
re-roofing and new roof construction services requires an adequate supply of
skilled roofing labor. The supply of roofing labor is sensitive to economic and
competitive conditions and the level of demand for roofing services.
Accordingly, the Company's ability to increase its productivity and
profitability may be limited by its ability to employ, train and retain the
skilled roofing laborers necessary to meet the Company's service requirements.
From time to time, there are shortages of skilled labor, and there can be no
assurance that the Company will be able to maintain an adequate skilled labor
force necessary to operate efficiently, that the Company's labor expense will
not increase as a result of a shortage in the supply of skilled labor or the
unionization of a portion of its labor force, or that the Company will not have
to curtail its planned internal growth as a result of labor shortages. At March
31, 1998, the Company had 1,960 full-time employees, including 1,666 employees
in field operations and 294 managers and administrative employees. Approximately
600 employees in seven of the Founding Companies are members of unions and work
under collective bargaining agreements which are subject to renegotiation from
time to time. See "Business -- Personnel, Training and Safety."

FACTORS AFFECTING INTERNAL GROWTH

The Company's ability to increase the revenues of the Founding Companies
and any subsequently acquired company will be affected by various factors,
including demand for commercial roofing services, the level of new construction,
the Company's ability to expand the range of services offered to customers of
individual Founding Companies and other acquired businesses, the Company's
ability to develop national accounts and other marketing programs in order to
attract new customers and the Company's ability to attract and retain a
sufficient number of skilled roofing labor and other necessary personnel. Many
of these factors are beyond the control of the Company, and there can be no
assurance that the Company's operating and internal growth strategies will be
successful or that it will be able to generate cash flow adequate for its
operation and to support internal growth. Furthermore, there can be no assurance
that management can integrate acquired companies and reduce overhead expenses.
See "Business -- Strategy -- Operating Strategy."

COMPETITION

The commercial roofing industry is highly fragmented and competitive and is
served principally by small, owner-operated private companies. The Company
competes for sales with numerous roofing companies in each of its markets.
Certain of these smaller competitors have lower overhead cost structures and may
be able

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<PAGE> 15

to provide their services at lower rates than the Company. There can be no
assurance that the Company will not encounter increased competition from
existing competitors or new market entrants that may be significantly larger and
have greater financial and marketing resources. In addition, to the extent
existing or future competitors seek to gain or retain market share by reducing
prices, the Company may be required to lower its prices, which may adversely
affect operating results. Existing or future competitors also may seek to
compete with the Company for acquisition candidates. Other consolidators of
commercial roofing companies may have greater financial and other resources than
the Company, which could have the effect of increasing the price for
acquisitions or reducing the number of suitable acquisition candidates. See
"Business -- Competition."

DEPENDENCE ON KEY PERSONNEL

The Company's operations depend on the continuing efforts of its executive
officers and the senior management of the Founding Companies, and the Company
will depend on the senior management of significant businesses it acquires in
the future. The business of the Company could be affected adversely if any of
these persons does not continue in his or her management role with the Company
or an acquired business and the Company is unable to attract and retain
qualified replacements. Certain shareholders and key managers of the Founding
Companies have entered into employment agreements containing, among other
things, confidentiality and non-competition provisions. The Company has "key
man" life insurance policies on the life of Gregg E. Wallick in the amount of
$3.0 million. The Company is the beneficiary of such policy. See "Management."

CONTROL BY EXISTING MANAGEMENT AND SHAREHOLDERS

Upon the consummation of the Offering, the existing stockholders of the
Founding Companies will beneficially own in the aggregate approximately 61.0% of
the outstanding Common Stock (57.6% if the Underwriters' over-allotment is
exercised in full). Accordingly, such persons will have substantial influence on
the Company, which influence might not be consistent with the interests of other
shareholders, and on the outcome of any matters submitted to the Company's
shareholders for approval. In addition, although there is no current agreement,
understanding or arrangement for these shareholders to act together on any
matter, these shareholders may have economic and business reasons to act
together, and would be in a position to execute significant influence over the
affairs of the Company if they were to act together in the future. If these
persons were to act in concert, they might, as a practical matter, be able to
exercise control over the Company's affairs, including the election of the
entire Board of Directors and any matter submitted to a vote of shareholders.
See "Security Ownership of Certain Beneficial Owners and Management."

AMORTIZATION OF GOODWILL

The Company's balance sheet immediately following the Offering and
consummation of the acquisition of the Founding Companies will include an amount
designated as "goodwill" that represents 49% of assets and 67% of stockholders'
equity. Goodwill arises when an acquirer pays more for a business than the fair
value of the tangible and separately measurable intangible net assets. Generally
accepted accounting principles require that this and all other intangible assets
be amortized over the period benefited. Management has determined that period is
no less than 40 years.

If the Company were to assign a shorter life to a material portion of the
goodwill, earnings reported in periods immediately following the acquisition of
the Founding Companies would be reduced. Earnings in later years could be
significantly affected if management determined then that the remaining balance
of goodwill was impaired. Management has reviewed with its independent
accountants all of the factors and related future cash flows which it considered
in arriving at the amount incurred to acquire each of the Founding Companies.
Management concluded that the anticipated future cash flows associated with
intangible assets recognized in the acquisitions will continue indefinitely, and
there is no persuasive evidence that any material portion will dissipate over a
period shorter than 40 years.

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<PAGE> 16

PROCEEDS OF OFFERING PAYABLE FOR PURCHASE PRICE FOR FOUNDING COMPANIES AND FOR
EXISTING OBLIGATIONS

The Company will use approximately $35.4 million of net proceeds of the
Offering to fund the cash portion of the consideration paid to acquire the
Founding Companies and to repay debt assumed and certain obligations resulting
from the acquisition of the Founding Companies. Accordingly, only approximately
$12.7 million of the net proceeds of the Offering will be available to meet the
Company's cash requirements following the closing of the Offering. See "Use of
Proceeds" and "The Combination."

REGULATION

The Company's business and the activities of its roofing contractors are
subject to various federal, state, and local laws, regulations and ordinances
relating to, among other things, the licensing and certification of roofing
contractors, OSHA standards, advertising, building and zoning regulations and
environmental laws and regulations relating to the disposal of demolition debris
and other solid wastes. The Company has not undertaken comprehensive
environmental reviews of all of the individual Founding Companies. Instead, as
to environmental issues, the Company will rely on its own investigations and on
the indemnity obligations of the Stockholders of each of the Founding Companies
contained in the individual acquisition agreements. There can be no assurance
that the Company will not discover existing or incur future environmental
claims, any of which could have a material adverse effect on the Company's
business, financial condition and results of operations.

In certain jurisdictions, the Company or one of its employees is required
to be a licensed contractor. In addition, certain jurisdictions require the
Company to obtain a building permit for each roofing project. The Company is
also subject to certain federal, state and local laws and regulations, which,
among other things, regulate the Company's advertising, warranties and
disclosures to customers. Although the Company believes that it has been and is
currently in compliance in all material respects with such laws and regulations,
there can be no assurance that in the future the Company's results of operations
will not be materially adversely affected by existing or new laws or regulations
applicable to the Company's business. See "Business -- Government Regulation."

POTENTIAL EFFECT OF SHARES ELIGIBLE FOR FUTURE SALE ON PRICE OF COMMON STOCK

Upon the closing of the Offering, 10,258,667 shares of Common Stock will be
outstanding. The 4,000,000 shares sold in this Offering (other than shares that
may be purchased by affiliates of the Company) will be freely tradable. The
remaining 6,258,667 shares of Common Stock outstanding may be resold publicly
only following their effective registration under the Securities Act of 1933, as
amended (the "Securities Act"), or pursuant to an available exemption (such as
provided by Rule 144 under the Securities Act following a holding period for
previously unregistered shares) from the registration requirements of the
Securities Act. Sales made pursuant to Rule 144 must comply with its applicable
volume limitations and other requirements. The holders of Common Stock issued in
connection with the Combination have agreed with the Company and the
Underwriters that they generally will not sell, transfer or otherwise dispose of
any of their shares for two years following the date of acquisition of such
shares.

Upon the closing of the Offering, the Company also will have outstanding
options and warrants to purchase up to a total of 282,222 shares of Common
Stock, none of which will be exercisable until February 1999. In addition, the
Company will grant options to purchase approximately 560,000 shares of Common
Stock to employees and directors of the Company upon the consummation of the
Offering pursuant to the Company's 1998 Stock Option and Restricted Stock
Purchase Plan. The Company intends to register all the shares subject to these
options and warrants under the Securities Act for public resale.

The Company, its directors and executive officers and certain other
shareholders have agreed not to offer or sell any shares for a period of 180
days following the date of this Prospectus without the prior written consent of
The Robinson-Humphrey Company, LLC, except (A) that the Company may issue Common
Stock in the Offering, in connection with acquisitions generally, and pursuant
to the exercise of stock options which are either (i) outstanding on the date of
this Prospectus or (ii) issued under the Company's 1998 Stock Option and
Restricted Stock Purchase Plan, provided that no such shares of Common Stock or
options shall
15
<PAGE> 17

be transferable or exercisable, as the case may be, prior to 180 days from the
date of this Prospectus and (B) that such directors, executive officers and
shareholders may sell Common Stock pursuant to a cashless exercise of such stock
options or make a bona fide gift of Common Stock, provided that the donee agrees
to be bound by the terms of the donor's lockup agreement. However, this
restriction may be waived by The Robinson-Humphrey Company, LLC in its
discretion.

The effect, if any, of the availability for sale, or sale, of the shares of
Common Stock eligible for future sale on the market price of the Common Stock
prevailing from time to time is unpredictable, and no assurance can be given
that the effect will not be adverse. See "Shares Eligible for Future Sale."

RESTRICTIONS ON DIVIDENDS; DEPENDENCE ON SUBSIDIARIES

The Company will conduct its operations through subsidiaries, including the
Founding Companies, and is therefore dependent upon the cash flow of and the
transfer of funds by those subsidiaries to the Company in the form of loans,
dividends or otherwise to meet its financial obligations. Each Founding Company
and any future subsidiary of the Company will be distinct legal entities and
will have no obligation, contingent or otherwise, to transfer funds to the
Company. The Company's ability to pay dividends on the Common Stock could be
restricted by the terms of subsequent financings and shares of Preferred Stock
that may be issued in future transactions. See "Description of Capital Stock."
In addition, the terms of the Company's revolving credit facility to be entered
into concurrently with the consummation of the Offering will restrict the
payment of dividends. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations -- Liquidity and Capital Resources -- Pro
Forma Combined."

NO PRIOR MARKET; POSSIBLE VOLATILITY OF STOCK PRICE

Prior to the Offering, no public market for the Common Stock has existed,
and the initial public offering price, which will be determined by negotiation
between the Company and representatives of the Underwriters, may not be
indicative of the price at which the Common Stock will trade after the Offering.
See "Underwriting" for the factors considered in determining the initial public
offering price. No assurance can be given that an active trading market for the
Common Stock will develop or, if it developed, that it will continue after the
Offering. The market price of the Common Stock after the Offering may be subject
to significant fluctuations from time to time in response to numerous factors,
including variations in the reported financial results of the Company and
changing conditions in the economy in general or in the Company's industry in
particular. In addition, stock markets generally experience significant price
and volume volatility from time to time which may affect the market price of the
Common Stock for reasons unrelated to the Company's performance.

LIABILITY AND INSURANCE

The Company's business exposes it to potential claims for personal injury
or death resulting from injuries to its employees and other persons caused in
connection with the Company's maintenance, repair or installation of roofing
systems. Certain types of claims, such as claims for punitive damages or for
damages arising from intentional misconduct, are generally not covered by the
Company's insurance. The Company carries comprehensive insurance subject to a
deductible. There can be no assurance that existing or future claims will not
exceed the level of the Company's insurance, or that such insurance will
continue to be available on economically reasonable terms, if at all. See
"Business -- Insurance" and "-- Legal Proceedings."

POSSIBLE ANTI-TAKEOVER EFFECTS OF FLORIDA LAW, CHARTER PROVISIONS AND PREFERRED
STOCK

The Company is incorporated under the laws of the State of Florida. Certain
provisions of Florida law may have the effect of delaying, deferring or
preventing a change in control of the Company. In addition, certain provisions
of the Company's Articles of Incorporation ("Articles") and Bylaws may be deemed
to have anti-takeover effects and may delay, defer or prevent a takeover attempt
that a shareholder might consider in its best interest. The Board of Directors
can, without any vote or action by the holders of the Common Stock, authorize
and issue shares of preferred stock with voting or conversion rights and other
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<PAGE> 18

privileges and preferences that could adversely affect the voting or other
rights of holders of the Common Stock. In addition, the issuance of preferred
stock may have the effect of delaying, deferring or preventing a change of
control of the Company. See "Description of Capital Stock -- Anti-Takeover
Effects of Certain Provisions of Florida Law" and "-- Certain Provisions of the
Company's Articles and Bylaws."

IMMEDIATE, SUBSTANTIAL DILUTION

Purchasers of Common Stock in the Offering (i) will experience immediate,
substantial dilution in the net tangible book value of their stock of $10.97 per
share and (ii) may experience further dilution in that value from issuances of
Common Stock in connection with future acquisitions. See "Dilution."

YEAR 2000 ISSUE

Several of the Founding Companies are not year 2000-compliant. The Company
has plans to prepare its computer systems and related software to accommodate
sensitive information relating to the year 2000. The Company intends for the
Founding Companies to convert their computer systems as part of its program to
adopt best practices and leverage its propriety enterprise information system.
The Company expects that any additional costs related to ensuring that such
systems and software will be ready for the year 2000 will not be material to the
financial condition or results of operations of the Company. In addition, the
Company is discussing with its vendors and customers the possibility of any
difficulties which may affect the Company as a result of its vendors and
customers ensuring that their computer systems and software are year 2000-
compliant. To date, no significant concerns have been identified. However, there
can be no assurance that no year 2000-related computer operating problems or
expenses will arise with the Company's computer systems and software or in the
computer systems and software of the Company's vendors and customers.

CERTAIN EFFECTS OF AUTHORIZED BUT UNISSUED COMMON STOCK

Following the Offering, the Company will have 79,741,333 authorized but
unissued shares of Common Stock available for future issuance without
shareholder approval, subject to applicable requirements of the Nasdaq National
Market. These additional shares of Common Stock may be utilized for a variety of
corporate purposes, including acquisitions, future public offerings to raise
additional capital, and employee benefits plans and director compensation plans.
The existence of these shares may enable the Board to issue shares to persons
friendly to current management which could render more difficult or discourage
an attempt to obtain control of the Company by means of a proxy contest, tender
offer, merger or otherwise, and thereby protect the continuity of the Company's
management. See "Description of Capital Stock."

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<PAGE> 19

THE COMPANY

The Company was founded in 1998 to create the leading nationwide provider
of commercial roofing services. Concurrently with, and as a condition to, the
Offering, the Company plans to acquire the 18 Founding Companies, which are
comprised of 12 unaffiliated groups of companies, and also include other
affiliated companies providing administrative and other services. The Founding
Companies, which have been in business for an average of approximately 28 years,
had pro forma combined 1997 revenues and income from operations of approximately
$195.9 million and $13.4 million, respectively. Following the Combination and
the Offering, the Company will have operations in 20 cities in 12 states, and
will be one of the largest providers of commercial roofing services in the
United States. The aggregate consideration (the "Acquisition Consideration") to
be paid by the Company for the Founding Companies consists of approximately
$41.3 million in cash (without giving effect to certain earn-out provisions and
distributions to be made by certain Founding Companies prior to the consummation
of the Offering) and 6,258,667 shares of Common Stock. Certain shareholders and
key managers of the Founding Companies have entered into employment agreements
containing, among other things, confidentiality and non-competition provisions.
Certain information for the Founding Companies is set forth below.

<TABLE>
<CAPTION>
PERCENTAGE OF 1997 REVENUES
-----------------------------
REPAIR,
YEAR RESTORATION NEW ROOF TOTAL
FOUNDING COMPANIES FOUNDED HEADQUARTERS SITE AND RE-ROOFING CONSTRUCTION REVENUES(1)
------------------ ------- ------------------------- -------------- ------------ --------------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
General Roofing
Industries(2)........ 1988 Pompano Beach, Florida 52% 48% $ 26,792
The C.E.I. Companies
("C.E.I.")
C.E.I. Roofing,
Inc............... 1981 Dallas, Texas 53 47 17,929
C.E.I. West Roofing
Company, Inc...... 1977 Denver, Colorado 40 60 16,991
C.E.I. Florida,
Inc............... 1978 DeBary, Florida 60 40 10,243
Blackmore and Buckner
Roofing, Inc......... 1919 Indianapolis, Indiana 85 15 7,739
Cyclone Roofing
Company.............. 1964 Indian Trail, N. Carolina 70 30 16,057
Anthony Roofing,
Ltd.................. 1979 Aurora, Illinois 72 28 19,778
Slavik, Butcher &
Baecker
Construction Company,
Inc.................. 1977 Rochester Hills, Michigan 95 5 11,265
Advanced Roofing, Inc.
and Affiliates....... 1983 Ft. Lauderdale, Florida 95 5 12,174
Five-K Industries, Inc.
and Subsidiary....... 1942 Smyrna, Georgia 63 37 11,091
Wright-Brown Roofing
Company.............. 1951 Detroit, Michigan 89 11 15,316
Register Contracting
Company, Inc......... 1981 Jacksonville, Florida 70 30 6,832
Harrington-Scanlon
Roofing Company, Inc.
and Affiliates(3).... 1983 Kansas City, Kansas 38 62 11,816
Specialty Associates,
Inc. and
Affiliate(4)......... 1975 West Allis, Wisconsin 70 30 17,197
--------
Total........ 65% 35% $201,220
== == ========
</TABLE>

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

(1) Several of the individual Founding Companies have fiscal year ends that
differ from December 31. All of the Founding Companies will use the fiscal
year end December 31 upon the consummation of the Combination. In addition,
certain operations of two Founding Companies are not being acquired in the
Combination.

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<PAGE> 20

(2) Consists of (i) GRI of South Florida, Inc., (ii) GRI of West Florida, Inc.,
(iii) GRI of Orlando, Inc. and (iv) Dakota Leasing, Inc.
(3) Consists of (i) Harrington-Scanlon Roofing Company, Inc. and Subsidiary,
(ii) Architectural Sheet Metal, Inc. and (iii) H&S Investments, LLC.
(4) Consists of Specialty Associates, Inc., and SAI Wholesale Distributors, Inc.

General Roofing Industries ("GRI") was founded in 1988 by Gregg E. Wallick
and began its initial operations in south Florida. In 1992, GRI acquired a
roofing company in Tampa, Florida and, in 1994, acquired an additional roofing
company in Orlando, Florida. GRI currently operates throughout Florida and is
the largest commercial roofing company in Florida. GRI specializes in commercial
and industrial roofing and sheet metal systems. GRI has approximately 320
employees. GRI has implemented an enterprise information system and centralized
accounting system which will be implemented by the Company following the
consummation of the Combination. GRI was named Roofing, Siding and Installation
Magazine ("RSI") Contractor of the Year in 1993. GRI is a member of the NRCA and
the Alliance for Progress. Gregg E. Wallick, its president and chief executive
officer, has signed a three year employment agreement with the Company and
serves as the President and Chief Executive Officer and Chairman of the Board of
Directors of the Company.

C.E.I. Roofing, Inc. ("C.E.I. Roofing") was founded in 1981 by George
Cook, John C. Cook and Doug Reader, and operates in Dallas, Texas and Detroit,
Michigan. C.E.I. Roofing specializes in commercial and industrial roofing and
sheet metal systems. C.E.I. Roofing has approximately 210 employees. George
Cook, its executive vice president, and Doug Reader, its president, have signed
three year employment agreements to continue in their present positions with
C.E.I. Roofing upon the consummation of the Combination.

C.E.I. West Roofing Company, Inc. ("C.E.I. West") was founded in 1977 by
George Cook, John C. Cook and Frederick E. Holland and operates in Denver,
Colorado and Sacramento, California. C.E.I. West specializes in commercial and
industrial roofing and sheet metal systems. C.E.I. West has approximately 200
employees. Frederick E. Holland, its president, and Michael McClane, the vice
president and manager of C.E.I. West's Sacramento, California branch office,
have signed three year employment agreements to continue in their present
positions with C.E.I. West upon the consummation of the Combination.

C.E.I. Florida, Inc. ("C.E.I. Florida") was founded in 1978 by George
Cook, John C. Cook and Ron Martin and operates in north and central Florida.
C.E.I. Florida specializes in commercial and industrial roofing and sheet metal
systems. C.E.I. Florida has approximately 100 employees. John C. Cook, its
president and chief executive officer, has signed a three year employment
agreement to continue in his present position with C.E.I. Florida and will
become a director of the Company upon the consummation of the Combination.

Blackmore and Buckner Roofing, Inc. ("Blackmore & Buckner") was founded in
1919 and operates primarily in central Indiana. Blackmore & Buckner specializes
in commercial and industrial roofing and sheet metal systems. Blackmore &
Buckner has approximately 100 employees. Stephen Buckner, its president, and
Donald Parrish, its vice president, have each signed a three year employment
agreement to continue in their present positions with Blackmore & Buckner upon
the consummation of the Combination.

Cyclone Roofing Company ("Cyclone Roofing") was founded in 1964 and
operates primarily in North Carolina and South Carolina. Cyclone Roofing
specializes in commercial and industrial roofing and sheet metal systems.
Cyclone Roofing has approximately 140 employees. Cyclone Roofing has been
recognized for outstanding work by the U.S. Army and Metal Architecture, a trade
magazine. R. Wayne Cooke, its president, has signed a three year employment
agreement to continue in his present position with Cyclone Roofing upon the
consummation of the Combination.

Anthony Roofing, Ltd. ("Anthony Roofing") was founded in 1979 and operates
in the Chicago, Illinois metropolitan area. Anthony Roofing specializes in
commercial and industrial roofing and sheet metal systems. Anthony Roofing has
approximately 130 employees. Joel A. Thompson, its founder and president, has
signed a three year employment agreement to continue in his present position
with Anthony Roofing and will become a director of the Company upon the
consummation of the Combination.

19
<PAGE> 21

Slavik, Butcher & Baecker Construction Company, Inc. ("Slavik Butcher"),
was founded in 1977 and operates in east and central Michigan. Slavik Butcher
specializes in re-roofing and restoration, and has expertise in low and
steep-sloped roofing. Slavik Butcher was named Contractor of the Year by RSI in
1994. Slavik Butcher has approximately 65 employees. Patrick Butcher, its
co-founder and president, and Joe Butcher, its co-founder, vice president and
chief financial officer, have signed three year employment agreements to
continue in their present positions with Slavik Butcher upon the consummation of
the Combination.

Advanced Roofing, Inc. ("Advanced Roofing") was founded in 1983 and
operates primarily in Florida. Advanced Roofing specializes in commercial and
industrial roofing and sheet metal systems, and has expertise in difficult
re-roofing projects. Advanced Roofing has approximately 100 employees. Robert
Kornahrens, its founder and president, has signed a three year employment
agreement to continue in his present position with Advanced Roofing upon the
consummation of the Combination.

Five-K Industries, Inc., which conducts business under the name of
"Therrel-Kizer" ("Therrel-Kizer" or "Five-K") was founded in 1942 and operates
in the Atlanta, Georgia metropolitan area. Therrel-Kizer specializes in
commercial and industrial roofing and sheet metal systems, and has expertise in
large-scale roofing projects. Therrel-Kizer has approximately 100 employees.
Herbert J. Kizer III, its president and chief executive officer, has signed a
three year employment agreement to continue in his present position with
Therrel-Kizer upon the consummation of the Combination.

Wright-Brown Roofing Company ("Wright-Brown") was founded in 1951 and
operates in the Detroit, Michigan metropolitan area. Wright-Brown specializes in
commercial and industrial roofing and sheet metal systems, and has a full
service roof management program. Wright-Brown has approximately 120 employees.
In 1997, Wright-Brown received the Ford Motor Companies Q1 Preferred Quality
Supplier Award. Thomas E. Brown, Jr., its chairman and chief executive officer,
has previously served as a director of the NRCA. Mr. Brown has signed a three
year employment agreement to continue in his present position with Wright-Brown
and will become a director of the Company upon the consummation of the
Combination. Terry M. Mudge, its President, has signed a three year employment
agreement to continue in his present position with Wright-Brown upon the
consummation of the Combination.

Register Contracting Company, Inc. ("Register Roofing") was founded in 1981
and operates in north Florida. Register Roofing specializes in commercial and
industrial roofing and sheet metal systems, and has experience in working with
architects and owners on various types of roof designs and specifications.
Register Roofing has approximately 85 employees. Gary Register, its founder and
president, has signed a three year employment agreement to continue in his
present position with Register Roofing upon the consummation of the Combination.

Harrington-Scanlon Roofing Company, Inc. ("Harrington-Scanlon") was founded
in 1983 and operates in western Missouri and eastern Kansas and in the Tucson
and Phoenix, Arizona areas. Harrington-Scanlon specializes in commercial and
industrial roofing and sheet metal systems. Harrington-Scanlon has approximately
140 employees. J.R. Harrington, its co-founder and president, and Kevin Scanlon,
its co-founder and vice president, have signed three year employment agreements
to continue in their present positions with Harrington-Scanlon upon the
consummation of the Combination.

Specialty Associates, Inc. ("Specialty Associates") was founded in 1975 and
operates in the Milwaukee, Wisconsin metropolitan area. Specialty Associates
specializes in commercial and industrial roofing and sheet metal systems, and
has expertise in designing and renovating roofing systems. Specialty Associates
has approximately 140 employees. Ronald J. Werowinski, its president, has signed
a three year employment agreement to continue in his present position with
Specialty Associates, upon the consummation of the Combination.

The Company is a Florida corporation with its principal executive offices
located at 951 South Andrews Avenue, Pompano Beach, Florida 33069, and its
telephone number is (954) 942-3550.

20
<PAGE> 22

USE OF PROCEEDS

The net proceeds to the Company from the sale of the shares of Common Stock
in the Offering (at an assumed offering price of $14.00 per share) are estimated
to be approximately $48.1 million ($55.9 million if the Underwriters'
over-allotment option is exercised in full) after deduction of underwriting
discounts and Offering expenses payable by the Company. The Company plans to use
$25.7 million to fund the cash portion of the Acquisition Consideration. The
Company intends to use $9.7 million to repay certain outstanding indebtedness of
the Founding Companies with a weighted average interest rate of 9.3%, and the
remaining proceeds will be used for general corporate purposes, including
working capital and future acquisitions. Any net proceeds received from the
exercise of the Underwriters' over-allotment option will be used for future
acquisitions and for general corporate purposes. See "The Combination" and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Liquidity and Capital Resources -- Supplemental Historical
Combined." Pending application of the net proceeds as described above, the
Company intends to invest the net proceeds in short-term investment grade or
U.S. government interest bearing securities.

21
<PAGE> 23

CAPITALIZATION

The following table sets forth the current maturities of long-term debt and
the capitalization of (i) GRI as of March 31, 1998 (A) on a historical basis and
(B) as adjusted to give effect to planned S Corporation Distributions and (ii)
the Company as of March 31, 1998 (A) on a pro forma combined basis after giving
effect to the Combination and related transactions, and (B) on a pro forma
combined basis after giving effect to the Combination and related transactions,
as adjusted to give effect to the Offering and the application of the estimated
net proceeds therefrom. See "Use of Proceeds." This table should be read in
conjunction with the Unaudited Pro Forma Combined Financial Statements of the
Company and the notes thereto, included elsewhere in this Prospectus.

<TABLE>
<CAPTION>
PRO FORMA
GRI GRI-ADJUSTED AS OF MARCH 31, 1998
HISTORICAL FOR S CORPORATION -----------------------
AS OF DISTRIBUTIONS COMBINED
MARCH 31, 1998 MARCH 31, 1998 COMBINED AS ADJUSTED
-------------- ----------------- -------- -----------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Notes Payable and Current Maturities of
Long-Term Debt....................... $ 931 $1,331 $42,076(1) $12,364
====== ====== ======= =======
Long-Term Debt, net of Current
Maturities........................... $3,720 3,720 $ 6,054 $ 410
------ ------ ------- -------
Stockholders' Equity:
Preferred Stock: $.01 par value,
10,000,000 shares authorized; no
shares issued and outstanding..... -- -- --
Common Stock: $.01 par value,
90,000,000 shares authorized;
6,258,667 shares issued and
outstanding, pro forma combined;
and 10,258,667 shares issued and
outstanding, pro forma combined as
adjusted(2)....................... 1 1 63 103
Additional Paid-In Capital............. 879 545 47,223 95,263
Retained Earnings...................... 398 0 -- --
------ ------ ------- -------
Total Stockholders' Equity... 1,278 546 47,286 95,366
------ ------ ------- -------
Total Capitalization......... $4,998 $4,266 $53,340 $95,776
====== ====== ======= =======
</TABLE>

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

(1) Includes (i) $12.1 million in short-term obligations to reflect that portion
of S Corporation Distributions that will be funded through borrowings and
(ii) $25.7 million in notes payable to the stockholders of the Founding
Companies, representing the cash portion of the Acquisition Consideration to
be paid from the net proceeds of the Offering.
(2) Excludes shares of Common Stock subject to options, of which options to
purchase approximately 560,000 shares of Common Stock will be granted to
employees and directors of the Company immediately following the Offering
and options to purchase 216,300 shares of Common Stock will be issued in the
Combination upon conversion of existing options of GRI. Also excludes
warrants to purchase 65,922 shares of Common Stock that will be issued upon
conversion of outstanding warrants of GRI. See "Management -- 1998 Stock
Option and Restricted Stock Purchase Plan." GRI Historical consists of 1,200
shares, $1 par value of the four affiliates comprising GRI.

22
<PAGE> 24

DIVIDEND POLICY

The Company does not anticipate paying any dividends on its Common Stock in
the foreseeable future. The Company intends to retain earnings to finance the
expansion of its business, to repay indebtedness and for general corporate
purposes. Any payment of future dividends will be at the discretion of the Board
and will depend upon, among other things, the Company's earnings, financial
condition, capital requirements, level of indebtedness, contractual restrictions
with respect to the payment of dividends and other relevant factors. In
addition, the terms of the Company's revolving credit facility to be entered
into concurrently with the consummation of the Offering will restrict the
payment of dividends. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations -- Liquidity and Capital Resources -- Pro
Forma Combined."

DILUTION

At March 31, 1998, after giving effect to the Combination as if it had
occurred at such date, the deficit in pro forma combined net tangible book value
of the Company would have been approximately $17.0 million, or $2.72 per share.
The deficit in pro forma combined net tangible book value is equal to the
aggregate net tangible book value (tangible assets less total liabilities) of
the Company after giving effect to the Combination. The number of shares used
for the per share calculation includes the 6,258,667 shares of Common Stock to
be issued in the Combination but does not include shares to be issued in the
Offering. After giving effect to the Combination and the sale by the Company of
the 4,000,000 shares of Common Stock offered hereby and after deducting
underwriting discounts and commissions and estimated offering expenses payable
by the Company, the pro forma combined net tangible book value of the Company
would have been $31.1 million, or $3.03 per share. This represents an immediate
increase in pro forma net tangible book value of $5.75 per share to existing
stockholders and an immediate dilution in pro forma net tangible book value of
$10.97 per share to new investors purchasing the shares of Common Stock in the
Offering. The following table illustrates this per share dilution:

<TABLE>
<S> <C> <C>
Assumed initial public offering price............................ $14.00
Pro forma combined net tangible book value prior to the
Offering............................................. (2.72)
Increase in pro forma net tangible book value
attributable to new investors........................ 5.75
-----
Pro forma combined net tangible book value after the Offering.... 3.03
------
Dilution to new investors........................................ $10.97
======
</TABLE>

The following table sets forth on a pro forma basis, after giving effect to
the Combination as of March 31, 1998, the number of shares of Common Stock
purchased from the Company, the total consideration to the Company and the
average price per share paid to the Company by (i) existing stockholders of the
Founding Companies and (ii) the new investors purchasing Common Stock from the
Company in the Offering (before deducting underwriting discounts and commissions
and estimated Offering expenses):

<TABLE>
<CAPTION>
SHARES PURCHASED
-------------------- TOTAL AVERAGE PRICE
NUMBER PERCENT CONSIDERATION PER SHARE
---------- ------- ------------- -------------
<S> <C> <C> <C> <C>
Existing stockholders of Founding
Companies(1)(2)...................... 6,258,667 61.0% $(17,012,000) $(2.72)
New investors.......................... 4,000,000 39.0 56,000,000 14.00
---------- ----- ------------
Total........................ 10,258,667 100.0% $ 38,988,000
========== ===== ============
</TABLE>

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

(1) See "The Combination" for a discussion of the issuance of Common Stock to
the owners of the Founding Companies.
(2) Total consideration paid by the Company to the stockholders of the Founding
Companies represents the combined historical owners' equity of the Founding
Companies before the Combination and the Offering, and has been adjusted to
reflect (i) the payment of $25.7 million in cash to the owners of the
Founding

23
<PAGE> 25

Companies as part of the Acquisition Consideration and (ii) the S
Corporation Distributions of $15.3 million. The Combination excludes certain
assets and operations of the Founding Companies with a net book value of
$1.1 million, not required for the ongoing operations of the Company.

The foregoing tables assume no exercise of outstanding options and
warrants. Upon consummation of the Offering, there will be 216,300 and 65,922
shares of Common Stock issuable upon exercise of options and warrants,
respectively, to purchase shares of Common Stock at average exercise prices of
$6.38 and $.01 per share, respectively. In addition, immediately following the
Offering, the Company will grant options to purchase approximately 560,000
shares of Common Stock to employees and directors of the Company pursuant to the
Company's 1998 Stock Option and Restricted Stock Purchase Plan at an option
price equal to the Offering price per share. See "Management -- 1998 Stock
Option and Restricted Stock Purchase Plan."

24
<PAGE> 26

SELECTED HISTORICAL AND PRO FORMA FINANCIAL DATA

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

The Company will acquire the Founding Companies concurrently with, and as a
condition to, the consummation of the Offering. For financial statement
presentation purposes, GRI has been designated as the "accounting acquirer," and
the historical financial statements of GRI will be regarded as the historical
financial statements of the Company. The following selected historical financial
data for GRI as of October 31, 1996 and 1997, and for the years ended October
31, 1995, 1996 and 1997, have been derived from audited combined financial
statements of GRI included elsewhere in this Prospectus. The selected historical
financial data for the five months ended March 31, 1997 and 1998, and as of
October 31, 1993, 1994 and 1995, and for the years ended October 31, 1993 and
1994, have been derived from the unaudited combined financial statements of GRI,
which have been prepared on the same basis as the audited financial statements
and, in the opinion of management, reflect all adjustments, consisting of normal
recurring items, necessary for a fair presentation of such data. The results of
operations for the periods ended March 31, 1997 and 1998 should not be regarded
as indicative of the results that may be expected for a full year.

The summary unaudited pro forma combined financial data below present
certain financial data for the Company and includes (i) the effects of the
Combination and (ii) the effect of certain other pro forma adjustments to the
historical financial statements. The summary unaudited pro forma combined as
adjusted financial data below includes the effects of the consummation of the
Offering and the application of the net proceeds therefrom. The unaudited pro
forma combined income statement data assume that the Combination, the Offering
and related transactions were closed on January 1, 1997, and are not necessarily
indicative of the results that the Company would have obtained had these events
actually occurred at that date or of the Company's future results. During the
periods presented below, the Founding Companies were not under common control of
management and, therefore, the data presented may not be comparable to or
indicative of results to be achieved by the Company. The unaudited pro forma
combined income statement data are based on preliminary estimates, available
information and certain assumptions that Company management deems appropriate.
The unaudited pro forma combined balance sheet data assume that the Combination
was consummated on March 31, 1998. The unaudited pro forma combined financial
data should be read in conjunction with the other financial information included
elsewhere in this Prospectus. See the Unaudited Pro Forma Combined Financial
Statements and the notes thereto, included elsewhere in this Prospectus.

Because of varying weather patterns, the commercial roofing industry is
seasonal in nature. Typically, because of winter weather during the first and
fourth calendar quarters of each year, the Founding Companies have experienced
periods of relatively lower revenues and gross profits with no corresponding
decrease in selling, general and administrative expenses. See "Management's
Discussion and Analysis of Financial Condition and Results of
Operations -- Seasonal and Cyclical Nature of the Commercial Roofing Industry"
for a more detailed discussion of seasonality.

25
<PAGE> 27

<TABLE>
<CAPTION>
PRO FORMA PRO FORMA
COMBINED COMBINED AS
AS ADJUSTED FIVE MONTHS ENDED ADJUSTED
YEAR ENDED OCTOBER 31,(1) YEAR ENDED MARCH 31, THREE MONTHS
----------------------------------------------- DECEMBER 31, ----------------- ENDED MARCH 31,
1993 1994 1995 1996 1997 1997 1997 1998 1998
------- ------- ------- ------- ------- ------------ ------- ------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Revenues................... $13,649 $18,984 $18,174 $24,810 $26,792 $ 195,909 $11,339 $10,838 $ 39,584
Cost of Revenues........... 10,249 13,900 13,559 17,258 19,101 153,390 7,738 8,016 31,701
------- ------- ------- ------- ------- ----------- ------- ------- -----------
Gross Profit............... 3,400 5,084 4,615 7,552 7,691 42,519 3,601 2,822 7,883
Selling, General and
Administrative
Expenses(2)(3)........... 3,291 5,498 4,955 6,570 6,995 27,497 2,557 3,244 7,587
Goodwill Amortization(4)... -- -- -- -- -- 1,607 -- -- 402
------- ------- ------- ------- ------- ----------- ------- ------- -----------
Income (Loss) from
Operations............... 109 (414) (340) 982 696 13,415 1,044 (422) (106)
Interest and Other Income
(Expense), net(5)........ 61 (86) (73) (22) (71) (531) 15 (176) (134)
------- ------- ------- ------- ------- ----------- ------- ------- -----------
Income (Loss) before Income
Taxes.................... 170 (500) (413) 960 625 12,884 1,059 (598) (240)
Provision for Income
Taxes(6)................. -- -- -- -- -- (5,652) -- -- (64)
------- ------- ------- ------- ------- ----------- ------- ------- -----------
Net Income (Loss).......... $ 170 $ (500) $ (413) $ 960 $ 625 $ 7,232 $ 1,059 $ (598) $ (304)
======= ======= ======= ======= ======= =========== ======= ======= ===========
Basic and Diluted Earnings
(Loss) per Share......... $ 0.70 $ (0.03)
=========== ===========
Shares used in Computing
Pro Forma Net Income
(Loss) per Share(7)...... 10,258,667 10,258,667
</TABLE>

<TABLE>
<CAPTION>
PRO FORMA
HISTORICAL AS OF MARCH 31, 1998
------------------------------------------------------ ---------------------------
AS OF OCTOBER 31, AS OF COMBINED
------------------------------------------ MARCH 31, AS
1993 1994 1995 1996 1997 1998 COMBINED ADJUSTED(8)
------ ------ ------ ------ ------ --------- --------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Working Capital (Deficiency)(5).......... $1,562 $1,161 $ 616 $1,093 $ 447 $1,845 $(23,530)(9) $ 18,906
Total Assets............................. 3,750 4,924 5,280 6,591 7,523 9,394 118,181 130,905
Long-Term Debt net of Current
Maturities(5).......................... 505 666 494 665 767 3,520 6,054 410
Total Stockholders' Equity(5)............ 1,055 683 270 1,140 1,570 1,278 47,286 95,366
</TABLE>

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

(1) Concurrent with the Combination, GRI intends to change its year end from
October 31 to December 31.
(2) The pro forma combined income statement data reflect an aggregate of $3.3
million for the year ended December 31, 1997 and $317,000 for the three
months ended March 31, 1998 in pro forma reductions in salaries, bonuses,
and benefits to the owners and key employees of the Founding Companies. The
owners and key employees have agreed to these reductions effective upon the
Combination. See Note 4 to the Unaudited Pro Forma Combined Financial
Statements.
(3) Includes $498,000, $331,000, and $215,000 of expenses for the build-up of
corporate management and infrastructure during the year ended October 31,
1997, the five months ended March 31, 1998 and the three months ended March
31, 1998, respectively.
(4) Consists of amortization of goodwill to be recorded as a result of the
Combination over a 40-year period and computed on the basis described in
the Notes to the Unaudited Pro Forma Combined Financial Statements.
(5) Several of the Founding Companies are S Corporations. Prior to the
Combination, these Founding Companies will make S Corporation Distributions
totaling $15.3 million. Certain Founding Companies will incur debt of $12.1
million relating to these distributions and, subsequent to the Offering,
such amounts will be repaid from borrowings by the Company. Accordingly,
pro forma interest expense has been increased by $968,000 for the year
ended December 31, 1997 and $242,000 for the three months ended March 31,
1998, pro forma working capital has been reduced by $2.6 million, pro forma
debt has been increased by $12.1 million and pro forma stockholders' equity
has been reduced by $14.9 million. One of the Founding Companies has
declared S Corporation distributions of $434,000 which have been

26
<PAGE> 28

recorded as a dividend payable to shareholder and reduction of
stockholders' equity in the pro forma combined balance sheet data. This
$434,000 is included in the $15.3 million of S Corporation Distributions.
The Combination excludes certain assets and operations of the Founding
Companies with a net book value of $1.1 million, not required for the
ongoing operations of the Company.
(6) Assumes a corporate income tax rate of 39% and the non-deductibility of
goodwill.
(7) Includes 4,000,000 shares of Common Stock offered hereby and 6,258,667
shares to be issued in connection with the acquisition of the Founding
Companies concurrently with the Offering. Excludes 282,222 shares of Common
Stock reserved for issuance upon the exercise of stock options and warrants
to be issued to holders of options and warrants of certain of the Founding
Companies in the Combination. In addition, immediately following the
Offering the Company will grant options to purchase approximately 560,000
shares of Common Stock to employees and directors of the Company pursuant
to the Company's 1998 Stock Option and Restricted Stock Purchase Plan. See
"Management -- 1998 Stock Option and Restricted Stock Purchase Plan."
(8) Adjusted for the sale of the 4,000,000 shares of Common Stock offered
hereby and the application of the estimated net proceeds therefrom. See
"Use of Proceeds."
(9) Includes an aggregate of a $25.7 million of notes payable to the owners of
the Founding Companies, representing the cash portion of the Acquisition
Consideration to be paid from a portion of the net proceeds of the
Offering. Excludes contingent consideration of up to $7.6 million issuable
upon achievement of certain operating performance requirements. See Notes
(3) - (8) of "The Combination."

27
<PAGE> 29

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

The following discussion should be read in conjunction with the historical
financial statements of the Founding Companies, and related notes thereto, and
"Selected Historical and Pro Forma Financial Data" appearing elsewhere in this
Prospectus.

INTRODUCTION

The Company's revenues are derived primarily from comprehensive roofing
services, including re-roofing, restoration and repair, and new roof
construction. The Company also provides limited residential roofing services.
Approximately 65% of the Company's 1997 pro forma revenues were derived from
re-roofing, restoration and repair services, and 35% were derived from new roof
construction. The Company also offers maintenance services, which provide
recurring revenues and ongoing interaction with its customers. Revenues from
fixed-price construction and renovation contracts are generally accounted for on
a percentage-of-completion basis using the cost-to-cost method. The cost-to-cost
method measures the percentage completion of a contract based on total costs
incurred to date compared to total estimated costs to completion. Revenue from
the distribution of products is recognized at the time of delivery. Typically,
because of winter weather during the first and fourth calendar quarters of each
year, the Founding Companies have experienced periods of relatively lower
revenues and gross profits with no corresponding decrease in selling, general
and administrative expenses.

Cost of revenues consists primarily of compensation and benefits to field
staff, materials, subcontracted services, parts and supplies, depreciation, fuel
and other vehicle expenses and equipment rentals. The Company's gross profit
percentage, which is gross profit expressed as a percentage of revenues, depends
primarily on the relative proportions of costs related to labor and materials.
On jobs in which a higher percentage of the cost of revenues consists of labor
costs, the Company typically achieves higher gross margins than on jobs where
materials represent more of the cost of revenues. Margins are also affected by
the competitive bidding process and the technical difficulty of the project. New
roof construction work is more likely to be competitively bid than re-roofing,
restoration and repair. Typically, re-roofing, restoration and repair jobs are
more labor intensive and have higher margins than new roof construction.

Selling, general and administrative expenses consist primarily of
compensation and related benefits for owners, administrative salaries and
benefits, advertising, office rent and utilities, property taxes and
professional fees. The Founding Companies have operated throughout the periods
presented as privately-owned entities and their results of operations reflect
tax structures as S Corporations or C Corporations under the Internal Revenue
Code ("S Corporations" or "C Corporations") which have influenced the historical
level of owners' compensation. Accordingly, selling, general and administrative
expenses as a percentage of revenues may not be comparable among the individual
Founding Companies. Certain owners and key employees of the Founding Companies
have contractually agreed to reductions in their compensation and related
benefits totaling approximately $3.3 million in the year ended December 31, 1997
in connection with the Combination. Such reductions in salaries, bonuses and
benefits have been reflected as a pro forma adjustment in the Unaudited Pro
Forma Combined Statement of Operations presented elsewhere in this Prospectus.

The Company believes that it will realize savings from (i) consolidation of
insurance and bonding programs; (ii) reduction in other general and
administrative expenses, such as training and advertising; (iii) the Company's
ability to borrow at lower interest rates than the Founding Companies; (iv)
consolidation of operations in certain locations; and (v) greater volume
discounts from suppliers of materials, parts and supplies. Offsetting these
savings will be costs related to the Company's new corporate management, costs
of being a public company and costs of integrating the operations of the
Founding Companies.

In July 1996, the Commission issued Staff Accounting Bulletin No. 97 ("SAB
97") relating to business combinations immediately prior to an initial public
offering. SAB 97 requires that these combinations be accounted for using the
purchase method of acquisition accounting. Under SAB 97, the Founding Company
receiving the largest voting position from the shares issued in connection with
the Combination must be designated as the "accounting acquirer." Accordingly,
GRI is the Founding Company that has been
28
<PAGE> 30

designated as the "accounting acquirer" in the Combination. As a result of the
Combination, the excess of the consideration paid over the fair value of the net
assets to be acquired will be recorded as goodwill on the Company's balance
sheet. Goodwill will be amortized as a non-cash charge to the income statement
over a 40-year period. The pro forma impact of this amortization expense, which
is non-deductible for tax purposes, is expected to be approximately $1.6 million
per year. See "Certain Transactions."

SEASONAL AND CYCLICAL NATURE OF THE COMMERCIAL ROOFING INDUSTRY

The construction industry is cyclical and is influenced by seasonal
factors, as construction activities are usually lower during winter months than
other periods. Accordingly, the Company expects its revenues and operating
results generally will be lower in the first and fourth quarters. The Founding
Companies individually have a relatively narrow geographic and customer mix that
can cause significant fluctuations in revenues from period to period based on
weather, timing of customer decisions, age and the condition of its customers'
facilities. After the Combination, the Company will have a broad geographic,
product, and customer mix, which the Company believes will serve to mitigate
cyclical and seasonal trends; however, there can be no assurance that
period-to-period differences will not occur in the future or that cyclical or
seasonal patterns will not emerge. Further, the results of operations for any
interim period (on a combined basis and for each of the Founding Companies) are
not necessarily indicative of the results for a full year.

RETENTION

Retention is typically required by roofing contracts for new commercial
construction. Retention (defined as amounts withheld from progress billings
until final and satisfactory contract completion) is typical on new commercial
construction work for both the sheet metal and roofing operations. Retention
typically ranges from 5% to 10% of the contract, and may be reduced at the time
of final billing of the Company's portion of the contract. The balance may be
held until final close-out of the project, including the work of other
subcontractors. The amount of retention will vary based upon the mix and timing
of contract completion.

GRI

RESULTS OF OPERATIONS -- GRI

GRI operates as a provider of comprehensive roofing services to commercial,
construction and government customers. At the present time, approximately all of
GRI's revenues are generated in Florida.

29
<PAGE> 31

The following table sets forth certain financial data for GRI for the
periods indicated (dollars in thousands).

<TABLE>
<CAPTION>
FIVE MONTHS ENDED
YEAR ENDED OCTOBER 31, MARCH 31,
--------------------------------------------------- ---------------------------------
1995 1996 1997 1997 1998
--------------- --------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues........................ $18,174 100.0% $24,810 100.0% $26,792 100.0% $11,339 100.0% $10,838 100.0%
Cost of Revenues................ 13,559 74.6 17,258 69.6 19,101 71.3 7,738 68.2 8,016 74.0
------- ----- ------- ----- ------- ----- ------- ----- ------- -----
Gross Profit.................... 4,615 25.4 7,552 30.4 7,691 28.7 3,601 31.8 2,822 26.0
Selling, General and
Administrative Expenses....... 4,955 27.3 6,570 26.5 6,995 26.1 2,557 22.6 3,244 29.9
------- ----- ------- ----- ------- ----- ------- ----- ------- -----
Operating Income (Loss)......... (340) (1.9) 982 4.0 696 2.6 1,044 9.2 (422) (3.9)
Net Income (Loss)............... $ (413) (2.3%) $ 960 3.9% $ 625 2.3% $ 1,059 9.3% $ (598) (5.5%)
======= ===== ======= ===== ======= ===== ======= ===== ======= =====
</TABLE>

Five Months Ended March 31, 1998 Compared to the Five Months Ended March 31,
1997

Revenues. Revenues decreased $501,000, or 4.4%, from $11.3 million for the
five months ended March 31, 1997 to $10.8 million for the five months ended
March 31, 1998. This decrease was primarily attributable to the extensive rain
experienced throughout the state of Florida during the five months ended March
31, 1998 which adversely affected the ability of GRI to provide roofing services
during this period.

Gross Profit. Gross profit decreased $779,000, or 21.6%, from $3.6 million
for the five months ended March 31, 1997 to $2.8 million for the five months
ended March 31, 1998. Gross margin decreased from 31.8% for the five months
ended March 31, 1997 to 26.0% for the five months ended March 31, 1998. This
decrease was primarily attributable to the extensive rain experienced throughout
the entire state of Florida adversely affecting the ability of GRI to provide
roofing services. During periods of rain, measures must be taken to monitor and
secure ongoing roofing projects for leaks which adds to the cost of the
projects.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased $687,000, or 26.9%, from $2.6 million for the
five months ended March 31, 1997 to $3.2 million for the five months ended March
31, 1998. This increase was primarily attributable to the enhancement of GRI's
infrastructure to facilitate the Offering and the Combination.

Other Expense. Other expense, net of other income, increased $191,000, or
1,267%, from other income of $15,000 for the five months ended March 31, 1997,
to other expense of $176,000 for the five months ended March 31, 1998. This
increase is primarily attributable to increased interest expense of $145,000
incurred on additional borrowings related to the financing of the expenses
associated with the Offering and the Combination.

Net Income. As a result of the foregoing, net income decreased $1.7
million, or 156.4%, from net income of $1.1 million for the five months ended
March 31, 1997 to a net loss of $598,000 for the five months ended March 31,
1998.

Year Ended October 31, 1997 Compared to the Year Ended October 31, 1996

Revenues. Revenues increased $2.0 million, or 8.0%, from $24.8 million for
the year ended October 31, 1996 to $26.8 million for the year ended October 31,
1997. This increase was primarily attributable to improved sales efforts and the
addition of four new sales associates.

Gross Profit. Gross profit increased $139,000, or 1.8%, from $7.6 million
for the year ended October 31, 1996 to $7.7 million for the year ended October
31, 1997. This increase is primarily attributable to an increase in sales
volume. Gross margin decreased from 30.4% for the year ended October 31, 1996 to
28.7% for the year ended October 31, 1997 as a result of an increase in
competitive market conditions.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased $425,000, or 6.5%, from $6.6 million for the
year ended October 31, 1996 to $7.0 million for the year ended October 31, 1997.
This increase was primarily attributable to the enhancement of GRI's
infrastructure, primarily through the hiring of additional members of
management, to facilitate the Offering and the

30
<PAGE> 32

Combination. In addition, four sales associates were hired during the year ended
October 31, 1997 to facilitate revenue growth.

Other Expense. Other expense, net of other income, increased $49,000, or
224.9%, from $28,000 for the year ended October 31, 1996 to $71,000 for the year
ended October 31, 1997. This increase is primarily attributable to increased
interest expense incurred on additional borrowings related to the financing of
the expenses associated with the Offering and Combination.

Net Income. As a result of the foregoing, net income decreased $335,000,
or 34.9%, from $960,000 for the year ended October 31, 1996 to $625,000 for the
year ended October 31, 1997.

Year Ended October 31, 1996 Compared to the Year Ended October 31, 1995

Revenues. Revenues increased $6.6 million, or 36.5%, from $18.2 million
for the year ended October 31, 1995 to $24.8 million for the year ended October
31, 1996. This increase was primarily attributable to an overall increase in new
roofing projects which resulted from increased sales efforts.

Gross Profit. Gross profit increased $2.9 million, or 63.6%, from $4.6
million for the year ended October 31, 1995 to $7.6 million for the year ended
October 31, 1996. Gross margin increased from 25.4% for the year ended October
31, 1995 to 30.4% for the year ended October 31, 1996. The increase in gross
profit and gross margin is primarily attributable to a shift in the combination
of work from new construction to re-roofing, restoration and repairs.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased $1.6 million, or 32.6%, from $5.0 million for
the year ended October 31, 1995 to $6.6 million for the year ended October 31,
1996. The increase was primarily attributable to the addition of three
administrative personnel to manage the additional volume of projects obtained,
and costs associated with the development and installation of a networked
enterprise information system developed to facilitate the increased revenue
volume of GRI. Selling, general and administrative expenses as a percentage of
revenues remained the same for the year ended October 31, 1995 as compared to
the year ended October 31, 1996.

Other Expense. Other expense, net of other income decreased $51,000, or
70.0%, from $73,000 for the year ended October 31, 1995, to $22,000 for the year
ended October 31, 1996. This decrease is primarily attributable to other income
generated from proceeds received from an insurance settlement.

Net Income. As a result of the foregoing, net income increased $1.4
million, or 332.5%, from a net loss of $413,000 for the year ended October 31,
1995 to net income of $960,000 for the year ended October 31, 1996.

LIQUIDITY AND CAPITAL RESOURCES -- GRI

Five Months Ended March 31, 1998

GRI used $1.4 million of net cash from operating activities for the five
months ended March 31, 1998 as a result of changes in operating assets and
liabilities and a net loss of $548,000, including $194,000 of depreciation and
amortization. Net cash used in investing activities during this period was $1.1
million primarily from deferred costs of the Combination and the Offering of
$808,000 and purchases of property and equipment of $303,000. Net cash generated
by financing activities during this period was $2.4 million primarily from $5.4
million in borrowings of long-term debt, offset by repayments of $2.9 million.
At March 31, 1998, GRI had working capital of $1.8 million and total debt of
$4.7 million. No shareholder distributions were made during the five months
ended March 31, 1998.

Year Ended October 31, 1997

GRI had cash flows from operating activities of $581,000 for the year ended
October 31, 1997 as a result of a decrease of $400,000 resulting from the net
change in operating assets and liabilities and net income of $625,000, including
$380,000 of depreciation and amortization. Net cash used in investing activities
of $1.2 million resulted primarily from the following: (i) the purchases of
property and equipment of $651,000,

31
<PAGE> 33

(ii) deferred costs of the Combination and the Offering of $484,000 and (iii)
advances to a shareholder of $154,000. Net cash generated by financing
activities of $802,000 resulted primarily from $3.6 million in borrowings of
long-term debt, offset by repayments of $2.9 million. At October 31, 1997, GRI
had working capital of $447,433 and total debt of $2.1 million.

Year Ended October 31, 1996

GRI had cash flows from operating activities of $655,000 for the year ended
October 31, 1996 as a result of a decrease of $525,000 resulting from the net
change in operating assets and liabilities and net income of $960,000, including
$214,000 of depreciation and amortization. Net cash used in investing activities
during this period was $463,000 primarily from the purchases of property and
equipment of $404,000 and advances to a shareholder of $59,000. Net cash used in
financing activities during this period was $518,000 primarily from borrowings
of long-term debt of $1.6 million, offset by repayments of $2.0 million and net
distributions to a shareholder of $91,000. At October 31, 1996, GRI had working
capital of $1.1 million and total debt of $909,000.

Year Ended October 31, 1995

GRI had cash flows from operating activities of $401,000 for the year ended
October 31, 1995 as a result of an increase of $647,000 resulting from the net
change in operating assets and liabilities and a net loss of $413,000, including
$175,000 of depreciation and amortization. Net cash used in investing activities
during this period was $109,000 primarily from proceeds from sale of property
and equipment of $146,000, offset by purchases of property and equipment of
$49,000 and advances to a shareholder of $205,000. Net cash used in financing
activities during this period was $60,000 primarily from borrowings of long-term
debt of $1.0 million, offset by repayments of $1.1 million. At October 31, 1995,
GRI had working capital of $616,000 and total debt of $1.1 million.

PRO FORMA COMBINED

RESULTS OF OPERATIONS -- PRO FORMA COMBINED

Pro Forma Combined Results of Operations for the Three Months Ended March 31,
1998

Pro forma combined quarterly revenues were approximately $39.6 million for
the three months ended March 31, 1998, with related pro forma combined gross
profit of approximately $7.9 million and a gross margin of 19.9%. Pro forma
combined selling, general and administrative expenses were approximately $8.0
million for the three months ended March 31, 1998. These expenses, together with
goodwill amortization of approximately $400,000 and interest and other expenses
of $100,000, resulted in a pro forma net loss of approximately $300,000, or
$0.03 per share, for the three months ended March 31, 1998.

Pro Forma Combined Results of Operations for 1997

Pro forma combined revenues were approximately $195.9 million for the year
ended December 31, 1997, with related pro forma combined gross profit of
approximately $42.5 million and a gross margin of 21.7%. Pro forma combined
selling, general and administrative expenses were approximately $29.1 million
for the year ended December 31, 1997. These expenses, together with goodwill
amortization of approximately $1.6 million, interest and other expenses of
$500,000 and an income tax provision of approximately $5.7 million resulted in a
pro forma net income of approximately $7.2 million, or $0.70 per share, for the
year ended December 31, 1997.

LIQUIDITY AND CAPITAL RESOURCES -- PRO FORMA COMBINED

The Company's working capital would be $18.9 million as of March 31, 1998,
after the Combination and the Offering. The anticipated cash flows subsequent to
the Combination, together with the net proceeds of the Offering and the credit
facility described below, are expected to be sufficient to satisfy the Company's
anticipated cash requirements for the 12 month period following the Offering.

32
<PAGE> 34

The net proceeds to the Company from the sale of the shares of Common Stock
in the Offering are expected to be $48.1 million. The Company intends to use
$25.7 million to pay the cash portion of the purchase price for the Founding
Companies, and $9.7 million to repay certain outstanding indebtedness of the
Founding Companies, with the remaining proceeds of $12.7 million available for
general corporate purposes, including working capital and future acquisitions.
The Company expects to refinance the $12.1 million of debt assumed from the
Founding Companies. All other debt of the Founding Companies is expected to be
repaid. Pending application of the net proceeds as described herein, the Company
intends to invest the net proceeds in short-term investment grade or U.S.
government interest bearing securities.

The Company has received a commitment letter from Bank of America to
provide a credit facility (the "Credit Facility") to the Company upon completion
of the Offering. According to the terms of the commitment letter, the Credit
Facility will be a three-year revolving credit facility of up to $50.0 million
to be used for working capital, acquisitions, capital expenditures and general
corporate purposes. The amounts borrowed under the Credit Facility will bear
interest at an annual rate, at the Company's option, of either (i) the Base Rate
(which is equal to the greater of the Federal Funds Rate plus .5% or the bank's
published Reference Rate (as defined in the credit agreement)) plus a margin of
(.25%) to .125%, as determined by the ratio of the Company's total debt to
EBITDA (as defined in the credit agreement) or (ii) the London interbank offered
rate ("LIBOR") plus 1.125% to 1.875%, as determined based upon the ratio of the
Company's total debt to EBITDA. A Facility Fee of .25% per annum will be due
quarterly on the average unused portion of the Credit Facility. The Credit
Facility will require that acquisitions exceeding a certain level of cash
consideration be approved by the lender if the total debt to EBITDA ratio is
greater than 2.5, and will restrict the incurrence of additional indebtedness,
restrict the payment of cash dividends and require the Company to comply with
certain financial covenants.

Certain of the stock purchase agreements entered into in connection with
the Combination provide for contingent consideration. During the 24 month period
following the Offering, additional consideration of up to $7.6 million in cash
or shares of Common Stock may be required to be paid to the stockholders of the
Founding Companies. See Notes (3) - (8) of "The Combination." The Company
expects to have available amounts under the Credit Facility to fund such cash
consideration, if earned.

Prior to the Combination, certain Founding Companies which are S
Corporations will make distributions to their owners totaling $15.3 million,
representing substantially all of their previously taxed undistributed earnings
(the "S Corporation Distributions"). The S Corporation Distributions may be
funded from available cash, certain non-operating assets or borrowings by the
Founding Companies. Such borrowings will be refinanced by the Company under the
Credit Facility.

Certain of the Founding Companies have funded their operations and growth
through borrowings under various bank loans and credit facilities. The Company
intends to repay the indebtedness under such loans and credit facilities from
the proceeds of the Offering and to terminate such arrangements promptly
following the Offering. See "Use of Proceeds."

The Company intends to pursue acquisition opportunities on an ongoing
basis. The Company expects to fund future acquisitions through the issuance of
additional Common Stock and borrowings. The Company does not currently have any
plans, arrangements or understandings with respect to any particular
acquisition, except for the Combination. The Company anticipates that its cash
flow from operations will provide cash in excess of the Company's normal working
capital needs, debt service requirements and planned capital expenditures for
equipment.

SUPPLEMENTAL HISTORICAL COMBINED

RESULTS OF OPERATIONS -- SUPPLEMENTAL HISTORICAL COMBINED

The following supplemental unaudited combined operating data of the
Founding Companies for the periods presented do not purport to represent
combined operating activity presented in accordance with generally accepted
accounting principles, but are only a summation of the revenues, cost of
revenues and gross profits of the individual Founding Companies on a historical
basis. The combined operating activity assumes

33
<PAGE> 35

that each of the Founding Companies was combined from the beginning of each
period presented. The combined operating activity also excludes the effect of
pro forma adjustments and, therefore, may not be indicative of the Company's
post-Combination operating activity for a number of reasons during the periods
presented, including the following: (i) the Founding Companies were not under
common control or management, (ii) the Founding Companies were S Corporations or
C Corporations, (iii) the Company incurred incremental costs related to its new
corporate management and the costs of being a public company, (iv) the Company
used the purchase method of accounting to record the Combination, resulting in
the recording and amortization of goodwill, and (v) the combined data has not
reflected the reductions in compensation paid to the owners and key employees of
the Founding Companies, or the potential benefits and cost savings to the
Company for operating as a combined entity.

The following table sets forth certain financial data for the Founding
Companies on a historical basis for the periods indicated (dollars in
thousands).

<TABLE>
<CAPTION>
THREE MONTHS ENDED
FISCAL YEAR(1) MARCH 31,
------------------------------------------------------ -----------------------------------
1995 1996 1997 1997 1998
---------------- ---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SUPPLEMENTAL HISTORICAL
COMBINED:
Revenues....................... $152,184 100.0% $171,510 100.0% $201,220 100.0% $ 40,682 100.0% $ 40,746 100.0%
Cost of Revenues............... 122,726 80.6 135,876 79.2 158,534 78.8 33,106 81.4 32,853 80.6
-------- ----- -------- ----- -------- ----- -------- ----- -------- -----
Gross Profit................... $ 29,458 19.4% $ 35,634 20.8% $ 42,686 21.2% $ 7,576 18.6% $ 7,893 19.4%
======== ===== ======== ===== ======== ===== ======== ===== ======== =====
</TABLE>

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

(1) The fiscal years presented above are the years ended December 31, 1995, 1996
and 1997, except for (i) GRI for which the fiscal years presented are the
years ended October 31, 1995, 1996 and 1997; (ii) Anthony Roofing for which
the fiscal years presented are October 31, 1995, and December 31, 1996 and
1997; (iii) Specialty Associates for which the fiscal years presented are
the year ended June 30, 1995 and the 53-week period ended February 2, 1997
and the 52-week period ended February 1, 1998; (iv) Slavik Butcher for which
the fiscal years presented are the years ended June 30, 1995, 1996 and 1997;
(v) Five-K for which the fiscal years presented are the years ended March
31, 1996, 1997 and 1998; and (vi) Register Roofing for which the fiscal
years presented are the years ended September 30, 1995, 1996 and 1997.

Supplemental Historical Combined Operating Activity for the Three Months Ended
March 31, 1998 Compared to Supplemental Historical Combined Operating Activity
for the Three Months Ended March 31, 1997

Revenues. Although the quarterly operating activity for the three months
ended March 31, 1998 remained relatively constant compared to the three months
ended March 31, 1997, the following fluctuations principally contributed to the
net $100,000 increase in supplemental historical combined revenues: (i) a
$400,000 increase in revenues at C.E.I. primarily attributable to improved sales
efforts in the fourth quarter of 1997 and a mild winter in Colorado in 1998;
(ii) a $300,000 increase in revenues at Register attributable to increased
business with industrial clients; and (iii) combined increases in revenues of
$1.7 million at GRI, Wright-Brown and Advanced Roofing as a result of increased
volume and marketing efforts during the fourth quarter of 1997, all of which
were offset by (i) a decrease of $1.2 million at Specialty Associates resulting
primarily from reduced demand by certain of the Company's customers and greater
than normal activity during the 1997 period; and (ii) a combined $600,000
decrease at Cyclone Roofing and Harrington-Scanlon due to the effects of
unusually adverse weather conditions in Kansas, Missouri, North Carolina and
South Carolina. In addition, revenues of certain other Founding Companies were
adversely affected by severe weather conditions in numerous locations which
resulted in delays in completing scheduled work.

Gross Profit. Supplemental combined gross profit increased $300,000 for
the three months ended March 31, 1998 compared to the three months ended March
31, 1997. Although a portion of this increase is attributable to the slight
increase in revenues, additional increases were realized as a result of higher
gross margin projects, offset by decreases resulting from severe weather
conditions which seriously impacted the productivity of the field workforce.

34
<PAGE> 36

Supplemental Historical Combined Operating Activity for 1997 Compared to
Supplemental Historical Combined Operating Activity for 1996

Revenues. Supplemental combined revenues increased $29.7 million, or
17.3%, from $171.5 million in 1996 to $201.2 million in 1997. This increase is
attributable to the following: (i) a $2.0 million increase in revenues at GRI as
a result of improved sales efforts and the addition of new sales personnel; (ii)
a $2.6 million increase in revenues at C.E.I. attributable to improved economic
conditions and new construction trends throughout all markets; (iii) a $7.5
million increase in revenues at Anthony Roofing resulting from the expansion of
the sales and work force, local school renovation projects, growth in service
and repair work, continued expansion of the sheet metal division, and some
individually significant projects; (iv) a $1.9 million increase in revenues at
Specialty Associates primarily as a result of increased volume; (v) a $5.8
million increase in revenues at Cyclone Roofing attributable to greater bonding
availability, increased estimating capability and higher margin commercial
contracts; (vi) a $2.5 million increase in revenues at Wright-Brown due to an
increase in volume primarily as a result of competitive bidding; (vii) a $1.5
million increase in revenues at Harrington-Scanlon resulting from expansion of
its Arizona operations and its sheet metal operations; (viii) a $1.9 million
increase in revenues at Slavik Butcher resulting from favorable pricing and
increased demand; (ix) a $1.7 million increase in revenues at Five-K
attributable to the hiring of additional personnel and the pursuit of new
business; (x) a $1.5 million increase in revenues at Advanced Roofing resulting
from revenues generated by a subsidiary formed in 1996, a partnership agreement
with a supermarket chain and increased volume resulting from expanded marketing
efforts, and (xi) an increase in revenues of $600,000 at Register Roofing due to
an agreement to be the preferred provider to a major Florida corporation.

Gross Profit. Supplemental combined gross profit increased $7.1 million,
or 19.8%, from $35.6 million in 1996 to $42.7 million in 1997. This increase was
attributable to the following: (i) a $200,000 increase in gross profit at GRI as
a result of an increase in sales volume; (ii) a $700,000 increase in gross
profit attributable to a continuing effort to shift more of C.E.I.'s work to
re-roofing, restoration and repair contracts, which generally result in higher
gross profit margins than new construction contracts; (iii) a $2.6 million
increase in gross profit at Anthony Roofing resulting from the sales expansion
discussed above with a proportionately lower increase in costs; (iv) a $600,000
increase in gross profit at Specialty Associates primarily as a result of
increased profitability on certain contracts; (v) a $1.8 million increase in
gross profit at Cyclone Roofing attributable to increased volume of higher
margin commercial contracts; (vi) a $300,000 increase in gross profit at
Wright-Brown primarily as a result of the increase in sales, slightly offset by
a decrease in margins due to competitive bidding; (vii) a $300,000 increase in
gross profit at Slavik Butcher resulting from favorable pricing related to the
increased demand as well as a contract which resulted in significant losses in
1996; (viii) a $400,000 increase in gross profit at Five-K, consistent with the
increase in sales; (ix) a $500,000 increase in gross profit at Advanced Roofing
as a result of the sales increase, coupled with an increase in gross margins
resulting from higher margin jobs obtained through marketing efforts and
efficiencies in field operations, and (x) no change in Register Roofing's gross
profit despite the increase in sales, as lower margins were realized due to
three projects, one of which was underestimated, and two of which experienced
unanticipated difficulties that resulted in losses. These increases were offset
by a decrease in gross profit of $300,000 at Blackmore & Buckner primarily as a
result of an increase in material cost which was not passed to customers as well
as increased projects from public bids which realize lower margins than
negotiated contracts.

Supplemental Historical Combined Operating Activity for 1996 Compared to
Supplemental Historical Combined Operating Activity for 1995

Revenues. Supplemental combined revenues increased approximately $19.3
million, or 12.7%, from $152.2 million in 1995 to $171.5 million in 1996. This
increase is attributable to the following: (i) a $6.6 million increase in
revenues at GRI as a result of improved sales efforts and additional projects;
(ii) a $2.8 million increase in revenues at C.E.I. primarily attributable to the
continued development of its operations in Michigan and improved economic
conditions at all of its locations; (iii) a $2.0 million increase in revenues at
Specialty Associates primarily as a result of increased demand; (iv) a $1.0
million increase in revenues at Cyclone Roofing attributable to an increase in
bonding availability; (v) a $1.9 million increase in revenues at

35
<PAGE> 37

Wright-Brown due to increased demand and competitive bidding; (vi) a $5.2
million increase in revenues at Harrington-Scanlon resulting from increased new
construction activity, and expansion in Arizona where it began operations in
1995; (vii) a $2.0 million increase in revenues at Slavik Butcher principally
resulting from the general contracting business (which will be excluded from the
Combination); and (viii) a $500,000 increase in revenues at Blackmore & Buckner
due to an increase in volume. These increases were offset by (i) a $1.0 million
decrease in revenues at Five-K attributable to more selective competitive
bidding, (ii) a $1.4 million decrease in revenues at Advanced Roofing as a
result of decreased volume, coupled with management attention being diverted to
the move to new facilities in late 1995 and (iii) a $300,000 decrease in
revenues at Register Roofing due to a decline in the re-roofing market in
northeast Florida and the entrance into the metal roofing market.

Gross Profit. Supplemental combined gross profit increased $6.1 million,
or 21.0%, from $29.5 million in 1995 to $35.6 million in 1996. This increase is
attributable to the following: (i) a $2.9 million increase in gross profit at
GRI as a result of the increase in sales, as well as an increase in margins
attributable to a change in the revenue mix from new construction to re-roofing,
restoration and repairs, which generate higher margins; (ii) a $1.2 million
increase in gross profit at C.E.I. primarily attributable to an effort by
management to concentrate on higher margin re-roofing, restoration and repair
work, coupled with several large new construction contracts in 1995 that were
completed with little or no gross profit; (iii) a $100,000 increase in gross
profit at Specialty Associates primarily as a result of increased revenues; (iv)
an $800,000 increase in gross profit at Wright-Brown due to increased volume at
improved margins; (v) a $600,000 increase in gross profit at Harrington-Scanlon
resulting from increased revenues; (vi) a $500,000 increase in gross profit at
Five-K resulting from several highly profitable jobs; (vii) a $100,000 increase
in gross profit at Advanced Roofing, despite the decrease in revenues, as a
result of abnormally low margins attained in 1995 due to the loss of certain
personnel and the move to new facilities in 1995; (viii) a $300,000 increase in
gross profit at Blackmore & Buckner due to an increase in volume coupled with
improved gross margins and (ix) a $400,000 increase in gross profit at Register
Roofing due to management's concentration on fewer projects with higher margins.
These increases were offset by a $700,000 decrease in gross profit at Anthony
Roofing primarily resulting from lower margin projects in 1996.

FOUNDING COMPANIES OTHER THAN GRI

Note: The following pages discuss the operating results of the Founding
Companies other than GRI, the accounting acquirer. All of the outstanding debt
of the Founding Companies will be repaid and most excess cash and investments
and incidental assets will be distributed to stockholders of the Founding
Companies prior to the Combination. Also, several of the Founding Companies
which are S Corporations have not been subject to corporate income taxes, and
will be subject to corporate income taxes following the Combination. Due to the
nature of these changes, the following discussion does not address interest
income and expense, non-operating income and expense or income tax expense of
the Founding Companies.

Non-operating income of the Founding Companies is primarily comprised of
gains and losses on sales of fixed assets, casualty gains and losses, billings
to related parties for management and administrative services, dividends on cash
surrender value life insurance and self insurance deposits, bad debt recoveries
and other miscellaneous items of income and expense.

C.E.I.

OPERATING RESULTS -- C.E.I.

C.E.I. has facilities and operations in Texas, Florida, Colorado, Michigan
and California. C.E.I.'s revenues are derived from providing maintenance, repair
and restoration, re-roofing and new roof construction services for commercial
customers.

36
<PAGE> 38

The following table sets forth certain financial data for C.E.I. for the
periods indicated (dollars in thousands).

<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
--------------------------------------------------- ---------------------------------
1995 1996 1997 1997 1998
--------------- --------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues......................... $39,694 100.0% $42,525 100.0% $45,163 100.0% $ 9,653 100.0% $10,025 100.0%
Cost of Revenues................. 31,189 78.6 32,852 77.3 34,899 77.3 7,742 80.2 7,733 77.1
------- ----- ------- ----- ------- ----- ------- ----- ------- -----
Gross Profit..................... 8,505 21.4 9,673 22.7 10,264 22.7 1,911 19.8 2,292 22.9
Selling, General and
Administrative Expenses........ 7,289 18.4 7,699 18.1 8,018 17.8 1,933 20.0 2,105 21.0
------- ----- ------- ----- ------- ----- ------- ----- ------- -----
Operating Income (Loss).......... $ 1,216 3.1% $ 1,974 4.6% $ 2,246 5.0% $ (22) (0.2)% $ 186 1.9%
======= ===== ======= ===== ======= ===== ======= ===== ======= =====
</TABLE>

Three Months Ended March 31, 1998 Compared to the Three Months Ended March 31,
1997

Revenues. Revenues increased $372,000, or 3.9%, from $9.7 million for the
three months ended March 31, 1997 to $10.0 million for the three months ended
March 31, 1998. This increase was primarily attributable to a significant
increase in sales from the Colorado operations due primarily to increased sales
efforts in the fourth quarter of 1997 and a mild winter in Colorado in 1998. The
revenue gains in Colorado were offset by revenue declines in Texas and Florida
due principally to record amounts of rainfall in these locations.

Gross Profit. Gross profit increased $381,000, or 20.0%, from $1.9 million
for the three months ended March 31, 1997 to $2.3 million for the three months
ended March 31, 1998. Gross margin increased from 19.8% for the three months
ended March 31, 1997 to 22.9% for the three months ended March 31, 1998. The
increase in gross profit was primarily attributable to higher gross profit
repair work due principally to the record amounts of rainfall in Texas and
Florida. In addition, management has implemented procedures to more closely
monitor jobs in process to control costs.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased $172,000, or 8.9%, from $1.9 million for the
three months ended March 31, 1997 to $2.1 million for the three months ended
March 31, 1998. This increase was primarily attributable to salary increases and
variable cost increases associated with increasing revenues.

Year Ended December 31, 1997 Compared to the Year Ended December 31, 1996

Revenues. Revenues increased $2.6 million, or 6.2%, from $42.5 million for
the year ended December 31, 1996 to $45.2 million for the year ended December
31, 1997, primarily from increased activity in the Colorado, Michigan and
California operations and from improved economic conditions and construction
trends.

Gross Profit. Gross profit increased $591,000, or 6.1% from $9.7 million
for the year ended December 31, 1996 to $10.3 million for the year ended
December 31, 1997. Gross margins remained constant at 22.7% for the years ended
December 31, 1996 and 1997, respectively. The increase in gross profit was
primarily attributable to a continuing effort to shift more of C.E.I.'s work to
re-roofing, restoration and repair contracts, which generally result in higher
gross profit margins than new roof construction contracts.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased $319,000, or 4.1%, from $7.7 million for the
year ended December 31, 1996 to $8.0 million for the year ended December 31,
1997. This increase was primarily attributable to variable costs increases
associated with increasing revenues.

Year Ended December 31, 1996 Compared to the Year Ended December 31, 1995

Revenues. Revenues increased $2.8 million, or 7.1%, from $39.7 million for
the year ended December 31, 1995 to $42.5 million for the year ended December
31, 1996. This increase was primarily attributable

37
<PAGE> 39

to the continued development of C.E.I.'s operations in Michigan and improved
economic conditions in all of C.E.I.'s locations.

Gross Profit. Gross profit increased $1.2 million, or 13.7%, from $8.5
million for the year ended December 31, 1995 to $9.7 million for the year ended
December 31, 1996. Gross margin increased from 21.4% for the year ended December
31, 1995 to 22.7% for the year ended December 31, 1996. The increase in gross
profit was primarily attributable to an effort by management to concentrate on
higher margin re-roofing, restoration and repair work. Additionally, in 1995,
the Colorado operations had several large new roof construction contracts that
were completed with little or no gross profit.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased $410,000, or 5.6%, from $7.3 million for the
year ended December 31, 1995 to $7.7 million for the year ended December 31,
1996. The increase was primarily attributable to variable costs increases
associated with increasing revenues.

LIQUIDITY AND CAPITAL RESOURCES -- C.E.I.

C.E.I. generated approximately $300,000 of net cash from operating
activities for the three months ended March 31, 1998. Net cash used in investing
activities during this period was $53,000 primarily from the purchase of
equipment. Net cash used in financing activities during this period was $515,000
and principally from the payment of dividends to stockholders. C.E.I. had
various lines of credit allowing for borrowings up to $1.3 million, of which
$300,000 was drawn at March 31, 1998. C.E.I.'s working capital was $3.3 million
at March 31, 1998.

C.E.I. generated approximately $1.8 million in cash from operations for the
year ended December 31, 1997. This increase was primarily attributable to an
increase in contract billings and retainage. Net cash used in investing
activities during this period was $374,000 resulting from purchases of property
and equipment. Net cash used in financing activities during this period was $1.5
million resulting from the payments of dividends to stockholders during the
year. C.E.I.'s working capital was $3.3 million, including $80,000 drawn under
its $1.3 million line of credit at December 31, 1997.

ANTHONY ROOFING

OPERATING RESULTS -- ANTHONY ROOFING

Anthony Roofing was founded in 1979 and is headquartered in Aurora,
Illinois. Although Anthony Roofing operates primarily in Illinois, approximately
20% of its projects were located in other geographic regions of the United
States. Anthony Roofing operates as a provider of comprehensive roofing services
to commercial, construction, and government customers.

The following table sets forth certain financial data for Anthony Roofing
for the periods indicated (dollars in thousands).

<TABLE>
<CAPTION>
FOURTEEN MONTH THREE MONTHS ENDED
PERIOD ENDED YEAR ENDED DECEMBER 31, MARCH 31,
DECEMBER 31, --------------------------------- -------------------------------
1995 1996 1997 1997 1998
------------------- --------------- --------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues...................... $13,310 100.0% $12,226 100.0% $19,778 100.0% $2,524 100.0% $2,489 100.0%
Cost of Revenues.............. 9,916 74.5 9,507 77.8 14,441 73.0 2,242 88.8 2,132 85.7
------- ----- ------- ----- ------- ----- ------ ----- ------ -----
Gross Profit.................. 3,394 25.5 2,719 22.2 5,337 27.0 282 11.2 357 14.3
Selling, General and
Administrative Expenses..... 1,915 14.4 2,086 17.1 2,870 14.5 372 14.7 445 17.9
------- ----- ------- ----- ------- ----- ------ ----- ------ -----
Operating Income (Loss)....... $ 1,479 11.1% $ 633 5.2% $ 2,467 12.5% $ (90) (3.6%) $ (88) (3.5%)
======= ===== ======= ===== ======= ===== ====== ===== ====== =====
</TABLE>

Three Months Ended March 31, 1998 Compared to the Three Months Ended March 31,
1997

Revenues. Revenues of $2.5 million for the three months ended March 31,
1998 were essentially unchanged from the three months ended March 31, 1997.

38
<PAGE> 40

Gross Profit. Gross profit increased $75,000, or 26.6%, from $282,000 for
the three months ended March 31, 1997 to $357,000 for the three months ended
March 31, 1998. Gross margin increased from 11.2% for the three months ended
March 31, 1997 to 14.3% for the three months ended March 31, 1998. These
increases were primarily attributable to improved profit margins on contracts
during the first quarter of 1998.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased $73,000, or 19.6%, from $372,000 for the three
months ended March 31, 1997 to $445,000 for the three months ended March 31,
1998. This increase was primarily attributable to increased salaries for
employees, the addition of sales and executive personnel as part of Anthony
Roofing's growth plan and variable cost increases associated with increasing
revenues.

Year Ended December 31, 1997 Compared to the Year Ended December 31, 1996

Revenues. Revenues increased $7.6 million, or 61.8%, from $12.2 million
for the year ended December 31, 1996 to $19.8 million for the year ended
December 31, 1997. This increase was primarily attributable to the expansion of
the sales and work force, local school renovation projects, growth in service
and repair work and the continued expansion of the sheet metal division and
certain other significant projects. Anthony Roofing had three projects in 1997
with revenues in excess of $1.0 million and had a series of contracts with one
customer that resulted in revenues of $2.7 million in 1997.

Gross Profit. Gross profit increased $2.6 million, or 96.3%, from $2.7
million for the year ended December 31, 1996 to $5.3 million for the year ended
December 31, 1997. Gross margin increased from 22.2% for the year ended December
31, 1996 to 27.0% for the year ended December 31, 1997. The increase in gross
profit was primarily attributable to some large contracts being more profitable
than expected and increases in revenues with proportionately smaller increases
in variable costs.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased $784,000, or 37.6%, from $2.1 million for the
year ended December 31, 1996 to $2.9 million for the year ended December 31,
1997. The increase was primarily attributable to increases in compensation and
variable cost increases associated with increasing revenues.

Year Ended December 31, 1996 Compared to the Fourteen-Month Period Ended
December 31, 1995

Anthony Roofing changed its fiscal year end in 1995 from October 31 to
December 31. Consequently, the financial results for the period ended December
31, 1995 represent a 14-month period ended December 31, 1995.

Revenues. Revenues for the unaudited 14-month period ended December 31,
1995 were $13.3 million. Adjusting for the fiscal year-end change, revenues for
the 14-month period ended December 31, 1995 were approximately the same as
revenues for the 14-month period ended December 31, 1996.

Gross Profit. Gross profit decreased $675,000, or 2.0%, from $3.4 million
for the unaudited 14-month period ended December 31, 1995 to $2.7 million for
the year ended December 31, 1996. Gross profit margin declined from 25.5% for
the 14-month period ended December 31, 1995 to 22.2% for the year ended December
31, 1996.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased $171,000, or 8.9%, from $1.9 million for the
14-month period ended December 31, 1995 to $2.1 million for the year ended
December 31, 1996. This increase is primarily attributable to increases in
compensation. Excluding compensation and a $60,000 increase in bad debts,
selling, general and administrative expenses would have decreased 11% during the
year ended December 31, 1996.

LIQUIDITY AND CAPITAL RESOURCES -- ANTHONY ROOFING

Anthony Roofing generated approximately $661,000 of net cash from operating
activities for the three months ended March 31, 1998. Net cash used in investing
activities was approximately $68,000 during this period and was used primarily
for the purchase of equipment. Net cash used in financing activities was

39
<PAGE> 41

nominal during this period as essentially no shareholder distributions were
made. At March 31, 1998, Anthony Roofing had working capital of $4.7 million. At
March 31, 1998, Anthony Roofing had a line of credit in the amount of $1.5
million available for liquidity needs. There were no amounts outstanding under
this line at March 31, 1998.

Anthony Roofing generated $2.2 million from operating activities for the
year ended December 31, 1997. Net cash used in investing activities during this
period was $158,000 primarily from additions to property and equipment. Net cash
used in financing activities during this period was $976,000 primarily from
repayment of bank borrowings of $803,000 and distributions to shareholders of
$173,000. At December 31, 1997, Anthony Roofing had no debt outstanding.

Retention for Anthony Roofing typically ranges from $300,000 to $800,000.
Retention was $608,000 at March 31, 1998.

SPECIALTY ASSOCIATES

OPERATING RESULTS -- SPECIALTY ASSOCIATES

Specialty Associates and its affiliate, SAI Wholesale Distributors, Inc.,
were founded in 1975 and 1977, respectively, and are headquartered in West
Allis, Wisconsin. The companies have common management and facilities. Specialty
Associates operates primarily in southeastern Wisconsin and northern Illinois
although Specialty Associates has also performed work throughout the continental
United States. Specialty Associates is a construction contractor whose principal
business is commercial roofing, architectural sheet metal fabrication and
residential roofing.

The following table sets forth certain financial data for Specialty
Associates for the periods indicated (dollars in thousands).

<TABLE>
<CAPTION>
NINE WEEKS ENDED
53-WEEK 52-WEEK --------------------------------
PERIOD ENDED PERIOD ENDED APRIL 6, APRIL 5,
FEB 2, 1997 FEB 1, 1998 1997 1998
--------------- --------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues........................................ $15,306 100.0% $17,197 100.0% $2,394 100.0% $1,541 100.0%
Cost of Revenues................................ 13,659 89.2 14,957 87.0 2,213 92.4 1,439 93.4
------- ----- ------- ----- ------ ----- ------ -----
Gross Profit.................................... 1,647 10.8 2,240 13.0 181 7.6 102 6.6
Selling, General and Administrative Expenses.... 1,236 8.1 1,486 8.6 188 7.9 212 13.8
------- ----- ------- ----- ------ ----- ------ -----
Operating Income (Loss)......................... $ 411 2.7% $ 754 4.4% $ (7) (0.3)% $ (110) (7.1)%
======= ===== ======= ===== ====== ===== ====== =====
</TABLE>

Nine Weeks Ended April 5, 1998 Compared to the Nine Weeks Ended April 6, 1997

Revenues. Revenues decreased $853,000, or 35.6%, from $2.4 million for the
nine weeks ended April 6, 1997 to $1.5 million for the nine weeks ended April 5,
1998. This decrease was primarily attributable to reduced demand by certain of
the Specialty Associates' customers. Revenues have historically been lower
during the first nine weeks of the fiscal year due to weather conditions.

Gross Profit. Gross profit decreased $79,000, or 43.6%, from $181,000
during the nine weeks ended April 5, 1997 to $102,000 for the nine weeks ended
April 5, 1998. Gross margin decreased from 7.6% for the nine weeks ended April
6, 1997 to 6.6% for the nine weeks ended April 5, 1998. This decrease is
primarily attributable to lower demand and decreased profit on contracts.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased $24,000, or, 12.8%, from $188,000 for the nine
weeks ended April 5, 1997 to $212,000 for the nine weeks

40
<PAGE> 42

ended April 5, 1998. This increase is primarily attributable to an increase in
salaries for employees and an increase in professional fees.

52-Week Period Ended February 1, 1998 Compared to the 53-Week Period Ended
February 2, 1997

Revenues. Revenues increased $1.9 million, or 12.4%, from $15.3 million
for the 53-week period ended February 2, 1997 to $17.2 million for the 52-week
year ended February 1, 1998. This increase is primarily attributable to
increased demand and was partially offset by the length of the 1998 period being
one week less than the 1997 period.

Gross Profit. Gross profit increased $593,000, or 36.0%, from $1.6 million
for the 53-week period ended February 2, 1997 to $2.2 million for the 52-week
period ended February 1, 1998. Gross margin increased from 10.8% for the 53-week
period ended February 2, 1997 to 13.0% for the 52-week period ended February 1,
1998. This increase is primarily attributable to increased profitability on
certain contracts.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased $250,000, or 20.2%, from $1.2 million during
the 53-week period ended February 2, 1997 to $1.5 million for the 52-week period
ended February 1, 1998. The increase was primarily attributable to increased
discretionary bonuses, including bonuses to owners and managers and additional
costs associated with increased business volume.

LIQUIDITY AND CAPITAL RESOURCES -- SPECIALTY ASSOCIATES

Specialty Associates used approximately $143,000 of net cash from operating
activities for the nine weeks ended April 5, 1998, primarily for working
capital. Net cash used in investing activities during this period was $12,000.
Net cash provided from financing activities during this period was $50,000
primarily from net borrowings on Specialty Associates' line of credit. No
stockholder distributions were made during this period. Specialty Associates had
working capital of $219,000, including $800,000 drawn under its credit and
$671,000 of long-term debt, including current maturities of $202,000 at April 5,
1998.

Specialty Associates generated $777,000 in net cash from operating
activities for the 52-week period ended February 1, 1998. Net cash used in
investing activities during this period was $607,000 primarily from additions to
property and equipment. Net cash used in financing activities during this period
was $43,000 primarily from the purchase of treasury stock of $46,000. No
stockholder distributions were made during this period. Specialty Associates had
$700,000 drawn under its line of credit and long-term debt of $721,000,
including current maturities of $202,000 at February 1, 1998.

Retention for Specialty Associates typically ranges from $300,000 to
$500,000. Retention was $489,000 at April 5, 1998.

CYCLONE ROOFING

OPERATING RESULTS -- CYCLONE ROOFING

Cyclone Roofing operates as a provider of comprehensive roofing services to
commercial, industrial, manufacturing, construction and government customers.

The following table sets forth certain financial data for Cyclone Roofing
for the periods indicated (dollars in thousands).

<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
---------------------------------------------------- --------------------------------
1995 1996 1997 1997 1998
-------------- --------------- --------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues.......................... $9,243 100.0% $10,254 100.0% $16,057 100.0% $3,085 100.0% $2,829 100.0%
Cost of Revenues.................. 7,618 82.4 8,538 83.3 12,523 78.0 2,584 83.8 2,457 86.9
------ ----- ------- ----- ------- ----- ------ ----- ------ -----
Gross Profit...................... 1,625 17.6 1,716 16.7 3,534 22.0 501 16.2 372 13.1
Selling, General and
Administrative Expenses......... 683 7.4 1,157 11.3 1,099 6.8 227 7.4 227 8.0
------ ----- ------- ----- ------- ----- ------ ----- ------ -----
Operating Income.................. $ 942 10.2% $ 559 5.5% $ 2,435 15.2% $ 275 8.9% $ 144 5.1%
====== ===== ======= ===== ======= ===== ====== ===== ====== =====
</TABLE>

41
<PAGE> 43

Three Months Ended March 31, 1998 Compared to the Three Months Ended March 31,
1997

Revenues. Revenues decreased $256,000, or 8.3%, from $3.1 million for the
three months ended March 31, 1997, to $2.8 million for the three months ended
March 31, 1998. This decrease was primarily attributable to adverse weather in
North and South Carolina.

Gross Profit. Gross profit decreased $129,000, or 25.7%, from $501,000 for
the three months ended March 31, 1997 to $372,000 for the three months ended
March 31, 1998. Gross margin decreased from 16.2% for the three months ended
March 31, 1998 to 13.1% for the three months ended March 31, 1998. The decrease
in gross profit is consistent with the decrease in revenues and a decrease in
the amount of higher margin commercial contracts in relation to the total work
performed by the company.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses remained constant at $227,000, or 7.4% and 8.0% of
revenues, for the three months ended March 31, 1997 and March 31, 1998,
respectively.

Year Ended December 31, 1997 Compared to the Year Ended December 31, 1996

Revenues. Revenues increased $5.8 million, or 56.6%, from $10.3 million
for the year ended December 31, 1996 to $16.1 million for the year ended
December 31, 1997. This increase was primarily attributable to the company's
ability to increase the amount of its bonding availability, an increase in the
company's estimating capacity and increased customer demand for higher margin
commercial projects.

Gross Profit. Gross profit increased $1.8 million, or 105.9%, from $1.7
million for the year ended December 31, 1996 to $3.5 million for the year ended
December 31, 1997. Gross margin increased from 16.7% for the year ended December
31, 1996 to 22.0% for the year ended December 31, 1997. This increase is
consistent with the increase in revenues and the increased demand for the higher
margin commercial contracts. In addition, the company was able to obtain
contracts on several large and complex commercial projects with higher gross
margins.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses decreased $58,000, or 5.0%, from $1.2 million for the
year ended December 31, 1996 to $1.1 million for the year ended December 31,
1997. The decrease was primarily attributable to a decrease in the bonus paid to
the company's president. Selling, general and administrative expenses as a
percentage of revenues decreased from 11.3% for the year ended December 31, 1996
to 6.8% for the year ended December 31, 1997. Excluding the bonus paid to the
president, selling, general and administrative expenses as a percentage of
revenues would have been 8% for the year ended December 31, 1996.

Year Ended December 31, 1996 Compared to the Year Ended December 31, 1995

Revenues. Revenues increased $1.0 million, or 10.9%, from $9.2 million for
the year ended December 31, 1995, to $10.3 million for the year ended December
31, 1996. This increase was primarily attributable to the company's ability to
increase the amount of its bonding availability.

Gross Profit. Gross profit increased $91,000, or 5.6%, from $1.6 million
for the year ended December 31, 1995 to $1.7 million for the year ended December
31, 1996. Gross margin decreased from 17.6% for the year ended December 31, 1995
to 16.7% for the year ended December 31, 1996. The change in gross profit and
gross margin is consistent with the increase in revenues and the mix of
commercial contracts.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased $474,000, or 69.4%, from $683,000 for the year
ended December 31, 1995 to $1.2 million for the year ended December 31, 1996.
This increase was primarily attributable to an increase in the bonus paid to the
company's president and the hiring of additional estimators and salesmen.

LIQUIDITY AND CAPITAL RESOURCES -- CYCLONE ROOFING

Cyclone Roofing generated approximately $88,000 of net cash from operating
activities for the three months ended March 31, 1998. Net cash used in investing
activities was approximately $125,000 for the three
42
<PAGE> 44

months ended March 31, 1998 and was primarily used for the purchase of fixed
assets. Net cash used in financing activities was approximately $413,000 for the
three months ended March 31, 1998, which resulted primarily from distributions
to the sole stockholder of Cyclone Roofing. Cyclone Roofing had a $250,000
revolving demand line of credit as of March 31, 1998 and no amounts were
outstanding under its line of credit. Cyclone Roofing had working capital of
$3.1 million and total debt and capitalized lease obligations of $322,000 at
March 31, 1998.

Cyclone Roofing generated $814,000 of net cash from operating activities
for the year ended December 31, 1997. Increased cash flows from operating
activities for 1997 resulted primarily from significantly greater net income
with offsetting increases in contract receivables and costs and estimated
earnings in excess of billings on contracts in progress and a decrease in
accounts payable. Net cash used in investing activities was $255,000 during this
period primarily for the purchase of fixed assets. Net cash used in financing
activities was $56,000 during this period primarily for repayments of long-term
debt, which were offset by advances on the line of credit. No stockholder
distributions were made during this period. Net cash used in financing
activities was $115,000 during this period primarily for distributions to
stockholders and repayments of long-term debt. Cyclone Roofing had a $250,000
revolving line of credit as of December 31, 1997 that is due on demand. At
December 31, 1997, Cyclone Roofing had no amounts outstanding under its line of
credit. At December 31, 1997, Cyclone Roofing had working capital of $3.6
million and total debt and capitalized lease obligations of $352,000.

Retention for Cyclone Roofing typically ranges from $250,000 to $450,000.
Retention was $733,000 at December 31, 1997.

WRIGHT-BROWN

OPERATING RESULTS -- WRIGHT-BROWN

Wright-Brown was founded in 1951 and is located in Detroit, Michigan. It
operates exclusively in Michigan. Wright-Brown operates as a provider of
comprehensive roofing services to commercial, construction and government
customers.

The following table sets forth certain financial data for Wright-Brown for
the periods indicated (dollars in thousands).

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, THREE MONTHS ENDED MARCH 31,
--------------------------------- -------------------------------
1996 1997 1997 1998
--------------- --------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues............................. $12,820 100.0% $15,316 100.0% $2,135 100.0% $2,447 100.0%
Cost of Revenues..................... 10,630 82.9 12,820 83.7 1,788 83.7 2,113 86.4
------- ----- ------- ----- ------ ----- ------ -----
Gross Profit......................... 2,190 17.1 2,496 16.3 347 16.3 334 13.6
Selling, General and Administrative
Expenses........................... 1,285 10.0 1,393 9.1 393 18.4 307 12.5
------- ----- ------- ----- ------ ----- ------ -----
Operating Income (Loss).............. $ 905 7.1% $ 1,103 7.2% $ (46) (2.1)% $ 27 1.1%
======= ===== ======= ===== ====== ===== ====== =====
</TABLE>

Three Months Ended March 31, 1998 Compared to the Three Months Ended March 31,
1997

Revenues. Revenues increased $312,000, or 14.6%, from $2.1 million for the
three months ended March 31, 1997 to $2.4 million for the three months ended
March 31, 1998. This increase is primarily attributable to increased demand.

43
<PAGE> 45

Gross Profit. Gross profit decreased $13,000, or 3.7%, from $347,000 for
the three months ended March 31, 1997 to $334,000 for the three months ended
March 31, 1998. Gross margin decreased from 16.3% for the three months ended
March 31, 1997 to 13.6% for the three months ended March 31, 1998 as a result of
increased labor costs and the use of subcontractors to meet the increased
operations.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses decreased $86,000, or 21.9%, from $393,000 for the three
months ended March 31, 1997 to $307,000 for the three months ended March 31,
1998. This decrease was primarily attributable to reductions in insurance costs.

Year Ended December 31, 1997 Compared to the Year Ended December 31, 1996

Revenues. Revenues increased $2.5 million, or 19.5%, from $12.8 million
for the year ended December 31, 1996 to $15.3 million for the year ended
December 31, 1997. This increase was primarily due to an increase in demand and
more competitive bidding.

Gross Profit. Gross profit increased $306,000, or 14.0%, from $2.2 million
for the year ended December 31, 1996 to $2.5 million for the year ended December
31, 1997. Gross margin decreased from 17.1% for the year ended December 31, 1996
to 16.3% for the year ended December 31, 1997. This decrease was primarily a
result of an increase in competitive bidding to generate the increase in
contract revenues.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased $108,000, or 8.4%, from $1.3 million for the
year ended December 31, 1996 to $1.4 million for the year ended December 31,
1997. The increase was primarily attributable to an increase in salaries due to
the addition of two positions.

LIQUIDITY AND CAPITAL RESOURCES -- WRIGHT-BROWN

Wright-Brown generated $397,000 of net cash in operating activities for the
three months ended March 31, 1998. Net cash used in investing activities was
approximately $44,000 during this period and was used primarily for the purchase
of property and equipment. Net cash used in financing activities of $285,000
during this period was primarily attributable to distributions to stockholders.
At March 31, 1998, Wright-Brown had working capital of $808,000 and total debt
of $169,000. Additionally, the company had a total of $500,000 available on a
line of credit with no amounts outstanding at March 31, 1998.

Wright-Brown generated $854,000 of net cash in operating activities for the
year ended December 31, 1997. Net cash used in investing activities during this
period was $161,000 primarily for purchases of property and equipment. Net cash
used in financing activities during this period was $950,000 primarily from
distributions to stockholders. At December 31, 1997, Wright-Brown had working
capital of $1.1 million and total debt of $197,000. In addition, at December 31,
1997, there were no amounts outstanding on the line of credit.

HARRINGTON-SCANLON

OPERATING RESULTS -- HARRINGTON-SCANLON

Harrington-Scanlon was founded in 1983 and operates in western Missouri and
eastern Kansas and in the Tucson and Phoenix, Arizona areas. Harrington-Scanlon
operates as a provider of comprehensive roofing services to commercial,
construction and government customers, as well as sheet metal operations.

44
<PAGE> 46

The following table sets forth certain financial data for
Harrington-Scanlon for the periods indicated (dollars in thousands).

<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEAR ENDED MARCH 31,
DECEMBER 31, -------------------------------
1997 1997 1998
--------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Revenues.................................................... $11,816 100.0% $2,654 100.0% $2,369 100.0%
Cost of Revenues............................................ 10,046 85.0 2,186 82.4 2,185 92.2
------- ----- ------ ----- ------ -----
Gross Profit................................................ 1,770 15.0 468 17.6 184 7.8
Selling, General and Administrative Expenses................ 1,550 13.1 329 12.4 377 15.9
------- ----- ------ ----- ------ -----
Operating Income (Loss)..................................... $ 220 1.9% $ 139 5.2% $ (193) (8.1)%
======= ===== ====== ===== ====== =====
</TABLE>

Three Months Ended March 31, 1998 Compared to the Three Months Ended March 31,
1997

Revenues. Revenues decreased $285,000, or 10.7%, from $2.7 million for the
three months ended March 31, 1997 to $2.4 million for the three months ended
March 31, 1998. This decrease is primarily attributable to adverse weather
conditions in Kansas and Missouri during early 1998.

Gross Profit. Gross profit decreased $284,000, or 60.7%, from $468,000 for
the three months ended March 31, 1997 to $184,000 for the three months ended
March 31, 1998. Gross margin decreased from 17.6% for the three months ended
March 31, 1997 to 7.8% for the three months ended March 31, 1998. The decrease
in gross profit is due to adverse weather conditions in early 1998 which
resulted in non-productive time.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased $48,000, or 14.6%, from $329,000 for the three
months ended March 31, 1997 to $377,000 for the three months ended March 31,
1998. This increase is primarily the result of increases in salaries.

LIQUIDITY AND CAPITAL RESOURCES -- HARRINGTON-SCANLON

Harrington-Scanlon generated $6,000 net cash from operating activities
during the three months ended March 31, 1998. Net cash used in investing
activities was $42,000 during this period and was primarily used for the
purchase of property and equipment. Net cash provided by financing activities of
$7,000 during this period was a result of net borrowings. No stockholder
distributions were made during this period. Net working capital at March 31,
1998 was $49,000. Total debt outstanding at March 31, 1998 was $1.5 million,
including current maturities of $573,000. The company has a line of credit in
the amount of $500,000. At March 31, 1998, $75,000 was available under this line
of credit.

Net cash provided by operations was $289,000 for the year ended December
31, 1997. Net cash used in investing activities during this period was $369,000
primarily from purchases of property and equipment. Net cash provided by
financing activities during this period was $105,000 primarily from net
borrowings and $57,000 of stockholder distributions. Net working capital at
December 31, 1997 was $185,000. Total debt outstanding at December 31, 1997 was
$1.5 million including current maturities of $543,000. Harrington-Scanlon had a
line of credit in the amount of $350,000 of which $342,000 had been borrowed at
December 31, 1997.

SLAVIK BUTCHER

OPERATING RESULTS -- SLAVIK BUTCHER

Slavik Butcher, was founded in 1977 and is located in Rochester Hills,
Michigan. It operates primarily in southern Michigan with some operations in
Indiana and Ohio, and operates as a provider of comprehensive roofing services
to commercial, construction, and government customers.

45
<PAGE> 47

The following table sets forth certain financial data for Slavik Butcher
for the periods indicated (dollars in thousands).

<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEAR ENDED MARCH 31,
JUNE 30, -------------------------------
1997 1997 1998
--------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Revenues.................................................... $11,265 100.0% $8,495 100.0% $9,492 100.0%
Cost of Revenues............................................ 9,928 88.1 7,477 88.0 7,744 81.6
------- ----- ------ ----- ------ -----
Gross Profit................................................ 1,337 11.9 1,018 12.0 1,748 18.4
Selling, General and Administrative Expenses................ 1,215 10.8 897 10.6 1,075 11.3
------- ----- ------ ----- ------ -----
Operating Income............................................ $ 122 1.1% $ 121 1.4% $ 673 7.1%
======= ===== ====== ===== ====== =====
</TABLE>

Nine Months Ended March 31, 1998 Compared to the Nine Months Ended March 31,
1997

Revenues. Contract revenues increased $997,000, or 11.7%, from $8.5
million for the nine months ended March 31, 1997 to $9.5 million for the nine
months ended March 31, 1998. This increase was primarily due to favorable
pricing and an increase in demand. Included in Slavik Butcher's operations is a
general contracting business which will be retained by Slavik Butcher's owners
and is excluded from the Combination. See the Unaudited Pro Forma Combined
Financial Statements for the elimination of this activity.

Gross Profit. Gross profit increased $730,000, or 71.7%, from $1.0 million
for nine months ended March 31, 1997 to $1.7 million for the nine months ended
March 31, 1998. Gross margin increased from 12.0% for the nine months ended
March 31, 1997 to 18.4% for the nine months ended March 31, 1998. These
increases were a result of favorable pricing related to the increased demand and
a significant loss contract included in the results for the first nine months of
fiscal year 1997.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased $178,000, or 19.8%, from $897,000 for the nine
months ended March 31, 1997 to $1.1 million for the nine months ended March 31,
1998. The increase is primarily attributable to an increase in office salaries
and related benefits and insurance costs.

LIQUIDITY AND CAPITAL RESOURCES -- SLAVIK BUTCHER

Slavik Butcher generated approximately $345,000 of net cash from operating
activities for the nine months ended March 31, 1998. Net cash used in investing
activities was approximately $227,000 during this period and was used primarily
for the purchase of property and equipment and an advance to a stockholder. Net
cash provided by financing activities of approximately $5,000 during this period
resulted from net borrowings. No stockholder distributions were made during this
period. Slavik Butcher had a total of $350,000 available under lines of credit
with $35,000 outstanding at March 31, 1998. The lines of credit are due on
demand. At March 31, 1998, Slavik Butcher had working capital of $523,000 and
total debt of $224,000 including current maturities of $106,000.

Slavik Butcher generated $74,000 of net cash from operating activities for
the year ended June 30, 1997. Net cash used in investing activities during this
period was $83,000 primarily for the purchase of property and equipment. Net
cash provided by financing activities during this period was $2,000 primarily
from net borrowings. No stockholder distributions were made during this period.
At June 30, 1997 Slavik Butcher had a total of $350,000 available under lines of
credit with $75,000 outstanding. At June 30, 1997, Slavik Butcher had working
capital of $90,000 and total debt of $218,000, including current maturities of
$127,000.

FIVE-K

OPERATING RESULTS -- FIVE-K

Five-K was founded in 1942 and operates as a provider of comprehensive
roofing services to commercial, construction, and government customers. The
company's principal offices are located in Smyrna, Georgia and the majority of
the company's business is transacted with customers in Georgia.

46
<PAGE> 48

The following table sets forth certain financial data for Five-K for the
periods indicated (dollars in thousands).

<TABLE>
<CAPTION>
YEAR ENDED MARCH 31,
--------------------------------------------------
1996 1997 1998
--------------- -------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Revenues.................................................... $10,402 100.0% $9,361 100.0% $11,091 100.0%
Cost of Revenues............................................ 8,053 77.4 6,521 69.7 7,879 71.0
------- ----- ------ ----- ------- -----
Gross Profit................................................ 2,349 22.6 2,840 30.3 3,212 29.0
Selling, General and Administrative Expenses................ 2,226 21.4 2,652 28.3 2,775 25.0
------- ----- ------ ----- ------- -----
Operating Income............................................ $ 123 1.2% $ 188 2.0% $ 437 3.9%
======= ===== ====== ===== ======= =====
</TABLE>

Year Ended March 31, 1998 Compared to the Year Ended March 31, 1997

Revenues. Revenues increased $1.7 million, or 18.5%, from $9.4 million for
the year ended March 31, 1997 to $11.0 million for the year ended March 31,
1998. This increase is primarily attributable to the company hiring an
additional salesman during the year and the acquisition of new business.

Gross Profit. Gross profit increased $372,000, or 13.1%, from $2.8 million
for the year ended March 31, 1997 to $3.2 million for the year ended March 31,
1998. Gross margin decreased from 30.3% for the year ended March 31, 1997 to
29.0% for the year ended March 31, 1998.

Selling, General and Administrative Expenses. Selling, general, and
administrative expenses increased $123,000, or 4.6%, from $2.7 million for the
year ended March 31, 1997 to $2.8 million for the year ended March 31, 1998.
This increase was primarily due to increased compensation.

Year Ended March 31, 1997 Compared to the Year Ended March 31, 1996

Revenues. Revenues decreased $1.0 million, or 10.0%, from $10.4 million
for the year ended March 31, 1996 to $9.4 million for the year ended March 31,
1997. This decrease was primarily the result of more selective competitive
bidding.

Gross Profit. Gross profit increased by $491,000, or 20.9%, from $2.3
million for the year ended March 31, 1996 to $2.8 million for the year ended
March 31, 1997. Gross margin increased from 22.6% for the year ended March 31,
1996 to 30.3% for the year ended March 31, 1997. The increase in gross profit
was primarily attributable to several highly profitable jobs the company
completed during 1997.

Selling, General and Administrative Expenses. Selling, general, and
administrative expenses increased $426,000, or 19.1%, from $2.2 million for the
year ended March 31, 1996 to $2.7 million for the year ended March 31, 1997.
This increase was primarily due to increased compensation.

LIQUIDITY AND CAPITAL RESOURCES -- FIVE-K

Five-K generated approximately $542,000 of net cash from operating
activities for the year ended March 31, 1998. Net cash used in investing
activities during this period was $219,000 primarily for purchases of property
and equipment. Net cash provided by financing activities during this period was
$61,000 which consisted of net borrowings partially offset by shareholder
distributions of $25,000. Working capital at March 31, 1998 totaled $946,000.
Total borrowings at March 31, 1998 were $86,000 including current maturities of
$40,000. Five-K has a line of credit in the amount of $200,000. There were no
borrowings outstanding under this line of credit at March 31, 1998.

Retention for Five-K was $619,105 at March 31, 1998.

ADVANCED ROOFING

OPERATING RESULTS -- ADVANCED ROOFING

Advanced Roofing was founded in 1983 and is headquartered in Fort
Lauderdale, Florida. It operates primarily in Florida, but has completed
projects in Guantanamo Bay, Cuba and the U.S. Virgin Islands.

47
<PAGE> 49

Advanced Roofing operates as a provider of comprehensive roofing services to
commercial, construction, and government customers.

The following table sets forth certain financial data for Advanced Roofing
for the periods indicated (dollars in thousands).

<TABLE>
<CAPTION>
TEN TWO
MONTHS MONTHS YEAR ENDED
YEAR ENDED DECEMBER 31, ENDED ENDED DECEMBER 31,
----------------------------------- OCTOBER 31, DECEMBER 31, ----------------
1995 1996 1997 1997 1997
---------------- ---------------- ----------- ------------ ----------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues............................... $12,078 100.0% $10,682 100.0% $10,203 $1,971 $12,174 100.0%
Cost of Revenues....................... 10,338 85.6 8,843 82.8 8,312 1,515 9,827 80.7
------- ------ ------- ------ ------- ------ ------- ------
Gross Profit........................... 1,740 14.4 1,839 17.2 1,891 456 2,347 19.3
Selling, General and Administrative
Expenses............................. 1,219 10.1 1,317 12.3 1,206 365 1,571 12.9
------- ------ ------- ------ ------- ------ ------- ------
Operating Income....................... $ 521 4.3% $ 522 4.9% $ 685 $ 91 $ 776 6.4%
======= ====== ======= ====== ======= ====== ======= ======
</TABLE>

<TABLE>
<CAPTION>
FIVE MONTHS ENDED
MARCH 31,
--------------------------------
1997 1998
-------------- --------------
<S> <C> <C> <C> <C>
Revenues.................................................... $4,933 100.0% $5,068 100.0%
Cost of Revenues............................................ 4,201 85.2 3,982 78.6
------ ----- ------ -----
Gross Profit................................................ 732 14.8 1,086 21.4
Selling, General and Administrative Expenses................ 676 13.7 756 14.9
------ ----- ------ -----
Operating Income............................................ $ 56 1.1% $ 330 6.5%
====== ===== ====== =====
</TABLE>

Five Months Ended March 31, 1998 Compared to the Five Months Ended March 31,
1997

Revenues. Revenues increased $135,000, or 2.7%, from $4.9 million for the
five months ended March 31, 1997 to $5.1 million for the five months ended March
31, 1998. This increase is primarily attributable to increased marketing efforts
toward the end of 1997 along with an increase in demand for roofing services.

Gross Profit. Gross profit increased $354,000, or 48.4%, from $732,000 for
the five months ended March 31, 1997 to $1.1 million for the five months ended
March 31, 1998. Gross margin increased from 14.8% for the five months ended
March 31, 1997 to 21.4% for the five months ended March 31, 1998. This was
primarily due to (i) a non-recurring workers' compensation claim of
approximately $100,000 that occurred in December 1996 which resulted in lower
than expected margins during that period and (ii) operations of an affiliate
that were commenced during the five-month period ended March 31, 1997.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased $80,000, or 11.8%, from $676,000 for the five
months ended March 31, 1997 to $756,000 for the five months ended March 31,
1998. The increase was attributable to an increase in marketing efforts and
increased administrative staffing.

Year Ended December 31, 1997 Compared to the Year Ended December 31, 1996

Revenues. Revenues increased $1.5 million, or 14.0%, from $10.7 million
for the year ended December 31, 1996 to $12.2 million for the year ended
December 31, 1997. This increase was primarily attributable to increased demand,
revenue generated by an affiliate formed in 1996, expanded marketing efforts and
a preferred provider agreement with a supermarket chain.

Gross Profit. Gross profit increased $508,000, or 27.6%, from $1.8 million
for the year ended December 31, 1996 to $2.3 million for the year ended December
31, 1997. This increase was the result of higher margin jobs obtained through
marketing efforts and efficiencies in field operations. Gross margin increased
from 17.2% for the year ended December 31, 1996 to 19.3% for the year ended
December 31, 1997.

48
<PAGE> 50

Selling, General and Administrative Expenses. Selling, general, and
administrative expenses increased $254,000, or 19.3%, from $1.3 million for the
year ended December 31, 1996 to $1.6 million for the year ended December 31,
1997. The increase was attributable to an increase in marketing efforts, and
increased staffing levels. Increases were also attributable to the start-up of
an affiliate and certain new divisions.

Year Ended December 31, 1996 Compared to the Year Ended December 31, 1995

Revenues. Revenues decreased $1.4 million, or 11.6%, from $12.1 million
for the year ended December 31, 1995 to $10.7 million for the year ended
December 31, 1996. This decrease is primarily attributable to decreased demand,
coupled with the company's relocation to new facilities in late 1995 which
negatively affected revenues in early 1996.

Gross Profit. Gross profit increased $99,000, or 5.7%, from $1.7 million
for the year ended December 31, 1995 to $1.8 million for the year ended December
31, 1996. Gross margin increased from 14.4% for the year ended December 31, 1995
to 17.2% for the year ended December 31, 1996. The increase was attributable to
abnormally low margins attained in 1995 due to expenses associated with loss of
certain personnel and the move to new facilities.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased $98,000, or 8.0%, from $1.2 million during the
year ended December 31, 1995 to $1.3 million during the year ended December 31,
1996. The increase was attributable to increased staffing levels and increases
in salaries.

LIQUIDITY AND CAPITAL RESOURCES -- ADVANCED ROOFING

Advanced Roofing generated approximately $105,000 of net cash from
operating activities for the five months ended March 31, 1998. Net cash used in
investing activities was approximately $34,000 during this period and was used
for purchases of property and equipment. Net cash used in financing activities
of approximately $73,000 during this period resulted primarily from repayments
of long-term debt. Minimal stockholder distributions of $17,000 were made during
this period. At March 31, 1998, Advanced Roofing had working capital of $409,000
and total debt of $1.3 million including current maturities of $728,000. The
company maintains a $500,000 line of credit, of which $400,000 was outstanding
at March 31, 1998. The line of credit expired in June 1998, and Advanced Roofing
has renewed the line of credit with the same financial institution through
August 24, 1998.

BLACKMORE & BUCKNER

OPERATING RESULTS -- BLACKMORE & BUCKNER

Blackmore & Buckner was founded in 1919 and is headquartered in
Indianapolis, Indiana. The principal activities of the company include
installing commercial and residential roofing, repair work on existing and newly
constructed buildings, and metal fabrication. The company performs these
construction activities primarily in Indiana for commercial enterprises.

The following table sets forth certain financial data for Blackmore &
Buckner for the periods indicated (dollars in thousands).

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, THREE MONTHS ENDED MARCH 31,
-------------------------------------------------- --------------------------------
1995 1996 1997 1997 1998
-------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues............................ $7,210 100.0% $7,704 100.0% $7,739 100.0% $1,401 100.0% $1,061 100.0%
Cost of Revenues.................... 5,795 80.4 5,948 77.2 6,321 81.7 1,273 90.9 896 84.4
------ ----- ------ ----- ------ ----- ------ ----- ------ -----
Gross Profit........................ 1,415 19.6 1,756 22.8 1,418 18.3 128 9.1 165 15.6
Selling, General and Administrative
Expenses.......................... 1,161 16.1 1,326 17.2 1,220 15.8 206 14.7 215 20.3
------ ----- ------ ----- ------ ----- ------ ----- ------ -----
Operating Income (Loss)............. $ 254 3.5% $ 430 5.6% $ 198 2.6% $ (78) (5.6)% $ (50) (4.7)%
====== ===== ====== ===== ====== ===== ====== ===== ====== =====
</TABLE>

49
<PAGE> 51

Three Months Ending March 31, 1997 Compared to the Three Months Ending March
31, 1998

Revenues. Revenues decreased $340,000, or 24.3%, from $1.4 million for the
three months ended March 31, 1997 to $1.0 million for the three months ended
March 31, 1998. This decrease was primarily due to the severe weather in Indiana
during March 1998.

Gross Profit. Gross profit increased $37,000, or 28.9%, from $128,000 for
the three months ended March 31, 1997 to $165,000 for the three months ended
March 31, 1998. Gross profit margin increased from 9.1% for the three months
ended March 31, 1997 to 15.6% for the three months ended March 31, 1998. This
increase was due to higher margin work during 1998 offset partially by a lower
volume of work.

Selling, General and Administrative Expenses. Selling, general, and
administrative expenses remained relatively constant for the three months ended
March 31, 1997 and 1998.

Year Ended December 31, 1997 Compared to the Year Ended December 31, 1996

Revenues. Revenues increased $35,000, or less than 1%, from the year ended
December 31, 1996 to the year ended December 31, 1997.

Gross Profit. Gross profit decreased $338,000, or 19.2%, from $1.8 million
for the year ended December 31, 1996 to $1.4 million for the year ended December
31, 1997. Gross margin decreased from 22.8% for the year ended December 31, 1996
to 18.3% for the year ended December 31, 1997 primarily due to an increase in
material cost which was not passed onto the customer and increased revenues from
work which had lower margins than typically realized on negotiated contracts.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses decreased $106,000, or 8.0%, from $1.3 million for the
year ended December 31, 1996 to $1.2 million for the year ended December 31,
1997. This decrease was due primarily to a decrease in commissions paid to
salesmen. Operating income decreased in 1997 due to the lower gross margin
realized on contracts.

Year Ended December 31, 1996 Compared to the Year Ended December 31, 1995

Revenues. Revenues increased $494,000, or 6.9%, from $7.2 million for the
year ended December 31, 1995 to $7.7 million for the year ended December 31,
1996. This increase was primarily due to an increase in the amount of negotiated
contracts completed during 1996 and resulted in an increase in gross profit for
1996 of 24.1% from 1995.

Gross Profit. Gross profit increased $341,000, or 24.1%, from $1.4 million
for the year ended December 31, 1995 to $1.8 million for the year ended December
31, 1996. Gross margin increased from 19.6% for the year ended December 31, 1995
to 22.8% for the year ended December 31, 1996.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased by $165,000, or 14.2%, from $1.2 million for
the year ended December 31, 1996 to $1.3 million for the year ended December 31,
1997. This increase was primarily due to an increase in commissions paid to
salesmen.

LIQUIDITY AND CAPITAL RESOURCES -- BLACKMORE & BUCKNER

Blackmore & Buckner generated approximately $187,000 of net cash from
operating activities for the three months ended March 31, 1998. Net cash used in
investing activities during this period was nominal. Net cash used in financing
activities during this period was $176,000 primarily related to distributions to
stockholders. At March 31, 1998, the company had working capital of $706,000 and
a total debt of $99,000, including current maturities of $22,000. Blackmore &
Buckner has a $500,000 line of credit with a bank, which is available for its
current working capital needs and an $85,000 line of credit to be used for
capital expenditures. The company had no borrowings against the working capital
line at March 31, 1998.

Cash generated from operating activities was $567,000 for the year ended
December 31, 1997. Cash used in investing activities during this period was
$127,000 primarily related to purchases of property and equipment. Cash used in
financing activities during this period was $269,000 primarily related to
distributions to stockholders. Working capital at December 31, 1997 was $919,000
and total debt was $108,000 including current maturities of $23,000. The company
had outstanding borrowings of $27,000 under the equipment line of credit at
December 31, 1997.

50
<PAGE> 52

OPERATING RESULTS -- REGISTER ROOFING

Register Roofing was founded in 1981 and is headquartered in Jacksonville,
Florida. Register Roofing is engaged in the business of general contracting and
commercial roofing throughout the southeastern United States with the majority
of its operations in Florida.

The following table sets forth certain financial data for Register Roofing
for the periods indicated ($ in thousands).

<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30, SIX MONTHS ENDED MARCH 31,
------------------------------------------------ -------------------------------
1995 1996 1997 1997 1998
-------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues.................... $6,533 100.0% $6,187 100.0% $6,832 100.0% 3,044 100.0% $4,169 100.0%
Cost of Revenues............ 5,871 89.9 5,174 83.6 5,792 84.8 2,537 83.3 3,443 82.6
------ ----- ------ ----- ------ ----- ------ ----- ------ -----
Gross Profit................ 662 10.1 1,013 16.4 1,040 15.2 507 16.7 726 17.4
Selling, General and
Administrative Expenses... 592 9.1 804 13.0 1,002 14.7 431 14.2 517 12.4
------ ----- ------ ----- ------ ----- ------ ----- ------ -----
Operating Income............ $ 70 1.1% $ 209 3.4% $ 38 0.6% $ 76 2.5% $ 209 5.0%
====== ===== ====== ===== ====== ===== ====== ===== ====== =====
</TABLE>

Six Months Ended March 31, 1998 Compared to the Six Months Ended March 31,
1997

Revenues. Revenues increased $1.1 million, or 37.0%, from $3.0 million for
the six months ended March 31, 1997 to $4.2 million for the six months ended
March 31, 1998. This increase was primarily due to contracting with industrial
clients which reduced competition and provided the company substantial revenue
increases.

Gross Profit. Gross profit increased $219,000, or 43.2%, from $507,000 for
the six months ended March 31, 1997 to $726,000 for the six months ended March
31, 1998. Gross margin increased from 16.7% for the six months ended March 31,
1997 to 17.4% for the six months ended March 31, 1998. The increase in gross
profit was primarily attributable to higher margins on contracts with industrial
clients.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased $86,000, or 20.0%, from $431,000 for the six
months ended March 31, 1997 to $517,000 for the six months ended March 31, 1998.
This increase correlates with the overall increase in volume.

Year Ended September 30, 1997 Compared to the Year Ended September 30, 1996

Revenues. Revenues increased $645,000, or 10.4%, from $6.2 million for the
year ended September 30, 1996 to $6.8 million for the year ended September 30,
1997. Register Roofing had a strong movement into the industrial re-roofing
market in fiscal 1997. In addition, Register started long-term relationships
with key industrial clients which resulted in larger contracts in 1997.

Gross Profit. Gross profit increased $27,000, or 2.7%, for the year ended
September 30, 1997 as compared to the year ended September 30, 1996. Gross
margin decreased from 16.4% for the year ended September 30, 1996 to 15.2% for
the year ended September 30, 1997. Register Roofing had one large project which
had a loss because costs had been underestimated, and two smaller projects in
central Florida with unanticipated difficulties that caused a loss. These jobs
had an overall effect of substantially reducing gross profits.

51
<PAGE> 53

Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased $198,000, or 24.6%, from $800,000 for the year
ended September 30, 1996 to $1.0 million for the year ended September 30, 1995.
The increase was primarily due to the addition of a key level accounting
position and a warehouse/materials coordinator.

Year Ended September 30, 1996 Compared to the Year Ended September 30, 1995

Revenues. Revenues decreased $346,000, or 5.3%, from $6.5 million for the
year ended September 30, 1995 to $6.2 million for the year ended September 30,
1996. In the first half of fiscal 1996, Register Roofing experienced a decline
in the re-roofing market in northeast Florida. Register Roofing chose not to
increase or hold its present volume by contracting out of town projects, which
usually result in higher costs and lower profit margins. Register Roofing also
entered into the metal roofing market during this period. In the last half of
fiscal 1996, the re-roofing market in northeast Florida began to strengthen.

Gross Profit. Gross profit increased $351,000, or 53.0%, from $662,000 for
the year ended September 30, 1995 to $1.0 million for the year ended September
30, 1996. Gross margin increased from 10.1% for the year ended September 30,
1995 to 16.4% for the year ended September 30, 1996. The increase in gross
profit was primarily attributable to management concentrating on fewer projects
with higher margins. This initiative coupled with a stronger roofing market
helped to increase profitability.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased $212,000, or 35.8%, from $600,000 for the year
ended September 30, 1995 to $800,000 for the year ended September 30, 1996. The
addition of a manager accounted for a significant portion of this increase.

LIQUIDITY AND CAPITAL RESOURCES -- REGISTER ROOFING

During the six months ended March 31, 1998, Register Roofing used $61,000
of cash in operating activities. Net cash used in investing activities during
this period was $122,000 and resulted primarily for purchases of property and
equipment. Net cash provided by financing activities during this period was
$78,000 and resulted primarily from net borrowings under the company's credit
facilities. Working capital at March 31, 1998 totaled $692,000 and total debt
was $177,000 including current maturities.

During the year ended September 30, 1997, Register Roofing generated
$103,000 of cash in operating activities. Cash used in investing activities
during this period was $50,000 and was primarily related to net property and
equipment purchases and deposits made during the year. Cash used in financing
activities during this period was $9,000 and was related to repayments of debt
net of amounts received for stock issuances. Working capital at September 30,
1997 was $536,000 and total debt was $99,000, including current maturities. At
September 30, 1997, the Company had $1,000 outstanding under a $250,000 line of
credit which matured in December 1997.

SEASONAL AND CYCLICAL NATURE OF THE COMMERCIAL ROOFING INDUSTRY

The construction industry is cyclical and is also influenced by seasonal
factors, as construction activities is usually lower during winter months than
other periods. Accordingly, the Company expects its revenues and operating
results generally will be lower in the first and fourth quarters. The Founding
Companies individually have a relatively narrow geographic, product and customer
mix that caused significant fluctuations in revenues from period to period based
on weather, timing of customer decisions, age and the condition of its
customers' facilities. After the Combination, the Company will have a broad
geographic, product, and customer mix, which the Company believes will serve to
mitigate cyclical and seasonal trends; however, there can be no assurance that
period-to-period fluctuations will not occur in the future or that cyclical or
seasonal patterns will not emerge. Further, the results of operations for any
interim period (on a combined basis and for each of the Founding Companies) are
not necessarily indicative of the results for a full year.

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<PAGE> 54

DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS

This Prospectus includes forward-looking statements. All statements other
than statements of historical facts included in this Prospectus, including,
without limitation, statements regarding the Company's competitive strengths,
business strategy, expected benefits of any acquisition, future financial
position, budgets, projected costs and plans and objectives of management for
future operations, are forward-looking statements. In addition, forward-looking
statements generally can be identified by the use of forward-looking terminology
such as "may," "will," "expect," "should," "intend," "estimate," "anticipate,"
"believe," or "continue" or the negative thereof or variations thereon or
similar terminology. Although the Company believes that the expectations
reflected in such forward-looking statements are reasonable, it can give no
assurance that such expectations will prove to have been correct. Important
factors that could cause actual results to differ materially from the Company's
expectations ("cautionary statements") are disclosed under "Risk Factors" and
elsewhere in this Prospectus, including, without limitation, in conjunction with
the forward-looking statements included in this Prospectus. All subsequent
written and oral forward-looking statements attributable to the Company, or
persons acting on its behalf, are expressly qualified in their entirety by the
cautionary statements. The Company undertakes no obligation to update publicly
or revise any forward-looking statements.

YEAR 2000 ISSUE

Several of the Founding Companies are not year 2000-compliant. The Company
has plans to prepare its computer systems and related software to accommodate
sensitive information relating to the year 2000. The Company intends for the
Founding Companies to convert their computer systems as part of its program to
adopt best practices and leverage its propriety enterprise information systems.
The Company expects that any additional costs related to ensuring that such
systems and software will be ready for the year 2000 will not be material to the
financial condition or results of operations of the Company. In addition, the
Company is discussing with its vendors and customers the possibility of any
difficulties which may affect the Company as a result of its vendors and
customers ensuring that their computer systems and software are year 2000-
compliant. To date, no significant concerns have been identified. However, there
can be no assurance that no year 2000-related computer operating problems or
expenses will arise with the Company's computer systems and software or in the
computer systems and software of the Company's vendors and customers.

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<PAGE> 55

BUSINESS

GENERAL

The Company was founded in 1998 to become the leading nationwide provider
of commercial roofing services. Concurrently with, and as a condition to, the
Offering, GRS plans to acquire 18 Founding Companies. The Founding Companies,
which have been in business for an average of approximately 28 years, had pro
forma combined 1997 revenues and income from operations of approximately $195.9
million and $13.4 million, respectively. Following the Combination and the
Offering, the Company will have operations in 20 cities in 12 states, and will
be one of the largest providers of commercial roofing services in the United
States. Combined historical revenues of the Founding Companies grew at a
compound annual growth rate of 14.7% from 1995 through 1997. Management believes
that the Company will have certain competitive advantages as the first public
company seeking to consolidate the commercial roofing industry.

The Company offers a broad range of comprehensive roofing services, which
include re-roofing, restoration and repair, and new roof construction.
Approximately 65% of the Company's 1997 pro forma revenues were derived from
re-roofing, restoration and repair services, and 35% were derived from new roof
construction. The Company also offers maintenance services, which provide
recurring revenues and ongoing interaction with its customers. The majority of
the Company's business is conducted under contracts whose term is generally less
than one year. The Company provides services to customers in a broad range of
industries, including the industrial, office, retail, hospitality, government,
educational and entertainment industries. The Company has performed services for
a broad range of companies, including The Home Depot, Inc., The Walt Disney
Company, U.S. Postal Service, NationsBank, N.A., Bass Hotels & Resorts (Holiday
Inn Hotels), Sea World, AMC Entertainment Inc., General Motors Corporation,
Rockwell International Corp., Ford Motor Company, Chrysler Corporation, The
Coca-Cola Company, U.S. Army, U.S. Navy, Simon DeBartolo Group, Inc., Wal-Mart
Stores, Inc., Sears Roebuck & Company, Abbott Laboratories, Inc., Trammel Crow
Company, Arvida Company, Cushman & Wakefield, Inc., Columbia/HCA Healthcare
Corporation and The University of Michigan.

INDUSTRY OVERVIEW

The Company believes significant opportunities are available to a
well-capitalized, national company employing professionally trained,
customer-oriented roofing personnel and providing a full complement of high
quality commercial services. The commercial roofing industry as a whole has been
characterized by low barriers to entry that result from relatively constant
technology and methods, stable construction practices and pricing and
inconsistent quality and reliability. For this reason, the Company believes that
only those companies which are able to differentiate themselves through quality,
scope and consistency of service will be able to maintain a competitive
advantage. In addition, the relatively large expenditures associated with
roofing systems have led to an increased need for qualified personnel to
install, monitor and service these systems. The cost of recruiting, training and
retaining a sufficient number of qualified roofing personnel makes it more
difficult for small commercial roofing companies to expand their businesses. The
Company also believes the highly fragmented nature of the commercial roofing
industry will provide it with significant opportunities to consolidate a large
number of existing commercial roofing businesses nationwide.

The average useful life of a commercial roof is estimated to be
approximately 14 years. Due to a lack of customer awareness of the savings that
can result from a long-term, consistent roof maintenance program,

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<PAGE> 56

customers and competitors have traditionally taken an all-or-nothing approach to
roofing expenditures. By taking a maintenance-oriented approach to customer
service, the Company will seek to create a more consistent revenue stream, while
providing cost-effective solutions to its customers.

STRATEGY

The Company believes that its size, geographic diversity of operations,
knowledge of local markets and industry relationships will give the Company
significant competitive advantages. Through increased size, the Company believes
that it will have a greater ability to (i) provide services to customers with
locations in multiple markets, (ii) more effectively allocate resources to serve
customers in each of its markets, (iii) attract, train and retain skilled
roofing labor and (iv) achieve economies of scale in the purchase of roofing
material. The Company also believes that increased size will provide operating
and cost efficiencies by allowing it to perform a wide range of functions on a
centralized basis, including administrative functions, such as those relating to
human resources, employee benefits and insurance, as well as purchasing,
accounting and bonding. The Company intends to share best practices among the
Founding Companies and with other companies that it may acquire. The Company
believes that the geographic diversity of its operations will diminish the
effects of local market downturns, offer opportunities to pursue growth in its
existing markets and create a base of expertise and relationships to expand into
new markets. In anticipation of the Combination, one of the Founding Companies
has made a substantial investment in a proprietary, scalable, advanced
enterprise information system to be utilized by the Company, which will provide
critical project status and cost information to all employees on a daily basis
and will provide management with comprehensive reports on substantially all
aspects of the Company's operations.

The Company plans to leverage its experienced management and extensive
relationships within the commercial roofing industry to increase its revenues
through internal growth as well as through the acquisition of additional
commercial roofing companies. The Company has extensive relationships within the
industry, in part through the Founding Companies, all of which are members of
the NRCA, the largest roofing trade organization with approximately 3,200
commercial roofing companies as members. Gregg E. Wallick, the Company's
Chairman of the Board, President and Chief Executive Officer, with more than 18
years of experience in the commercial roofing industry, is a member of the Board
of Directors of the NRCA. Mr. Wallick is also a member of the Board of Governors
of the Alliance for Progress and is a member of its Steering Committee. The
Alliance for Progress is an industry organization that invests funds contributed
by its membership in certain programs, such as special training programs, for
the benefit of the roofing industry and the organization's membership.

Operating Strategy. The Company believes there are significant
opportunities to increase revenues and profitability of the Founding Companies
and subsequently acquired businesses. The key elements of the Company's
operating strategy are:

Establish Regional and National Market Coverage. The Company believes
that the growth of many of the Founding Companies has been restricted due
to the geographic limitations of their existing operations and that the
Company's broad geographic coverage will increase internal growth
opportunities. The Company intends to leverage its geographic diversity to
solicit additional business from existing customers and new business from
new customers that operate on a regional and national basis, such as REITs,
contractors, owners of national chains and roof consultants. The Company
believes that significant demand exists from such companies to utilize the
services of a single commercial roofing service provider and that existing
local and regional relationships can be expanded as the Company develops a
nationwide network.

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<PAGE> 57

Centralize Administrative Functions and Apply Technology. The Company
believes that it will achieve operating and cost efficiencies by performing
a wide range of functions on a centralized basis, including administrative
functions, such as those relating to human resources, employee benefits and
insurance, as well as purchasing, accounting and bonding. The Company also
intends to leverage its proprietary, scalable advanced enterprise
informations system, which will provide management with information on a
daily basis regarding project estimates, materials and labor cost, accounts
receivable and accounts payable tracking, project progress and sales, as
well as comprehensive reports on substantially all aspects of the Company's
operations. Management believes that this system, which was developed by
one of the Founding Companies over a five-year period, will provide the
Company with significant competitive advantages through more accurate job
estimates, enhanced cost awareness and uniform control procedures through
the timely flow of comprehensive project information. Management believes
that this advanced enterprise information system will be fully implemented
and accessible on a Company-wide basis by the end of 1999.

Acquisition Strategy. The Company believes that, due to the highly
fragmented nature of the commercial roofing services industry, it has
significant opportunities to pursue an acquisition strategy and expand in
targeted geographic markets. The Company intends to focus on acquiring
profitable companies with an established customer base and a reputation for
quality that will serve as a platform for the acquisition and integration of
smaller companies. The Company will also seek to acquire companies with
entrepreneurial management philosophies and a willingness to learn and share
improved business practices through open communication. The Company believes
that many commercial roofing businesses that lack the capital necessary to
expand their operations will become acquisition candidates. The Company believes
that it will be attractive to these acquisition candidates because it will
provide (i) information on best practices, (ii) expertise to expand in
specialized markets, (iii) the opportunity to focus on customers and operations
rather than administration, (iv) national name recognition, (v) increased
financial resources, (vi) the opportunity for existing management to have a
continuing role with the Company and (vii) the opportunity to provide services
to the Company's customers in their respective geographic markets. All of the
Founding Companies participate in professional associations, including the NRCA.
The Company intends to capitalize
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<PAGE> 58

on the relationships created within these professional associations and the
combined industry reputation of the Founding Companies to pursue its acquisition
strategy. Through these and other resources, the Company believes it will be
able to identify and attract acquisition candidates that meet the Company's
criteria. Key elements of the Company's acquisition strategy are:

Enter New Geographic Markets. The Company will pursue acquisitions of
companies that are located in new geographic markets, are financially
stable and have the customer base necessary to integrate with or complement
the Company's existing business. The Company also expects that increasing
its geographic presence will allow it to better serve a growing nationwide
base of customers and further reduce the impact on the Company of local and
regional economic cycles, as well as weather-related or seasonal variations
in business.

Expand within Existing Markets. Once the Company has entered a new
market, it will seek to acquire other well-established commercial roofing
businesses operating within that region, including "tuck-in" acquisitions
of smaller companies. The Company believes that tuck-in acquisitions afford
the opportunity to improve its overall cost structure through the
integration of such acquisitions into existing operations as well as to
increase revenues through access to additional specialized markets. Despite
the integration opportunities afforded by such tuck-in acquisitions, the
Company intends to maintain existing business names and identities for
marketing purposes.

The Company reviews on an ongoing basis suitable acquisition opportunities.
However, the Company does not currently have any plans, arrangements or
understandings with respect to any particular acquisition, except for the
Combination.

SERVICES

The Company provides a comprehensive range of commercial roofing services.
The Company employs a knowledgeable and skilled workforce that utilizes
standardized techniques and practices to determine a customer's optimal roofing
solution. These solutions are designed to maximize the 14 average year life of a
new roofing system. Annual maintenance services, which can result in the
identification at an early stage of problems within a roofing system, can add as
many as 10 years to the useful life of a roof through repair and restoration.
The following is a description of the Company's services:

Maintenance. Maintenance involves the physical inspection of an
existing roofing system to determine its current condition, detect
weaknesses and failures and identify any potential future problems. Through
a program of regularly-scheduled annual or semi-annual inspections, the
Company's technicians assist owners in protecting their roofing investments
by seeking to identify damage in its early stages. Early detection of leaks
and roofing system failures makes it possible for the Company to repair and
extend the life of a roofing system through repair or restoration, which is
significantly less expensive and time consuming than re-roofing. The
Company also intends to offer its customers a facility management program
to coordinate maintenance, repair, restoration and re-roofing as needed.
Although direct revenues from these preventive maintenance programs are
relatively minor, the Company believes that these services enable it to
cultivate strong relationships with its customers and establish a basis for
recurring revenues.

Repair. Repair is a process where an existing roofing system has
additions and adjustments made to it, such as caulking, re-coating and
repairing penetrations to fix leaks in the roofing system.

Restoration. Restoration involves the major repair of the roofing
system, including the repair of all penetrations and re-surfacing of the
roof to restore it to serviceable condition. The opportunity to perform
restoration work normally exists two or three years prior to the end of a
roof's life cycle and before significant damage occurs. The Company is able
to inform building owners when a roof is approaching the end of its 14 year
average life cycle through its regularly-scheduled maintenance and repair
program. As many as 10 years can be added to the useful life of the roof
through restoration and the cost of restoration is typically one-half the
cost of re-roofing.

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<PAGE> 59

Re-Roofing. Re-roofing is the process of installing a new roof when a
roofing system fails. Roofing system failure can be caused by a number of
factors, including age, severe weather, poor workmanship, defective
materials, improper specification of a roofing system, abuse and failure to
maintain the roof through inspections. The Company performs re-roofing only
when all repair and restoration alternatives are deemed incapable of
bringing a roof back to serviceable condition, or at the specific request
of a customer.

New Construction. New roof construction involves the construction of
a variety of roofing systems, including metal roofing systems, built-up
roofing membranes and single ply roofing systems. New roof construction
coincides with the construction of a new building.

New commercial roofing work usually begins with either a proposal request
from the building owner, property manager, general contractor or roof
consultant. Initial meetings with the parties allow the roofing contractor to
prepare preliminary and then more detailed design and product specifications,
drawings and cost estimates. Once a project is awarded, it is conducted in
scheduled phases, and progress billings are rendered to the owner of the
building prior to payment, less a retention (defined as amounts withheld from
progress billings until final and satisfactory contract completion) of 5% to 10%
of the construction cost of the project. Actual field work (ordering of
equipment and materials, fabrication or assembly of certain components, delivery
of materials and components to the job site, scheduling of work crews and
inspection and quality control) is coordinated during these phases. The Company
generally provides the materials to be installed as a part of these contracts.

CUSTOMERS

In 1997, the Founding Companies provided commercial roofing services to
more than 5,000 customers, with no one customer accounting for more than 2% of
the Founding Companies' total revenues, and the ten largest customers
representing less than 10% of total revenues. The Founding Companies provide
roofing services to customers having a local, regional and national presence in
a broad range of industries, some of which are listed below:

<TABLE>
<CAPTION>
INDUSTRIAL OFFICE RETAIL HOSPITALITY GOVERNMENT EDUCATIONAL ENTERTAINMENT
- --------------------- ------------------ --------------- -------------- -------------- ----------------- -------------------
<S> <C> <C> <C> <C> <C> <C>
Abbott Laboratories, Arvida Company Barnes & Noble, Bass Hotels & Army Corp. of Dade County AMC Entertainment
Inc. Inc. Resorts Engineers Public Schools Inc.
(Holiday Inn
Hotels)
Anheuser-Busch Bell South Eckerds Best Western U. S. Postal Georgia Institute Harrah's
Companies, Inc. Telecommunications, Corporation International, Service of Technology Entertainment, Inc.
Inc. Inc.
Chrysler Corporation CB Commercial/ Federated Embassy U. S. Air University of Metro-Goldwyn-Mayer
Koll Management Department Suites, Inc. Force Central Florida Studios, Inc.
Services Stores, Inc.
Ford Motor Company Cushman & The Home Depot, Hilton Hotels U.S. Army University of Planet Hollywood
Wakefield, Inc. Inc. Corp. Colorado International, Inc.
General Motors Grubb & Ellis Co. Publix Marriott U.S. Navy University of Sea World
Corporation Supermarkets, International, Miami
Inc. Inc.
Lucent Technologies, Lincoln Properties Sears Roebuck & Ramada Inc. University of United Artists
Inc. Company Company Michigan Corporation
The Coca-Cola Company NationsBank, N.A. Simon-DeBartolo University of Universal Studios,
Group, Inc. South Florida Inc.
SunTrust Bank, Wal-Mart The Walt Disney
N.A. Stores, Inc. Company
Trammel Crow Winn Dixie
Company Stores, Inc.
</TABLE>

The Company intends to continue its emphasis on developing and maintaining
successful long-term relationships with its customers by providing superior,
high-quality service in a professional manner. The Founding Companies currently
serve customers through 22 offices. The Company believes that there are
opportunities to expand its services in other locations through the selective
acquisition of commercial roofing

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<PAGE> 60

companies and that there is demand for the Company to provide services to
existing customers in other locations where they are conducting business.

ENTERPRISE INFORMATION SYSTEMS

In anticipation of the Combination, one of the Founding Companies has made
a substantial investment in a proprietary, scalable, advanced enterprise
information system to be utilized by the Company, which will provide critical
project status and cost information to all employees on a daily basis and will
provide management with comprehensive reports on substantially all aspects of
the Company's operations. The Company's enterprise information system, which has
been developed over a five-year period and has been operational since 1996, is
run in tandem with the Company's accounting system. Each of the Company's
current locations will be networked with a commonly configured work station
electronically linked to all other Company locations and the Company's central
databases, resulting in a centrally managed wide area network. The Company has
developed a comprehensive set of management information databases covering
financial performance, roofing projects budgets, employee productivity, sales
and labor and material costs. Upon implementation, Company management will be
able to access these databases 24 hours-a-day at all locations via the Internet
to analyze substantially all aspects of the Company's operations, including the
performance of acquired businesses. In addition, the job cost and productivity
reports generated by the project management system are posted on bulletin boards
at the Company's headquarters and locations for all personnel to evaluate. Set
forth below is a description of the job cost and productivity reports.

Job Cost Reports. Job cost reports convey the status of a roofing
project and are updated daily. These reports provide feedback to
management, project managers, and personnel on project budgets and enable
them to manage and control material, equipment and labor costs and other
project expenses. These reports also include information on total committed
costs (costs recognized from purchase orders and unposted time cards),
budgeted costs and costs incurred to date. Each cost category in the
summary report is shown in bar graph format and detailed cost reports
specify individual cost items as a line item and highlight the variance
between budgeted and actual costs.

Productivity Reports (Score Cards). These reports offer a consistent,
accurate and fair method of comparing employees, measured by the gross
profit attributable to each employee for a reporting period. Employees are
compared by profit center, division and job classification. These reports
may be generated on a monthly, quarterly and annual basis.

With limited exceptions, in the initial integration stage following the
Combination, the Company intends to continue to operate with the existing
accounting and other computer systems currently in place at the various Founding
Companies. The Company has developed regular financial and operational "flash
reports" and other mechanisms to allow for timely management control and
oversight. The Company will utilize this information to establish and monitor
performance of individual Founding Companies against operating benchmarks and
ratios. The Company will, however, cause each of the Founding Companies to adopt
a uniform chart of accounts and to standardize its budgeting process and reports
so that results among the Founding Companies more easily can be compared and
integrated. The Company believes that its substantial investment in advanced
information technology is unique in the commercial roofing industry and will
continue to create profit improvement opportunities. In addition, where a
Founding Company or a future acquired company has a system in place that is
inadequate for its existing or near term needs, the Company will begin the
migration to a standard that will allow for greater consistency (and a longer
term change to a Company-wide, integrated system). Management believes that the
Company's enterprise information system will be fully implemented and accessible
on a Company-wide basis by the end of 1999. See "Risk Factors -- Dependence on
Enterprise Information Systems."

SALES AND MARKETING

The Company believes that the reputation of the Founding Companies for
providing high-quality services has enabled them to obtain recurring business
through customer referrals and new business. The Company intends to further
develop its maintenance services, which provide higher margins and ongoing
interaction with

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<PAGE> 61

customers. The Company intends to capitalize on cross-marketing and business
development opportunities that it believes will be available to the Company as a
national provider of comprehensive commercial roofing services. The Company
intends to leverage the diverse technical and marketing strengths of individual
Founding Companies to expand the overall penetration of services within those
local markets in which two or more Founding Companies are located. Eventually,
the Company intends to offer comprehensive services from all of its operating
locations.

The Founding Companies use their direct sales force to market their
services in their respective geographic markets. The Company is developing a
marketing and advertising program to establish a national brand identity while
preserving and enhancing the value of the unique and long-standing trade names
and customer identification enjoyed by the individual Founding Companies. The
Company's logo and identifying marks will be featured on service trucks,
marketing materials and advertising of the Founding Companies, but in a manner
that does not detract from the local brand. The Company proposes to develop
market-leading warranty and service programs for the commercial markets, as well
as an aggressive national account sales program focused on national and major
corporations, governmental and private institutions, REITs, real estate
management firms and other multi-location commercial property owners and
managers. The Company has also created a National Accounts Group, which will be
responsible for developing and managing the Company's relationship with
customers having a regional or national presence. The Company will supplement
its sales and marketing activities through participation in industry trade shows
and conferences, direct mail, its Internet website and advertising in local
industry publications and the yellow pages in the markets it serves.

PERSONNEL, TRAINING AND SAFETY

The Company intends to adopt a comprehensive training program, which
provides extensive classroom and on-the-job training programs for its personnel
based on the NRCA's model training program and provides immediate training to
roof laborers in the Company's methods, procedures and standards with an
emphasis on high quality service. These programs will be presented by a special
training team consisting of senior personnel of the Company and the laborers
will be continuously informed of advances in roofing system technology and
techniques and product selection. The Company's training program will also be
designed to ensure that all of its roofing laborers meet safety standards
established by the Company, its insurance carriers and federal, state and local
laws and regulations. The Company has safety supervisors who conduct initial and
continuous comprehensive training classes for all personnel in safety and risk
management. In addition, the safety supervisors work with senior management to
observe and evaluate safety procedures in an effort to constantly improve the
effectiveness of the Company's safety programs. The Company also maintains a
safety report database allowing senior management to oversee safety practices on
a Company-wide level. The Company seeks to have all of its roofing laborers
participate in on-going training seminars and professional education classes.

At March 31, 1998, the Founding Companies had 1,960 full-time employees,
including 1,666 employees in field operations and 294 managers and
administrative employees. Approximately 600 employees in seven of the Founding
Companies are members of unions and work under collective bargaining agreements
which are subject to renegotiation from time to time. The range of expiration
dates for the various collective bargaining agreements to which the Founding
Companies are a party is from May 13, 1996 through May 31, 2001. The agreements
that have expired contain an "evergreen" clause which provides that upon the
expiration of the agreement termination date, the agreement will continue in
force until it is terminated and/or superseded by a new agreement. The purpose
of an "evergreen" clause is to prevent a disruption in an employer's operations
and to preserve the continuity of the terms of the agreement. The Founding
Companies have not experienced any labor-related work stoppage and considers its
relations with its employees to be good. See "Risk Factors -- Availability of
Skilled Roofing Labor."

PURCHASING

The Company believes it will be able to structure volume purchasing
arrangements or otherwise achieve purchasing economies of scale in the following
areas: (i) commercial roofing materials and supplies, (ii) purchase or lease and
maintenance of equipment, including service vehicles, (iii) casualty, liability
and
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<PAGE> 62

health insurance and related benefits and (iv) accounting and legal services.
Each Founding Company will have the opportunity to order products from the
manufacturers or distributors at the discounted rate negotiated by the Company
and, therefore, benefit from the Company's purchasing power while maintaining
existing supplier relationships.

COMPETITION

The commercial roofing industry is highly fragmented with many roofing
contractors competing intensely with the Company on a local basis. In the
future, competition may be encountered from new entrants on a regional or
national level. The Company believes that purchasing decisions in this industry
are based on (i) price, (ii) reputation for reliability and quality of services
provided, (iii) long-term customer relationships, and (iv) range of services
provided. The Company believes that its strategy of becoming a leading national
provider of commercial roofing services will enhance its competitive position.
In addition, the Company believes that its enterprise information systems and
standardized operating procedures provide the Company with a distinct
competitive advantage. The Company believes that the market for its services
will expand as it selectively acquires other roofing businesses.

GOVERNMENT REGULATION

The Company's business and the activities of its roofing contractors are
subject to various federal, state, and local laws, regulations and ordinances
relating to, among other things, the licensing and certification of roofing
contractors, OSHA standards, advertising, building and zoning regulations and
environmental laws and regulations relating to the disposal of demolition debris
and other solid wastes. The Company has not undertaken comprehensive
environmental reviews of all of the individual Founding Companies. Instead, as
to environmental issues, the Company will rely on its own investigations and on
the indemnity obligations of the Stockholders of each of the Founding Companies
contained in the individual Acquisition Agreements. There can be no assurance
that the Company will not discover existing or incur future environmental
claims, any of which could have a material adverse effect on the Company's
business, financial condition and results of operations.

INSURANCE

Upon completion of the Combination, the Company intends to consolidate
insurance policies covering general liability, comprehensive property damage,
workers' compensation, automobile and other risks. The Company believes that
these coverages will be consistent with industry standards and adequate to
insure against the various liability risks of its business. There can be no
assurance, however, that the coverage limits of such insurance policy will be
adequate. A successful claim against the Company in excess of its insurance
coverage could have a material adverse affect on the Company's business
financial condition and results of operations.

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FACILITIES AND VEHICLES

The following table sets forth the principal operating facilities of the
Company:

<TABLE>
<CAPTION>
OWNED/ LEASE
LOCATION SQ. FOOTAGE LEASED EXPIRATION DATE
- -------- ----------- ------ ---------------
<S> <C> <C> <C>
Tempe, AZ......................................... 4,800 Leased March 2000
Tucson, AZ........................................ 4,500 Leased December 1998
Sacramento, CA.................................... 10,000 Leased August 2002
Denver, CO........................................ 7,000 Owned --
DeBary, FL........................................ 10,300 Leased August 1999
Ft. Lauderdale, FL................................ 10,500 Leased December 2001
Jacksonville, FL.................................. 6,000 Owned --
Jacksonville, FL.................................. 5,000 Leased August 1999
Jacksonville, FL.................................. 2,000 Leased December 1999
Orlando, FL....................................... 16,000 Leased December 2005
Pompano Beach, FL................................. 17,000 Leased December 2008
Pompano Beach, FL................................. 6,000 Leased December 2008
Tampa, FL......................................... 13,000 Leased December 2005
Smyrna, GA........................................ 7,500 Leased December 2003
Aurora, IL........................................ 26,000 Leased December 2001
Indianapolis, IN.................................. 5,200 Owned --
Kansas City, KS................................... 12,500 Owned --
Detroit, MI....................................... 26,000 Owned --
Howell, MI........................................ 10,400 Leased August 2000
Rochester Hills, MI............................... 13,000 Leased December 2000
Indian Trail, NC.................................. 12,000 Owned --
Dallas, TX........................................ 11,500 Leased June 2000
West Allis, WI.................................... 24,300 Owned --
</TABLE>

The Company operates a fleet of approximately 530 trucks, vans and other
vehicles. A portion of the Company's fleet consists of rebuilt used vehicles.
The Company retrofits these vehicles by increasing the passenger and cargo space
which allows the Company to minimize the number of vehicles which are required
on roofing jobs.

The Company believes that its facilities and vehicles are generally
well-maintained and adequate for the Company's current operations. See "Certain
Transactions."

LEGAL PROCEEDINGS

The Company and its subsidiaries are, from time to time, parties to various
litigation matters arising in the normal course of its business, most of which
involve claims for personal injury and property damage incurred in connection
with its operations. The Company is not currently involved in any litigation
that the Company believes, based on its examination of such matters, is likely
to have a material adverse effect on its financial condition or results of
operations.

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<PAGE> 64

MANAGEMENT

EXECUTIVE OFFICERS AND DIRECTORS

The following table sets forth certain information with respect to the
executive officers and directors of the Company and those persons who will
become directors, executive officers and key employees of the Company prior to
or upon the consummation of the Offering.

<TABLE>
<CAPTION>
NAME AGE POSITION
- ---- --- --------
<S> <C> <C>
Gregg E. Wallick............ 43 Chairman of the Board, President and Chief Executive
Officer
Eric B. Levine.............. 61 Senior Vice President of Corporate Development
William A. Abberger III..... 41 Senior Vice President of Operations
Dale E. Eby................. 46 Senior Vice President, Chief Financial Officer and
Treasurer
Robert Brooker.............. 34 Vice President of Technology
Angela Pettus............... 31 Vice President of Human Resources Administration
John C. Cook................ 53 President and Chief Executive Officer of C.E.I.
Florida and Director Nominee
Joel A. Thompson............ 45 President and Chief Executive Officer of Anthony
Roofing and Director Nominee
Thomas E. Brown, Jr......... 51 Chairman and Chief Executive Officer of Wright-Brown
and Director Nominee
J. Patrick Millinor, Jr..... 52 Director Nominee
Francis X. Maguire.......... 65 Director Nominee
Charles "Red" Scott......... 70 Director Nominee
David C. Willis............. 66 Director Nominee
Robert G. Shuler............ 34 Director Nominee
</TABLE>

GREGG E. WALLICK has served as the Chairman of the Board, President and
Chief Executive Officer of the Company since its inception. From 1988 until the
Company's inception, Mr. Wallick served as the President and Chief Executive
Officer of GRI, one of the Founding Companies. Mr. Wallick has spearheaded the
Company's consolidation effort. Mr. Wallick has more than 18 years of experience
in the commercial roofing industry. Mr. Wallick is a director of the NRCA and a
member of the Board of Governors of the Alliance for Progress and is a member of
its Steering Committee. Mr. Wallick holds a Bachelor of Business Administration
and a Masters of Business Administration from the University of Miami and is a
former captain of the University of Miami Hurricanes football team.

ERIC B. LEVINE has served as the Senior Vice President of Corporate
Development of the Company since its inception. From June 1997 until the
Company's inception, Mr. Levine served as the Senior Vice President of GRI, one
of the Founding Companies. From June 1990 until he joined the Company, Mr.
Levine served as the President of the Chief Executives Organization, an
international business development and strategic planning consulting firm which
he founded. From 1985 to 1989, Mr. Levine served as the Vice President of
Cincinnati Bell Information Systems. From 1981 to 1985, Mr. Levine served as the
President of Vorwerk USA, a division of Vorwerk AG, a $2 billion computer
products conglomerate engaged in manufacturing and marketing, and as a director
for 12 years. Mr. Levine was the founder and President of Metlec Sales, Inc., a
franchisee of Vorwerk AG, from 1970 to 1981.

WILLIAM A. ABBERGER III has served as the Senior Vice President of
Operations of the Company since its inception. From November 1997 until the
Company's inception, Mr. Abberger served as the Senior Vice President of
Operations of GRI, one of the Founding Companies. From 1981 to 1997, Mr.
Abberger served as the Vice President of the Quality and Productivity
Improvement Group of FMI Corporation, a company

63
<PAGE> 65

which has provided construction consulting services since 1954, where his
responsibilities included providing management consulting and education services
in the construction industry. Mr. Abberger served as a director of FMI
Corporation from 1987 to 1997. Mr. Abberger also currently serves as a member of
the Board of Directors of American General Contractors Association. Mr. Abberger
holds a Bachelor of Science degree from Clarkson College and a Masters of
Business Administration from Dartmouth College.

DALE E. EBY has served as the Senior Vice President, Chief Financial
Officer and Treasurer of the Company since its inception. From July 1997 until
the Company's inception, Mr. Eby served as the Chief Financial Officer and
Treasurer of GRI, one of the Founding Companies. From December 1995 until July
1997, Mr. Eby served as the Chief Financial Officer of Gold Coast Media Inc., a
direct marketing company. From April 1987 until May 1995, Mr. Eby served as
Chief Financial Officer and in other financial management positions with
Attwoods Incorporated, a waste management company which was a wholly-owned
subsidiary of Attwoods PLC, a NYSE company, and a company whose securities
traded on the London Stock Exchange. From June 1995 until December 1995, Mr. Eby
served as a consultant to Browning-Ferris Industries, Inc., a NYSE company,
which acquired Attwoods PLC in December 1994. Mr. Eby is a certified public
accountant.

ROBERT BROOKER has served as the Vice President of Technology of the
Company since its inception. From February 1993 until the Company's inception,
Mr. Brooker served as the Vice President of Technology of GRI, one of the
Founding Companies. From 1988 until February 1993, Mr. Brooker served as the
Assistant Supervisor of Administration for the Palm Beach School District in
south Florida, where he developed a computerized maintenance management system.
From 1981 to 1988, Mr. Brooker served as the General Manager of ABA Roofing &
Sheetmetal. Mr. Brooker designed and implemented the Company's enterprise
information system.

ANGELA PETTUS has served as the Vice President of Human Resources
Administration of the Company since its inception. From 1995 until the Company's
inception, Ms. Pettus served as the Vice President of Human Resources
Administration of GRI, one of the Founding Companies. Since 1987, Ms. Pettus has
served in various positions with GRI involving its administrative functions. Ms.
Pettus has management and administrative expertise in resolving roofing
contractors' workers compensation claims and related medical benefits issues.

JOHN C. COOK will become a Director of the Company and continue in his
present position as the President and Chief Executive Officer of C.E.I. Florida,
one of the Founding Companies, upon the consummation of the Offering. Mr. Cook
is a co-founder of Cook Enterprises and has served as the President and Chief
Executive Officer of C.E.I. Florida for more than five years prior to the date
hereof. From 1982 to 1992, Mr. Cook served as a member of the Board of Directors
of First America Bank.

JOEL A. THOMPSON will become a Director of the Company and continue in his
present position as the President and Chief Executive Officer of Anthony
Roofing, one of the Founding Companies, upon the consummation of the Offering.
Mr. Thompson is the founder of Anthony Roofing. Mr. Thompson has over 27 years
of experience in the roofing industry, and has actively participated in several
industry organizations throughout his career, including the NRCA, the Midwest
Roofing Contractors Association and the Chicago Roofing Contractors Association.

THOMAS E. BROWN, JR. will become a Director of the Company and continue in
his present position as the Chairman and Chief Executive Officer of
Wright-Brown, one of the Founding Companies, upon the consummation of the
Offering. Mr. Brown has served as a member of the Board of Directors of the
NRCA. Mr. Brown has also served as Chairman and Trustee, and as a member of the
Board of Directors of the Sheetmetal Industry Promotion Fund. Mr. Brown has also
served as President of the Southeast Michigan Roofing Contractors Association.

J. PATRICK MILLINOR, JR. will become a Director of the Company upon the
consummation of the Offering. Since October 1996, Mr. Millinor has served as the
Chief Executive Officer and a Director of Group Maintenance America Corp., a
company listed on the NYSE. From September 1994 to October 1996, Mr. Millinor
assisted in the formation and management of Agennix Incorporated and Lexicon
Genetics, two

64
<PAGE> 66

biotechnology companies. From March 1993 to September 1994, he served as Chief
Executive Officer of UltrAir, Inc. a start-up passenger airline. From October
1992 to March 1993, he served as Chief Financial Officer of UltrAir, Inc. From
1991 to 1992, he served as Chief Financial Officer of Lifeco Travel Services, a
travel management company. From 1986 to 1991, Mr. Millinor served as Chief
Operating Officer and Senior Vice President, respectively, of Commonwealth
Savings Association and Bank United. From 1979 to 1986, Mr. Millinor was a
partner with KPMG Peat Marwick LLP. He currently serves as a director of Agennix
Incorporated and Haelan Health(R) Corporation.

FRANCIS X. MAGUIRE will become a Director of the Board of the Company upon
the consummation of the Offering. Since 1985, Mr. Maguire has served as the
Chairman and Chief Executive Officer of Hearth Communication Group and is a key
note speaker, trainer and consultant providing services to Fortune 500
companies. From 1974 to 1984, Mr. Maguire served as the Senior Vice President of
Industrial Relations at Federal Express. Mr. Maguire has previously served as
the Senior Vice President of Kentucky Fried Chicken, Director of Marketing and
Public Relations of American Airlines, Director of Program Development at the
American Broadcasting Company and as one of the task force members of the "War
on Poverty" initiative during the Kennedy-Johnson administration.

CHARLES "RED" SCOTT will become a Director of the Company upon the
consummation of the Offering. Mr. Scott has served as the Chairman and Chief
Executive Officer of TEC Florida, Inc., a leadership training organization, for
more than five years prior to the date hereof. From 1991 to December 1994, Mr.
Scott served as the President and Chief Executive Officer of Actava Group, Inc.,
a NYSE company. From 1970 until 1991, Mr. Scott served as the President and
Chief Executive Officer of Intermark, a NYSE company. In 1984, Mr. Scott was the
recipient of the Horatio Alger Award of Distinguished Americans. Mr. Scott
currently serves on the Board of Directors of Pier I Imports, a NYSE company,
Union Bank of California and PSS World Medical, Inc., companies whose securities
are on the Nasdaq Stock Market.

DAVID C. WILLIS will become a Director of the Company upon the consummation
of the Offering. Mr. Willis is a Co-Founder and has served as a Senior
Consultant of FMI Corporation. From 1954 to 1997, Mr. Willis served as a partner
of FMI Corporation. While at FMI Corporation, Mr. Willis developed a "zero
injury" improvement process, which is a worker safety program taught by FMI
Corporation's consultants, and co-developed the total quality management program
for the construction industry which consists of numerous quality procedures,
including inspection procedures, training and supervision of personal and
ongoing quality oversight by management. Prior to joining FMI Corporation, Mr.
Willis was a professor for 17 years at North Carolina State University. He
earned a Bachelor of Science at Tennessee Polytechnic Institute and a Master of
Science at North Carolina State University.

ROBERT G. SHULER will become a Director of the Company upon the
consummation of the Offering. Mr. Shuler is a co-founder of Petra Capital, LLC,
an investment firm, and since 1996, has served as its co-Managing Partner and a
member of its Advisory Board, mostly recently as its President, Chief Executive
Officer and a Director. From 1993 to 1996, Mr. Shuler was a Vice President and a
Principal at Sirrom Capital Corporation, a NYSE company. From 1991 to 1993, Mr.
Shuler served as an investment banker at Equitable Securities Corporation. From
1987 to 1989, Mr. Shuler was a corporate finance professional at The Robinson-
Humphrey Company, LLC.

Effective upon the consummation of the Offering, the Board of Directors of
the Company will consist of nine members divided into three classes of three
directors per class, serving staggered three-year terms expiring at the annual
meeting of shareholders in 1999, 2000, and 2001, respectively. At each annual
meeting of shareholders, one class of directors will be elected for a full term
of three years to succeed the class of directors whose terms are expiring.

65
<PAGE> 67

COMMITTEES OF THE BOARD OF DIRECTORS

The Board of Directors has established six committees -- the Executive
Committee, Nominating Committee, Audit Committee, Compensation Committee,
Finance Committee and Acquisition Committee. Pursuant to resolutions of the
Board of Directors, these committees have the responsibilities and authority
described below.

Executive Committee. The Executive Committee is authorized, subject to
Florida law, to exercise the power and authority of the Board of Directors in
the management of the business and affairs of the Company between meetings of
the full Board of Directors. The members of the Executive Committee are Messrs.
Wallick and Cook.

Nominating Committee. The Nominating Committee has the responsibility to
propose nominees to the Board of Directors. The members of the Nominating
Committee are Messrs. Maguire, Shuler, Scott and Willis.

Audit Committee. The Audit Committee has the responsibility of (i)
recommending the selection of the Company's independent public accountants, (ii)
reviewing and approving the scope of the independent public accountants' audit
activity and extent of non-audit services, (iii) reviewing with management and
the Company's independent public accountants the adequacy of the Company's
accounting system and the effectiveness of the Company's internal audit plan and
activities, (iv) reviewing with management and the Company's independent public
accountants the Company's financial statements and exercising general oversight
of the Company's financial reporting process and (v) reviewing with the Company
litigation and other legal matters that may affect the Company's financial
condition, and monitoring compliance with the Company's business ethics and
other policies. The members of the Audit Committee are Messrs. Maguire,
Millinor, Shuler, Scott and Willis.

Compensation Committee. The Compensation Committee has the responsibility
of (i) establishing the salary rates of officers and employees of the Company
and its subsidiaries, (ii) approving the issuance of stock options under the
Company's 1998 Stock Option and Restricted Stock Purchase Plan, as well as any
issuance of securities to management and its affiliates other than pursuant to
such stock option plan, (iii) examining periodically the compensation structure
of the Company and (iv) supervising the welfare and pension plans and
compensation plans of the Company. Any options or other securities to be issued
to members of the Compensation Committee or their respective affiliates must be
approved by a majority of the members of the Company's Board of Directors who do
not have an interest in such transaction. The members of the Compensation
Committee are Messrs. Maguire, Shuler, Scott and Willis.

Finance Committee. The Finance Committee has the responsibility of (i)
monitoring the financial performance of the Company and (ii) reviewing and
making recommendations to the Board of Directors for the Company's annual budget
and financial policies. The members of the Finance Committee are Messrs.
Wallick, Thompson, Brown, and Cook.

Acquisition Committee. The Acquisition Committee has the responsibility of
establishing the profile of the types of companies, geographic area and
valuation formula for the roofing companies to be acquired by the Company. The
members of the Acquisition Committee are Messrs. Cook, Thompson, and Brown.

DIRECTOR COMPENSATION

The Company intends to grant to each director of the Company who is not an
employee of the Company or its subsidiaries options to purchase 15,000 shares of
Common Stock at a purchase price per share equal to the fair market value of the
Common Stock on the date of grant. Such options will remain in effect for ten
years after the date of grant and will become exercisable in equal amounts over
a three year period. If a director ceases to serve in such capacity because of
his death, disability or retirement, the options granted to that director will
remain exercisable for the ten year period. Each outside director also will be
paid $1,500 and reimbursed for travel expenses incurred for each Board meeting
attended. Members of Committees of the Board of Directors of the Company will be
compensated $1,000 for each Committee meeting attended.

66
<PAGE> 68

EXECUTIVE COMPENSATION

The Company was incorporated in May 1998 and, prior to the Offering, has
not conducted any operations other than activities related to the Combination
and the Offering. During 1998, the annualized base salaries of its most highly
compensated executive officers will be: Gregg E. Wallick -- $200,000; Dale E.
Eby -- $120,000; Eric B. Levine -- $120,000; and William A. Abberger III --
$120,000 (collectively, the "Named Executive Officers").

EMPLOYMENT AGREEMENTS

The Company has entered into employment agreements with uniform terms for
each of the Named Executive Officers. Each of the agreements has an initial term
of three years, and is terminable after the first year of the term by either
party without cause upon 180 days' prior written notice. The employment
agreements provide for annual compensation payable to the Named Executive
Officers as follows: Gregg E. Wallick -- $200,000; Dale E. Eby -- $120,000; Eric
B. Levine -- $120,000; and William A. Abberger III -- $120,000. The Named
Executive Officers are also eligible for bonus compensation and are entitled to
participate in the Company's 1998 Stock Option and Restricted Stock Purchase
Plan. The agreements also generally restrict certain of the Company's executive
officers and members of management from competing with the Company for a period
of two years after the date of termination of employment with the Company, and
prohibit such officers and members of management from disclosing the Company's
confidential information and soliciting employees and former employees of the
Company for employment in another company for a period of one year.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The Compensation Committee's function is to recommend to the Board of
Directors compensation decisions for the Company's executive officers and to
administer the Company's 1998 Stock Option and Restricted Stock Purchase Plan.
See "Management -- Committees of The Board of Directors."

1998 STOCK OPTION AND RESTRICTED STOCK PURCHASE PLAN

The Company has adopted the 1998 Stock Option and Restricted Stock Purchase
Plan (the "Plan"). An aggregate of 1,500,000 shares of Common Stock are
authorized for issuance under the Plan. After giving effect to the Combination
(pursuant to which options to purchase shares of capital stock of GRI will be
converted into options to purchase 216,300 shares of Common Stock), the Company
will grant options to purchase approximately 560,000 shares of Common Stock to
employees and directors of the Company immediately following the Offering. The
purpose of the Plan is to attract and retain qualified personnel, to provide
additional incentives to employees, officers and directors of the Company and to
promote the success of the Company's business. In furtherance of this purpose,
the Plan authorizes (i) the granting of incentive and non-statutory stock
options to purchase shares of Common Stock to employees, officers and directors
of the Company, and (ii) the granting of rights to purchase shares of Common
Stock on a "restricted stock" basis (the "Awards") to employees, officers and
directors of the Company. Incentive stock options may only be granted to
full-time employees of the Company or its subsidiaries. Non-statutory stock
options and Awards may be granted to directors of the Company and any person
employed by the Company or its subsidiaries. The Plan is administered by the
Compensation Committee of the Board. The Compensation Committee has complete
discretion to determine which eligible individuals are to receive option or
Award grants, the number of shares subject to each such grant, the status of any
granted option as either an incentive stock option or a non-statutory option,
the vesting schedule to be in effect for the option or Award grant and the
maximum term for which any granted option or Award is to remain outstanding.

Each option granted under the Plan has a maximum term of ten years (five
years with respect to incentive stock options granted to holders of more than
10% of the voting power of the Company's outstanding stock), subject to earlier
termination following the optionee's cessation of service with the Company.
Options granted under the Plan may be exercised only for fully vested shares.
The exercise price of incentive stock options and non-statutory stock options
granted under the Plan must be at least 100% and 85% of the fair

67
<PAGE> 69

market value of the stock subject to the option on the date of grant,
respectively (or 110% with respect to incentive stock options granted to holders
of more than 10% of the voting power of the Company's outstanding stock). The
purchase price is payable immediately upon the exercise of the option. Such
payment may be made in cash, in outstanding shares of Common Stock held by the
participant, through a promissory note payable in installments over a period of
years or any combination of the foregoing.

The Board may amend or modify the Plan at any time, provided that no such
amendment or modification may adversely affect the rights and obligations of the
participants with respect to their outstanding options, Awards or vested shares
without their consent. In addition, no amendment of the Plan may, without the
approval of the Company's shareholders: (i) modify the class of individuals
eligible for participation; (ii) increase the number of shares available for
issuance, except in the event of certain changes to the Company's capital
structure; or (iii) extend the term of the Plan.

Options granted under the Plan have been structured to provide incentive to
achieve the Company's financial goals and enhance shareholder value. In general,
options granted under the Plan vest ratably over a four year period commencing
one year from the date of grant.

CERTAIN TRANSACTIONS

Individuals who are or will become executive officers or directors of the
Company will receive the following portions of the Acquisition Consideration in
the Combination for their interests in the Founding Companies.

<TABLE>
<CAPTION>
SHARES OF
COMPANY CASH COMMON STOCK
- ------- ---------- ------------
<S> <C> <C>
Gregg E. Wallick(1)......................................... $ -- 2,067,596
John C. Cook(2)............................................. 2,725,978 237,981
Joel A. Thompson(3)......................................... 7,514,439 1,022,357
Thomas E. Brown, Jr.(4)..................................... 3,634,064 317,259
</TABLE>

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

(1) Mr. Wallick is the sole stockholder of GRI. See "The Combination."
(2) Mr. Cook is a stockholder of each of the C.E.I. Companies. See "The
Combination."
(3) Mr. Thompson and his wife are the sole stockholders of Anthony Roofing. See
"The Combination."
(4) Mr. Brown is the principal stockholder of Wright-Brown. See "The
Combination."

The Company leases its headquarters offices and operating facilities in
Pompano Beach, Tampa and Orlando, Florida from entities controlled by Gregg E.
Wallick or members of Mr. Wallick's family. None of these leases expire prior to
2008. The aggregate annual base rent to be paid under these leases is
approximately $260,000 with annual increases based on the consumer price index.
The Company believes that the terms of such leases are no less favorable to the
Company than could have been negotiated by the Company with unaffiliated third
parties.

General Roofing Industries has from time to time made loans (the "GRI
Loans") to Gregg E. Wallick. As of March 31, 1998, the aggregate amount of the
GRI Loans was $332,286. The GRI Loans are non-interest bearing and are due and
payable upon demand by GRI. Mr. Wallick intends to repay the GRI Loans upon
consummation of the Offering.

Anthony Roofing leases certain office facilities from Molitor, Inc., a
company which is wholly owned by Joel A. Thompson. Lease payments made by
Anthony Roofing to Molitor, Inc. were $195,677 and $135,741 for the years ended
December 31, 1997 and 1996, respectively. The term of the lease expires in 2001
and is subject to a five year renewal option. The minimum annual payments for
the years ended 1998, 1999, 2000 and 2001 are $163,800, $172,000, $180,600 and
$189,700, respectively. The Company believes that the terms of such lease are no
less favorable to the Company than could have been negotiated by the Company
with unaffiliated third parties.

68
<PAGE> 70

From time to time, Anthony Roofing hires as a subcontractor Uni-Craft,
Inc., a company specializing in interior protection work which is owned by Joel
A. Thompson's brother. Payments to this company for work performed were
approximately $164,000 and $202,000 for the years ended December 31, 1997 and
1996, respectively. Payments to this company through June 30, 1998 were
approximately $41,000. There are no existing contracts or commitments for
additional payments at the present time.

C.E.I. Roofing leases certain office space in Michigan and Texas from
Wheelock & Associates, a partnership owned by Doug Reader, George Cook and John
C. Cook. Lease payments made by C.E.I. Roofing to Wheelock & Associates were
$164,199 and $148,599 for the years ended December 31, 1997 and 1996. The term
of the leases expire in 2000. The minimum annual payments for the years ending
1998, 1999 and 2000 are $120,000, $120,000 and $60,000, respectively. The
Company believes that the terms of such leases are no less favorable to the
Company than could have been negotiated by the Company with unaffiliated third
parties. C.E.I. Roofing also has granted a corporate guarantee to secure
$500,000 of indebtedness of Wheelock & Associates. The loans comprising this
guaranteed indebtedness are due in monthly installments of approximately $8,200,
but vary based upon the prime rate. The loans are collateralized by real estate
and are due at maturity in September 1998 and July 2002. The largest aggregate
balance of the indebtedness during 1997 was $525,396.

C.E.I. Roofing hires certain employees and laborers from CJRFG, Inc. and
Chris Jon Roofing, Inc., Texas corporations owned by certain children of Doug
Reader. The aggregate amounts paid by C.E.I. Roofing to these companies were
$4.4 and $3.7 million for the years ended December 31, 1997 and 1996,
respectively. Payments to these companies through June 30, 1998 totalled
$2,052,192, and an additional $2,025,000 is expected to be incurred during the
remainder of 1998. CJRFG, Inc. and Chris Jon Roofing, Inc. lease the employees
and laborers at cost with no markup. As such, C.E.I. Roofing believes these
leasing arrangements are no less favorable than could have been negotiated by
C.E.I. Roofing with unaffiliated third parties.

GRI paid the Chief Executive Officers Organization, a consulting company
wholly owned by Eric B. Levine, $126,716 and $75,633 during the fiscal years
ended October 31, 1997 and 1996, respectively, for certain consulting services.
Since October 31, 1997 payments totaling $78,461 have been made to this company
and another $13,842 are expected to be made through the date of the Offering.

In January 1998, Petra Capital, LLC ("Petra") loaned an aggregate of
$3,000,000 to General Roofing Industries, Inc. (n/k/a General Roofing
Acquisition Corp.), GRI of South Florida, Inc., GRI of Orlando, Inc., GRI of
West Florida, Inc. and Dakota Leasing Inc., each of which are Founding Companies
and wholly-owned by Gregg E. Wallick. The entire amount of this loan (the "Petra
Loan") is currently outstanding. Indebtedness under the Petra Loan bears
interest at an annual rate of 13% and is due in January 2003. In consideration
of the Petra Loan, Petra received warrants to purchase common stock of General
Roofing Industries. Upon completion of the Combination, such warrants will
represent the right to purchase 65,922 shares of Common Stock of the Company at
a nominal exercise price. Robert G. Shuler, who will become a director of the
Company upon the consummation of the Offering, is a co-founder of Petra and is
Petra's co-managing partner. The Petra Loan will be repaid upon the closing of
the Offering.

Following consummation of the Offering, the Company will not enter into any
material transaction with officers or directors, or their family members,
without the approval of a majority of the directors who do not have an interest
in such transaction.

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<PAGE> 71

SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth, as of the date of this Prospectus, certain
information known by the Company with respect to the ownership of shares of
Common Stock as to (i) all persons who are expected to be the beneficial owners
of 5% or more of the outstanding shares of Common Stock upon consummation of the
Offering, (ii) each director and each person who has consented to be named as a
director, (iii) each Named Executive Officer, and (iv) all executive officers
and directors of the Company as a group. Unless otherwise indicated, each of the
following persons may be deemed to have sole voting and dispositive power with
respect to such shares. Information set forth in the table with respect to
beneficial ownership of the Common Stock has been provided to the Company by
such holders. Each person's address is c/o the Company's principal executive
offices at 951 South Andrews Avenue, Pompano Beach, Florida 33069.

<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF PERCENT OF
BENEFICIAL OUTSTANDING
OWNERSHIP OF COMMON STOCK
NAME AND ADDRESS OF BENEFICIAL OWNER COMMON STOCK(1) AFTER OFFERING(2)
- ------------------------------------ --------------- -----------------
<S> <C> <C>
Gregg E. Wallick............................................ 2,067,596 20.15%
Joel A. Thompson(3)......................................... 1,022,357 9.97
Thomas E. Brown, Jr.(4)..................................... 317,259 3.09
R. Wayne Cooke.............................................. 603,013 5.88
John C. Cook................................................ 237,981 2.32
Francis X. Maguire.......................................... 0 *
Robert G. Shuler............................................ 0 *
David C. Willis............................................. 0 *
Charles "Red" Scott......................................... 0 *
J. Patrick Millinor, Jr..................................... 0 *
Dale E. Eby................................................. 0 *
Eric B. Levine.............................................. 0 *
William A. Abberger III..................................... 0 *
--------- -----
All executive officers and directors of the Company as a
group (12 persons)........................................ 3,645,193 35.5%
========= =====
</TABLE>

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

* Less than 1%.
(1) The shares of Common Stock will be issued to such persons upon consummation
of the Offering.
(2) The above amounts do not include options to purchase shares of Common Stock
held by such individuals which are not exercisable within 60 days of the
date of this Prospectus.
(3) Includes 511,187 shares of Common Stock owned by Joel A. Thompson's wife.
(4) Such shares of Common Stock are held by the Thomas E. Brown, Jr. Revocable
Trust U/T/A September 16, 1980 for the benefit of such shareholder.

70
<PAGE> 72

THE COMBINATION

In May 1998, the Company entered into separate agreements to acquire the
Founding Companies in exchange for cash, Common Stock or a combination thereof.
The Combination will be effective concurrently with the consummation of the
Offering, and the stockholders of the Founding Companies will receive an
aggregate of 6,258,667 shares of Common Stock and an aggregate of approximately
$25.7 million in cash from the net proceeds of the Offering. The Company's
existing shareholder (the "Existing Shareholder") will receive the difference
between (i) the 6,258,667 shares of Common Stock to be outstanding after the
Combination, exclusive of the shares sold in the Offering, and (ii) the total
number of shares issued to the shareholders of the Founding Companies other than
the Existing Shareholder, in consideration for his ownership interest in GRI,
the accounting acquirer. The specific number of shares of Common Stock to be
issued in the Combination to the stockholders of the Founding Companies other
than the Existing Shareholder (the "Stock Consideration") will be determined by
dividing approximately $58.7 million by the initial public offering price of the
Common Stock. The table below illustrates the aggregate number of shares of
Common Stock and the percentage of the total number of shares of Common Stock
after the Offering that will be (i) issued to new investors in the Offering,
(ii) issued to the Existing Shareholder in the Combination, and (iii) issued to
the shareholders of the Founding Companies (other than the Existing Shareholder)
in the Combination if the initial public offering price of the Common Stock is,
alternatively, $13.00, $14.00 or $15.00.

<TABLE>
<CAPTION>
NUMBER OF SHARES OF COMMON STOCK IF
PRICE TO PUBLIC IS:
------------------------------------------------------------
$13.00 $14.00 $15.00
------------------ ------------------ ------------------
SHARES % SHARES % SHARES %
---------- ----- ---------- ----- ---------- -----
<S> <C> <C> <C> <C> <C> <C>
New investors........................ 4,000,000 39.0 4,000,000 39.0 4,000,000 39.0
Existing Shareholder................. 1,745,206 17.0 2,067,596 20.2 2,347,001 22.9
Other Founding Companies............. 4,513,461 44.0 4,191,071 40.8 3,911,666 38.1
---------- ----- ---------- ----- ---------- -----
Total(1)................... 10,258,667 100.0% 10,258,667 100.0% 10,258,667 100.0%
========== ===== ========== ===== ========== =====
</TABLE>

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

(1) Excludes 1,500,000 shares of Common Stock reserved for issuance under the
Company's 1998 Stock Option and Restricted Stock Purchase Plan of which
options to purchase approximately 560,000 shares of Common Stock will be
granted to directors and employees of the Company immediately following the
Offering. In addition, options and warrants to purchase 282,222 shares of
Common Stock are expected to be issued upon the conversion of outstanding
options and warrants of GRI shares in the Combination. The options and
warrants will be converted based upon the conversion ratio of GRI for shares
of the Company's Common Stock, and will contain an equivalent exercise price
adjusted to reflect such ratio. See "Management -- 1998 Stock Option and
Restricted Stock Purchase Plan."

The consideration for the Combination was negotiated by the parties and was
based primarily upon the historical earnings before interest and taxes of each
Founding Company. In addition, the Company intends to repay approximately $9.7
million of existing indebtedness of the Founding Companies with proceeds from
the Offering.

The consummation of each acquisition is subject to customary conditions.
These conditions include, among others, the accuracy of the representations and
warranties by the Founding Companies, their stockholders and the Company; the
performance by each of the parties of their respective covenants; and the
nonexistence of a material adverse change in the financial condition or business
of each Founding Company. There can be no assurance that the conditions to the
closing of each acquisition will be satisfied or waived or that the acquisition
agreements will not be terminated.

71
<PAGE> 73

The following table sets forth for each Founding Company (i) the
approximate portion of the Acquisition Consideration to be paid to the
stockholders of each of the Founding Companies in cash and in shares of Common
Stock (based upon an assumed initial public offering price of $14.00 per share),
which number of shares is subject to adjustment based on the initial public
offering price of the Common Stock offered hereby and (ii) the total debt which
would have been assumed by the Company as of March 31, 1998, which represents
historical indebtedness, excluding indebtedness transferred to owners of the
Founding Companies. The Combination excludes certain assets and operations of
the Founding Companies with a net book value of $1.1 million not required for
the ongoing operations of the Company. The Company offered purchase price
alternatives to the stockholders of several of the Founding Companies based upon
the relative proportion of cash and Common Stock to be received by them in the
Combination. The Company agreed to pay stockholders of the Founding Companies
who elected to receive a higher proportion of the purchase price in shares of
Common Stock up to 20% more than the purchase price they would have received if
they had elected to receive a lower proportion of the purchase price in shares
of Common Stock.

<TABLE>
<CAPTION>
CASH AND SHARES OF
S CORPORATION COMMON ASSUMED
FOUNDING COMPANIES DISTRIBUTIONS(1) STOCK INDEBTEDNESS
- ------------------ ---------------- --------- --------------
(IN THOUSANDS) (IN THOUSANDS)
<S> <C> <C> <C>
General Roofing Industries(2)........................... $ 732 2,067,596 $ 4,651
The C.E.I. Companies:
C.E.I. Roofing, Inc. ................................. 3,190 278,500 305
C.E.I. West Roofing Company, Inc. .................... 3,460 302,000 512
C.E.I. Florida, Inc. ................................. 4,085 356,643 331
Blackmore and Buckner Roofing, Inc.(3)(8)............... 1,481 129,286 100
Cyclone Roofing Company................................. 3,800 603,000 323
Anthony Roofing, Ltd.................................... 7,514 1,022,357 --
Slavik, Butcher & Baecker Construction Company,
Inc.(4)(8)............................................ 900 192,857 170
Advanced Roofing, Inc. and Affiliates................... 3,596 268,143 660
Five-K Industries, Inc. and Subsidiary.................. 4,747 414,357 87
Wright-Brown Roofing Company............................ 3,825 334,000 168
Register Contracting Company, Inc.(5)(8)................ 3,210 -- 177
Harrington-Scanlon Roofing Company, Inc. and
Affiliates(6)(8)...................................... 360 31,428 1,393
Specialty Associates, Inc. and Affiliate(7)(8).......... 1,206 258,500 1,471
------- --------- -------
Total(9)...................................... $42,106 6,258,667 $10,348
======= ========= =======
</TABLE>

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

(1) In lieu of the cash consideration, certain Founding Companies may distribute
cash or certain assets (principally cash surrender value of life insurance)
to their stockholders prior to the Combination. The Combination excludes
certain assets and operations of the Founding Companies. Slavik Butcher has
a general contracting business that will be retained by Slavik Butcher's
stockholders prior to the Combination and Advanced Roofing has a business
that leases equipment to third parties and an airplane that will be retained
by the stockholders of Advanced Roofing prior to the Combination.
(2) Consists of (i) GRI of South Florida, Inc., (ii) GRI of West Florida, Inc.,
(iii) GRI of Orlando, Inc. and (iv) Dakota Leasing, Inc.
(3) An additional payment of up to $192,000 may be made to the stockholders of
Blackmore & Buckner based on a multiple of six of (i) the excess of its
earnings before interest and taxes ("EBIT") in the year following the
Combination over (ii) $435,586. Such payment will be made, at the election
of the stockholders of Blackmore & Buckner, in cash or shares of Common
Stock valued at the average market price for the last five business days of
the earn-out period.
(4) An additional payment of up to $161,000 may be made to the stockholders of
Slavik Butcher based on a multiple of seven of (i) the excess of its EBIT in
the year following the Combination over (ii) $497,000. The consideration is
payable in cash or shares of Common Stock valued at the average market price
for the last five business days of the earn-out period. Slavik Butcher has
also warranted that its earnings for the year ended June 30, 1998 will be at
least a specified amount.
(5) An additional payment of up to $1,019,340 may be made to the stockholders of
Register Roofing based on a multiple of seven of (i) the excess of its
average annual EBIT in the two years following the Combination over (ii)
$458,571. Such payment will be made, at the election of the stockholders of
Register Roofing, in cash or shares of Common Stock valued at the average
market price for the last five business days of the earn-out period.

72
<PAGE> 74

(6) An additional payment of up to $5,820,000 may be made to the stockholders of
Harrington-Scanlon based on (i) its EBIT in each of two years following the
Combination multiplied by (ii) two. Such payment will be made, at the
election of the stockholders of Harrington-Scanlon, in cash or shares of
Common Stock valued at the average market price for the last five business
days of the earn-out period.
(7) An additional cash payment of up to $420,000 may be made to the stockholders
of Specialty Associates based on a multiple of seven of (i) the excess of
its EBIT in the year following the Combination over (ii) $600,000.
(8) All earn-out payments are required to be made within 60 days following the
end of the applicable EBIT measurement period.
(9) The following table reconciles cash consideration and distributions and
assumed indebtedness per the Founding Companies' stock purchase agreements
to the corresponding amounts shown in the Unaudited Pro Forma Combined
Financial Statements. The Unaudited Pro Forma Combined Financial Statement
adjustments assume that the S Corporation Distributions were made prior to
the date of the Combination and exclude amounts related to GRI, the
accounting acquirer.

<TABLE>
<CAPTION>
ASSUMED
CASH INDEBTEDNESS
-------- ------------
<S> <C> <C>
Per Stock Purchase Agreements............................... $ 42,106 $ 10,348
Adjustments in Pro Forma Financial Statements:
S Corporation Distributions............................... (15,310) 12,096
Net Assets Withdrawn...................................... (1,110) --
-------- --------
25,686 22,444
Less GRI Debt Assumed -- Existing......................... -- (4,651)
Less GRI Debt Assumed -- S Distributions.................. -- (400)
-------- --------
Per Pro Forma Financial Statements.......................... $ 25,686 $ 17,393
======== ========
</TABLE>

73
<PAGE> 75

DESCRIPTION OF CAPITAL STOCK

GENERAL

The authorized capital stock of the Company consists of 90,000,000 shares
of Common Stock, $0.01 par value, and 10,000,000 shares of Preferred Stock, $.01
par value. Upon completion of the Offering and the Combination there will be
10,258,667 shares of Common Stock outstanding. No shares of Preferred Stock have
been issued or are currently outstanding.

The following description of the capital stock of the Company and certain
provisions of the Company's Articles and Bylaws is a summary and is qualified in
its entirety by the provisions of the Articles and Bylaws which have been filed
as exhibits to the Company's Registration Statement, of which this Prospectus is
a part.

COMMON STOCK

All shares of Common Stock have one vote on all matters to be voted upon by
the shareholders. Subject to preferences that may be applicable to any
outstanding Preferred Stock, the holders of Common Stock are entitled to receive
ratably such dividends, if any, as may be declared from time to time by the
Board out of funds legally available therefor. Holders of Common Stock have no
preemptive, conversion or other registration or subscription rights. There are
no redemption or sinking fund provisions available to the Common Stock. In the
event of liquidation, dissolution or winding up of the Company, the holders of
Common Stock are entitled to share ratably in all assets remaining after payment
of liabilities, subject to the prior distribution rights of Preferred Stock, if
any, then outstanding.

PREFERRED STOCK

The Board has the authority without further action by the shareholders to
issue up to 10,000,000 shares of Preferred Stock in one or more series and to
fix the number of shares constituting any such series, the voting powers,
designations, preferences and relative participation, optional or other special
rights and qualifications, limitations or restrictions thereof, including the
dividend rights and dividend rate, terms of redemption (including sinking fund
provisions), redemption price or prices, conversion rights and liquidation
preferences of the shares constituting any series, without further vote or
action by the shareholders. The issuance of Preferred Stock by the Board could
adversely effect the rights of the holders of Common Stock. For example, such
issuance could result in a class of securities outstanding that would have
preferences with respect to voting rights and dividends, and in liquidation,
over the Common Stock, and could (upon conversion) enjoy all of the rights of
the Common Stock.

The authority possessed by the Board to issue Preferred Stock could
potentially be used to discourage attempts by others to obtain control of the
Company through merger, tender offer, proxy contest or otherwise by making such
attempts more difficult to achieve or more costly. The Board may issue Preferred
Stock with voting or conversion rights that could adversely affect the voting
power of the holders of Common Stock. There are no agreements or understandings
for the issuance of Preferred Stock and the Board has no present intention to
issue Preferred Stock.

ANTI-TAKEOVER EFFECTS OF CERTAIN PROVISIONS OF FLORIDA LAW

The Company is subject to (i) the Florida Control Share Act, which
generally provides that shares acquired in excess of thresholds equaling 20%,
33% and 55% of a corporation's voting power will not possess any voting rights
unless such voting rights are approved by a majority vote of the Company's
disinterested shareholders and (ii) the Florida Fair Price Act which generally
requires approval by the disinterested directors or supermajority approval by
shareholders for certain specified transactions between a corporation and a
holder of more than 10% of the outstanding shares of the corporation (or their
affiliates). These provisions could prohibit or delay the accomplishment of
mergers or other takeover or change in control attempts with respect to the
Company and, accordingly, may discourage attempts to acquire the Company.

74
<PAGE> 76

CERTAIN PROVISIONS OF THE COMPANY'S ARTICLES AND BYLAWS

Certain provisions of the Articles and Bylaws summarized in the following
paragraphs, may be deemed to have an anti-takeover effect and may delay, defer
or prevent a tender offer or takeover attempt that a shareholder might consider
in its best interest, including those attempts that might result in a premium
over the market price for the shares held by shareholders.

Advance Notice Requirements for Shareholder Proposals and Director
Nominations. The Bylaws provide that shareholders seeking to bring business
before an annual meeting of shareholders, or to nominate candidates for election
as directors at an annual meeting of shareholders, must provide timely notice
thereof in writing. To be timely, a shareholder's notice must be delivered to or
mailed and received at the principal executive offices of the Company, not less
than 120 days nor more than 150 days prior to the first anniversary of the date
of the Company's notice of annual meeting provided with respect to the previous
year's annual meeting; provided, that if no annual meeting was held in the
previous year or the date of the annual meeting has been changed to be more than
30 calendar days earlier than or 60 calendar days after such anniversary, notice
by the shareholder, to be timely, must be so received not more than 90 days nor
later than the later of (i) 60 days prior to the annual meeting or (ii) the
close of business on the 10th day following the date on which notice of the date
of the meeting is given to shareholders or made public, whichever first occurs.
The Bylaws also specify certain requirements for a shareholder's notice to be in
proper written form. These provisions may preclude shareholders from bringing
matters before the shareholders at an annual meeting or from making nominations
for directors at an annual meeting.

Authorized but Unissued Shares. The authorized but unissued shares of
Common Stock and Preferred Stock are available for future issuance without
shareholder approval. These additional shares may be utilized for a variety of
corporate purposes, including future public offerings to raise additional
capital, corporate combinations and employee benefit plans. The existence of
authorized but unissued and unreserved Common Stock and Preferred Stock may
enable the Board to issue shares to persons friendly to current management which
could render more difficult or discourage an attempt to obtain control of the
Company by means of a proxy contest, tender offer, merger or otherwise, and
thereby protect the continuity of the Company's management.

Classification of the Board of Directors. The Articles classify the Board
of Directors into three classes of directors serving staggered three-year terms.
Under a three-class structure, at least two annual shareholder meetings, instead
of one, would generally be required for a shareholder of the Company holding a
substantial amount of Common Stock to obtain control of the Board of Directors
by electing a majority of such shareholder's representatives to the Board of
Directors. As a result, it will be more time-consuming for such a shareholder to
obtain majority control of the Board of Directors without the consent of the
Board of Directors. The Company believes that a three-class structure will serve
to encourage any person or entity intending to effect a takeover of the Company,
restructuring or sale of all or part of the Company or any other extraordinary
transaction to negotiate with, and to seek to obtain the approval of, the
existing Board of Directors.

LIMITED LIABILITY AND INDEMNIFICATION

Under the Florida Business Corporation Act ("FBCA"), a director is not
personally liable for monetary damages to the corporation or any other person
for any statement, vote, decision, or failure to act unless (i) the director
breached or failed to perform his duties as a director and (ii) a director's
breach of, or failure to perform, those duties constitutes (1) a violation of
the criminal law, unless the director had reasonable cause to believe his
conduct was lawful or had no reasonable cause to believe his conduct was
unlawful, (2) a transaction from which the director derived an improper personal
benefit, either directly or indirectly, (3) a circumstance under which an
unlawful distribution is made, (4) in a proceeding by or in the right of the
corporation to procure a judgment in its favor or by or in the right of a
shareholder, conscious disregard for the best interest of the corporation or
willful misconduct, or (5) in a proceeding by or in the right of someone other
than the corporation or a shareholder, recklessness or an act or omission which
was committed in bad faith or with malicious purpose or in a manner exhibiting
wanton and willful disregard of human rights, safety,

75
<PAGE> 77

or property. A corporation may purchase and maintain insurance on behalf of any
director or officer against any liability asserted against him and incurred by
him in his capacity or arising out of his status as such, whether or not the
corporation would have the power to indemnify him against such liability under
the FBCA.

The Articles and Bylaws of the Company provide that the Company shall, to
the fullest extent permitted by applicable law, as amended from time to time,
indemnify all directors of the Company, as well as any officers or employees of
the Company to whom the Company has agreed to grant indemnification.

Prior to this Offering, the Company will enter into separate
indemnification agreements with its directors and certain of its officers
containing provisions which are in some respects broader than the specific
indemnification provisions contained in the Company's Bylaws. The
indemnification agreements may require the Company, among other things, to
indemnify such directors and officers against certain liabilities, including
liabilities under the federal securities laws, that may arise by reason of their
status as directors and officers (other than liabilities arising from willful
misconduct of a culpable nature), to advance their expenses incurred as a result
of any proceeding against them as to which they could be indemnified, and to
provide directors' and officers' insurance, if available on reasonable terms.
The Company believes these agreements are necessary to attract and retain
qualified persons as executive officers and directors.

TRANSFER AGENT AND REGISTRAR

The transfer agent and registrar for the Common Stock is American Stock
Transfer & Trust Company.

SHARES ELIGIBLE FOR FUTURE SALE

Upon completion of the Offering, the Company will have outstanding
10,258,667 shares of Common Stock (10,858,667 shares if the Underwriters'
over-allotment option is exercised in full). Of these shares, the 4,000,000
shares (4,600,000 shares if the Underwriters' over-allotment option is exercised
in full) sold in the Offering will be freely tradable in the public market
without restriction or limitation under the Securities Act, except for any
shares held by an "affiliate" (as defined in the Securities Act) of the Company.
The remaining 6,258,667 shares issued in connection with the acquisition of the
Founding Companies will be "restricted securities" within the meaning of Rule
144.

In addition, certain of the Company's directors, executive officers and
principal shareholders, who hold an aggregate of 6,258,667 shares of Common
Stock, have entered into lock-up agreements with the Representatives of the
Underwriters. These persons have agreed not to offer, sell, contract to sell,
grant any option with respect to, pledge, hypothecate or otherwise dispose of,
any shares of Common Stock owned by them until the date occurring 180 days after
the date of this Prospectus without the prior written consent of The Robinson-
Humphrey Company, LLC. Based upon the relevant circumstances of the individual
request, The Robinson-Humphrey Company, LLC may, in its sole and absolute
discretion, grant exceptions to these lock-up agreements. All such 6,258,667
shares will become available for sale 180 days after the date of this Prospectus
upon expiration of these lock-up agreements, subject to compliance with Rule 144
promulgated under the Securities Act. Furthermore, the shareholders of the
Founding Companies, who collectively will hold 6,258,667 shares of Common Stock,
have entered or will enter into Stock Transfer Restriction Agreements that
impose restrictions of the transferability of their shares. See "-- Transfer
Restrictions."

In general, under Rule 144, as currently in effect, a person (or persons
whose shares are required to be aggregated) who has beneficially owned, for at
least one year, shares of Common Stock that have not been registered under the
Securities Act or that were acquired from an "affiliate" of the Company is
entitled to sell within any three-month period the number of shares of Common
Stock that does not exceed the greater of (i) one percent of the number of the
then outstanding shares or (ii) the average weekly reported trading volume of
the Common Stock during the four calendar weeks preceding the sale. Sales under
Rule 144 are also subject to certain notice requirements and to the availability
of current public information about the Company and must be made in unsolicited
brokers' transactions or to a market maker. A person (or persons whose shares
are aggregated) who is not an "affiliate" of the Company under the Securities
Act during the three months preceding a sale and who has beneficially owned such
shares for at least two years is entitled to

76
<PAGE> 78

sell such shares under Rule 144(k) without regard to the information, volume,
manner of sale and notice provisions of such Rule. At the date of this
Prospectus, 6,258,667 "restricted" shares of Common Stock will be eligible for
resale within one year of the date of this Prospectus pursuant to Rule 144,
subject to the volume, manner of sale and other limitations thereof.

Prior to this Offering, there has been no active trading market for the
Common Stock. No predictions can be made of the effect, if any, that market
sales of shares of Common Stock or the availability of such shares for sale will
have on the market price prevailing from time to time. Nevertheless, sales of
significant amounts of Common Stock could adversely affect the prevailing market
price of Common Stock, as well as impair the ability of the Company to raise
capital through the issuance of additional equity securities.

TRANSFER RESTRICTIONS

All of the stockholders of the Founding Companies to receive shares of
Common Stock in the Combination have agreed that they will not offer, sell,
contract to sell, announce their intention to sell, pledge or otherwise dispose
of such Common Stock, directly or indirectly, without the prior written consent
of the Company and the Underwriters for a period of two years after the date of
this Prospectus.

In the event that after the Offering the Company files a registration
statement under the Securities Act with respect to a subsequent public offering
of its Common Stock, and any shareholders of the Company participate in such
offering, the Company has agreed to register under the Securities Act a portion
of the shares of Common Stock received by the stockholders of the Founding
Companies in the Combination in connection with, and as part of, the
Combination.

77
<PAGE> 79

UNDERWRITING

Subject to the terms and conditions set forth in the Underwriting Agreement
(the "Underwriting Agreement") among the Company and the underwriters named
below (the "Underwriters"), the Company has agreed to sell to each of the
Underwriters, and each of the Underwriters, for whom The Robinson-Humphrey
Company, LLC, BancAmerica Robertson Stephens and Raymond James & Associates,
Inc. are acting as representatives (the "Representatives"), has severally agreed
to purchase from the Company the number of shares of Common Stock set forth
below opposite their respective names. The Underwriters are committed to
purchase all of such shares if any are purchased. Under certain circumstances,
the commitments of non-defaulting Underwriters may be increased as set forth in
the Underwriting Agreement.

<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITERS SHARES
- ------------ ---------
<S> <C>
The Robinson-Humphrey Company, LLC..........................
BancAmerica Robertson Stephens..............................
Raymond James & Associates, Inc.............................

--------
Total.............................................
========
</TABLE>

The Representatives have advised the Company that the Underwriters propose
to offer the shares of Common Stock to the public initially 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 discount not in
excess of $ per share on sales to certain other dealers. After the
initial public offering, the public offering price, concession and discount may
be changed. In addition, The Robinson-Humphrey Company, LLC has agreed to act as
the exclusive agent for the Company in connection with the obtaining,
negotiating and securing of the Company's Credit Facility, for which The
Robinson-Humphrey Company, LLC will receive a customary fee at the time of
closing such Credit Facility.

The Company has granted the Underwriters an option, exercisable by the
Representatives, to purchase up to 600,000 additional shares of Common Stock at
the initial public offering price less the underwriting discount. Such option,
which expires 30 days after the date of this Prospectus, may be exercised solely
to cover over-allotments. To the extent the Representatives exercise such
option, each of the Underwriters will be obligated, subject to certain
conditions, to purchase approximately the same percentage of the option shares
as the number of shares to be purchased initially by that Underwriter bears to
the total number of shares to be purchased initially by the Underwriters.

Prior to this Offering, there has been no established trading market for
the Common Stock. The initial price to the public for the Common Stock offered
hereby was determined by negotiations among the Company and the Representatives.
Among the factors considered in determining the initial price to the public were
the history of and the prospects for the industry in which the Company competes,
the past and present operations of the Company and the historical results of
operations of the Company, the prospects for future earnings of the Company, the
general condition of the securities markets at the time of the Offering, and the
recent market prices of securities of generally comparable companies. There can
be no assurance that an active trading market will develop for the Common Stock
or that the Common Stock will trade in the public market subsequent to the
Offering at or above the initial public offering price.

78
<PAGE> 80

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

The Representatives, on behalf of the Underwriters, may engage in
over-allotment, stabilizing transactions, syndicate covering transactions and
penalty bids in accordance with Regulation M under the Exchange Act.
Over-allotment involves syndicate sales in excess of the offering size, which
creates a syndicate short position. Stabilizing transactions permit bids to
purchase the underlying security so long as the stabilizing bids do not exceed a
specified maximum. Syndicate covering transactions involve purchases of the
Common Stock in the open market after the distribution has been completed in
order to cover syndicate short positions. Penalty bids permit the
Representatives to reclaim a selling concession from a syndicate member when
shares of Common Stock originally sold by such syndicate member are purchased in
a syndicate covering transaction to cover syndicate short positions. Such
stabilizing transactions, syndicate covering transactions and penalty bids may
cause the price of the Common Stock to be higher than it would otherwise be in
the absence of such transactions. These transactions may be effected on the
Nasdaq Stock Market or otherwise and, if commenced, may be discontinued at any
time.

In connection with the Offering, the Company's officers and directors and
certain of its shareholders have agreed that, during a period of 180 days from
the date of this Prospectus, such holders will not, without the prior written
consent of The Robinson-Humphrey Company, LLC, directly or indirectly, offer,
sell, contract to sell, grant any option with respect to, pledge, hypothecate or
otherwise dispose of, any shares of Common Stock except for a cashless exercise
of stock options or a bona fide gift provided that the donee agrees to be bound
by the terms of the donor's lockup agreement. In addition, the Company has
agreed that, during a period of 180 days from the date of this Prospectus, the
Company will not, without the prior written consent of The Robinson-Humphrey
Company, LLC, directly or indirectly, offer, sell, contract to sell, grant any
option with respect to, pledge, hypothecate or otherwise dispose of any shares
of Common Stock except for shares of Common Stock to be issued in the Offering,
in connection with acquisitions generally, and upon the exercise of the stock
options which are either (i) outstanding on the date of this Prospectus or (ii)
issued under the Plan. Based upon the relevant circumstances of the individual
request, The Robinson-Humphrey Company, LLC may, in its sole and absolute
discretion, grant exceptions to these lock-up agreements.

LEGAL MATTERS

The legality of the Common Stock offered hereby will be passed upon for the
Company by Baker & McKenzie, Miami, Florida, and for the Underwriters by King &
Spalding, Atlanta, Georgia.

EXPERTS

The financial statements of General Roofing Services, Inc., the combined
financial statements of GRI of South Florida, Inc., GRI of Orlando, Inc., GRI of
West Florida, Inc. and Dakota Leasing, Inc., the combined financial statements
of Advanced Roofing, Inc., Advanced Leasing, Inc., K&M Warehouse, Inc. and
Hi-Rise Crane, Inc., the combined financial statements of Harrington-Scanlon
Roofing Company, Inc. and Affiliates, the combined financial statements of
Specialty Associates, Inc. and Affiliate, the financial statements of Register
Contracting Company, Inc. and Slavik, Butcher and Baecker Construction Company,
Inc., Wright-Brown Roofing Company, Cyclone Roofing Company, Anthony Roofing,
Ltd. as of December 31, 1997 and for the year then ended, and Blackmore and
Buckner Roofing, Inc. as of December 31, 1997 and for the year then ended, and
the consolidated financial statements of Five-K Industries, Inc. and Subsidiary
as of March 31, 1998 and for the year then ended included in this Prospectus
have been audited by Deloitte & Touche LLP, independent auditors, as stated in
their reports appearing herein, and are included in reliance upon the reports of
such firm given upon their authority as experts in accounting and auditing.

The combined financial statements of C.E.I. Roofing, Inc., C.E.I. Florida,
Inc. and C.E.I. West Roofing Company, Inc., included in this Prospectus have
been audited by Belew Averitt LLP, independent auditors, as

79
<PAGE> 81

stated in their reports appearing herein, and are included in reliance upon the
report of such firm given upon their authority as experts in accounting and
auditing.

The financial statements of Anthony Roofing, Ltd. as of December 31, 1996
and for the fourteen month period ended December 31, 1995 and the year ended
December 31, 1996 included in this Prospectus have been audited by Dugan &
Lopatka CPAs, PC, independent auditors, as stated in their reports appearing
herein, and are included in reliance upon the report of such firm given upon
their authority as experts in accounting and auditing.

Scott & Stringfellow, Inc. has acted as independent appraisers in
connection with the valuation of General Roofing Industries.

The financial statements of Blackmore and Buckner Roofing, Inc. as of
December 31, 1996 and for the two years in the period ended December 31, 1996
included in this Prospectus have been audited by Blue & Co. LLC, independent
auditors, as stated in their reports appearing herein, and are included in
reliance upon the report of such firm given upon their authority as experts in
accounting and auditing.

The consolidated financial statements of Five-K Industries, Inc. and
Subsidiary as of March 31, 1997 and for each of the two years in the period
ended March 31, 1997 included in this Prospectus have been audited by Bearden &
Smith PC, independent auditors, as stated in their reports appearing herein, and
are included in reliance upon the report of such firm given upon their authority
as experts in accounting and auditing.

AVAILABLE INFORMATION

The Company has filed with the Commission a Form S-1 Registration Statement
(which term encompasses any and all amendments thereto) under the Securities Act
with respect to the Common Stock offered hereby. This Prospectus, which is filed
as part of the Registration Statement, does not contain all the information set
forth in the Registration Statement and the exhibits and schedules thereto,
certain items of which were omitted in accordance with the rules and regulations
of the Commission. Statements made in this Prospectus concerning the contents of
any contract, agreement or other document referred to are summaries of the terms
of such contract, agreement or other document and are not necessarily complete.
With respect to each such contract, agreement or other document filed as an
exhibit to the Registration statement, reference is hereby made to the exhibit
for a more complete description of the matter involved, and each such statement
shall be deemed qualified in its entirety by such reference. For further
information with respect to the Company, reference is hereby made to the
Registration Statement and such exhibits and schedules filed as a part thereof,
which may be inspected, without charge, at the public reference facilities
maintained by the Commission at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the following regional offices of the Commission:
7 World Trade Center, Suite 1300, New York, New York 10048; and Citicorp Center,
500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of all or
any portion of the Registration Statement may be obtained from the Public
Reference facilities of the Commission, upon payment of the prescribed fees. The
Registration Statement is also available on the Internet at the Commission's
World Wide Web site at http://www.sec.gov. The Common Stock has been approved
for quotation on The Nasdaq Stock Market's National Market, and reports, proxy
statements and other information concerning the Company can be inspected and
copied at Nasdaq Stock Market, Inc., 1735 K Street, N.W., Washington, D.C.
20006.

As a result of the Offering, the Company will be subject to the reporting
requirements under the Exchange Act and, in accordance therewith, will file
reports, proxy statements, information statements and other information with the
Commission. The Company intends to furnish annual reports to its shareholders
containing audited financial statements reported on by an independent certified
public accounting firm and quarterly reports containing unaudited summary
financial information for each of the first three quarters of each year.

80
<PAGE> 82

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
General Roofing Services, Inc. (Unaudited) Pro Forma
Combined Financial Statements
Introduction to Unaudited Pro Forma Combined Financial
Statements............................................. F-3
Unaudited Pro Forma Combined Balance Sheet................ F-4
Unaudited Pro Forma Combined Statements of Operations..... F-5
Notes to Unaudited Pro Forma Combined Financial
Statements............................................. F-7
General Roofing Services, Inc.
Independent Auditors' Report.............................. F-12
Balance Sheet............................................. F-13
Notes to Financial Statements............................. F-14
Founding Companies Historical Financial Statements
General Roofing Industries
Independent Auditors' Report.............................. F-16
Combined Balance Sheets................................... F-17
Combined Statements of Operations......................... F-18
Combined Statements of Stockholder's Equity............... F-19
Combined Statements of Cash Flows......................... F-20
Notes to Combined Financial Statements.................... F-21
CEI Roofing, Inc., CEI Florida, Inc., and CEI West Roofing
Company, Inc. (The C.E.I. Companies)
Independent Auditors' Report.............................. F-29
Combined Balance Sheets................................... F-30
Combined Statements of Income............................. F-31
Combined Statements of Stockholders' Equity............... F-32
Combined Statements of Cash Flows......................... F-33
Notes to Combined Financial Statements.................... F-34
Anthony Roofing, Ltd.
Independent Auditors' Report.............................. F-40
Balance Sheets............................................ F-42
Statements of Operations.................................. F-43
Statements of Stockholders' Equity........................ F-44
Statements of Cash Flows.................................. F-45
Notes to Financial Statements............................. F-46
Specialty Associates, Inc. and Affiliate
Independent Auditors' Report.............................. F-51
Combined Balance Sheets................................... F-52
Combined Statements of Operations......................... F-53
Combined Statements of Stockholders' Equity............... F-54
Combined Statements of Cash Flows......................... F-55
Notes to Combined Financial Statements.................... F-56
Cyclone Roofing Company
Independent Auditors' Report.............................. F-62
Balance Sheets............................................ F-63
Statements of Operations.................................. F-64
Statements of Stockholders' Equity........................ F-65
Statements of Cash Flows.................................. F-66
Notes to Financial Statements............................. F-67
</TABLE>

F-1
<PAGE> 83

<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Wright-Brown Roofing Company
Independent Auditors' Report.............................. F-73
Balance Sheets............................................ F-74
Statements of Operations.................................. F-75
Statements of Stockholder's Equity........................ F-76
Statements of Cash Flows.................................. F-77
Notes to Financial Statements............................. F-78
Harrington -- Scanlon Roofing Company, Inc. and Affiliates
Independent Auditors' Report.............................. F-84
Combined Balance Sheets................................... F-85
Combined Statements of Operations......................... F-86
Combined Statements of Stockholders' Equity............... F-87
Combined Statements of Cash Flows......................... F-88
Notes to Combined Financial Statements.................... F-89
Slavik, Butcher & Baecker Construction Company, Inc.
Independent Auditors' Report.............................. F-96
Balance Sheets............................................ F-97
Statements of Operations.................................. F-98
Statements of Stockholders' Equity........................ F-99
Statements of Cash Flows.................................. F-100
Notes to Financial Statements............................. F-101
Five-K Industries, Inc. and Subsidiary
Independent Auditors' Report.............................. F-107
Consolidated Balance Sheets............................... F-109
Consolidated Statements of Operations..................... F-110
Consolidated Statements of Stockholder's Equity........... F-111
Consolidated Statements of Cash Flows..................... F-112
Notes to Consolidated Financial Statements................ F-113
Advanced Roofing, Inc. and Affiliates
Independent Auditors' Report.............................. F-119
Combined Balance Sheets................................... F-120
Combined Statements of Operations......................... F-121
Combined Statements of Stockholders' Equity............... F-122
Combined Statements of Cash Flows......................... F-123
Notes to Combined Financial Statements.................... F-124
Blackmore and Buckner Roofing, Inc.
Independent Auditors' Report.............................. F-130
Balance Sheets............................................ F-132
Statements of Operations.................................. F-133
Statements of Stockholders' Equity........................ F-134
Statements of Cash Flows.................................. F-135
Notes to Financial Statements............................. F-136
Register Contracting Company, Inc.
Independent Auditors' Report.............................. F-142
Combined Balance Sheets................................... F-143
Combined Statements of Operations......................... F-144
Combined Statements of Stockholders' Equity............... F-145
Combined Statements of Cash Flows......................... F-146
Notes to Combined Financial Statements.................... F-147
</TABLE>

F-2
<PAGE> 84

GENERAL ROOFING SERVICES AND FOUNDING COMPANIES

UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
BASIS OF PRESENTATION

The following unaudited pro forma combined financial statements give effect
to (i) the acquisitions by General Roofing Services, Inc. ("GRS") (the
"Combination"), of the outstanding capital stock and other equity interests of
GRI, Advanced Roofing, Anthony Roofing, Blackmore & Buckner, The C.E.I.
Companies, Cyclone Roofing, Five-K, Harrington-Scanlon, Register Roofing,
Slavik-Butcher, Specialty Associates, and Wright-Brown (together, the "Founding
Companies"), and related transactions, and (ii) GRS' initial public offering of
4,000,000 shares of Common Stock (the "Offering"). The Combination will occur
concurrently with the closing of the Offering and will be accounted for using
the purchase method of accounting. GRI has been reflected as the accounting
acquirer for financial statement presentation purposes.

The unaudited pro forma combined balance sheet gives effect to the
Combination and related transactions, and the Offering, as if they had occurred
on March 31, 1998. The unaudited pro forma combined statements of operations
give effect to these transactions as if they had occurred on January 1, 1997.

GRS has preliminarily analyzed the savings that it expects to be realized
from reductions in salaries, bonuses and certain benefits to the owners of the
Founding Companies. To the extent the owners of the Founding Companies have
contractually agreed to prospective changes in salary, bonuses, benefits and
lease payments, these changes have been reflected in the unaudited pro forma
combined statements of operations. With respect to other anticipated cost
savings, GRS will not be able to accurately quantify these savings until
completion of the Combination. It is expected that these savings will be
partially offset by costs related to GRS' new corporate management and by the
costs associated with being a public company. However, because these costs
cannot be quantified at this time, they have not been included in the pro forma
combined financial information of GRS.

The estimated excess of the cost of the acquisitions over the sum of the
fair values of tangible and identifiable intangible assets less liabilities
assumed (goodwill) may be revised for changes in assets and liabilities to date
of closing as well as changes in fair value of assets acquired and liabilities
assumed based upon conditions existing at date of closing. However, it is not
expected that the revisions, if any, will be significant.

The pro forma adjustments are based on preliminary estimates, available
information and certain assumptions that GRS management deems appropriate and
may be revised as additional information becomes available. The pro forma
financial data do not purport to represent what GRS' combined financial position
or results of operations would actually have been if such transactions in fact
had occurred on those dates and are not necessarily representative of GRS'
combined financial position or combined results of operations for any future
period. Since the Founding Companies were not under common control or
management, historical combined results may not be comparable to, or indicative
of, future performance. The unaudited pro forma combined financial statements
should be read in conjunction with the historical financial statements and notes
thereto included elsewhere in this Prospectus. See also "Risk Factors" included
elsewhere herein.

F-3
<PAGE> 85

GENERAL ROOFING SERVICES, INC. AND FOUNDING COMPANIES

UNAUDITED PRO FORMA COMBINED BALANCE SHEET
MARCH 31, 1998
(IN THOUSANDS)

WRIGHT- ANTHONY SPECIALTY
GRI CEI BROWN ROOFING ASSOCIATES
------ ------- ------- ------- ----------
ASSETS
<S> <C> <C> <C> <C> <C>
Cash.................................... $ 156 $ 294 $ 253 $2,531 $ 31
Receivables, net........................ 5,548 9,549 2,239 2,736 1,753
Inventories............................. 347 370 198 107 800
Prepaid Expenses........................ 241 77 -- 28 24
Deferred Tax Assets..................... -- -- -- -- 31
------ ------- ------ ------ ------
Total Current Assets.............. 6,292 10,290 2,690 5,402 2,639
Property and Equipment, net............. 1,754 2,008 790 696 1,565
Goodwill................................ -- -- -- -- --
Life Insurance -- CSV................... -- 420 56 -- --
Other Noncurrent Assets................. 1,348 -- 162 -- 162
------ ------- ------ ------ ------
Total Assets...................... $9,394 $12,718 $3,698 $6,098 $4,366
====== ======= ====== ====== ======
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts Payable........................ $2,329 $ 4,560 $1,087 $ 449 $ 824
Accrued Expenses........................ 692 564 610 174 389
Billings in Excess of Costs and
Profit................................. 494 744 98 50 205
Distributions Payable and Accrued....... -- 434 -- -- --
Deferred Income Taxes................... -- -- -- -- --
Notes Payable........................... -- 328 -- -- 800
Current Portion of Long-Term Debt....... 774 387 33 -- 202
Current Portion of Capitalized Leases... 157 -- 55 -- --
Due to Related Parties.................. -- -- -- -- --
------ ------- ------ ------ ------
Total Current Liabilities......... 4,446 7,017 1,883 673 2,420
Long-Term Debt.......................... 3,245 433 58 -- 469
Long-Term Capitalized Leases............ 275 -- 22 -- --
Deferred Income Taxes................... -- -- -- -- 139
Other Non-Current Liabilities........... 150 -- -- -- --
Stockholders' Equity:
Common Stock........................... 1 335 5 1 34
Additional Paid In Capital............. 879 85 24 -- 216
Retained Earnings...................... 398 4,848 1,706 5,424 1,246
Treasury Stock......................... -- -- -- -- (158)
------ ------- ------ ------ ------
Total Stockholders' Equity........ 1,278 5,268 1,735 5,425 1,338
------ ------- ------ ------ ------
Total Liabilities and
Stockholders' Equity............. $9,394 $12,718 $3,698 $6,098 $4,366
====== ======= ====== ====== ======

CYCLONE ADVANCED REGISTER SLAVIK HARRINGTON- BLACKMORE
ROOFING ROOFING ROOFING BUTCHER SCANLON FIVE-K & BUCKNER
------- -------- -------- ------- ----------- ------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Cash.................................... $ 487 $ 210 $ 489 $ 186 $ 1 $ 696 $ 247
Receivables, net........................ 3,514 2,436 1,545 1,861 2,495 1,769 1,050
Inventories............................. 12 95 88 -- 242 36 76
Prepaid Expenses........................ -- 23 34 18 -- -- 24
Deferred Tax Assets..................... -- -- -- -- 38 -- --
------ ------ ------ ------ ------ ------ ------
Total Current Assets.............. 4,013 2,764 2,156 2,065 2,776 2,501 1,397
Property and Equipment, net............. 837 2,063 549 366 1,057 374 343
Goodwill................................ -- -- -- -- -- -- --
Life Insurance -- CSV................... -- -- -- -- -- -- 85
Other Noncurrent Assets................. 37 -- 46 31 80 97 5
------ ------ ------ ------ ------ ------ ------
Total Assets...................... $4,887 $4,827 $2,751 $2,462 $3,913 $2,972 $1,830
====== ====== ====== ====== ====== ====== ======

LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts Payable........................ $ 281 $ 713 $ 590 $ 817 $1,342 $ 428 $ 291
Accrued Expenses........................ 173 565 504 309 227 605 255
Billings in Excess of Costs and
Profit................................. 236 249 256 194 586 121 122
Distributions Payable and Accrued....... -- -- -- -- -- -- --
Deferred Income Taxes................... -- -- 69 117 -- 360 --
Notes Payable........................... -- -- -- -- -- -- --
Current Portion of Long-Term Debt....... 185 828 45 105 543 40 23
Current Portion of Capitalized Leases... 26 -- -- -- 30 -- --
Due to Related Parties.................. -- -- -- -- -- -- --
------ ------ ------ ------ ------ ------ ------
Total Current Liabilities......... 901 2,355 1,464 1,542 2,728 1,554 691
Long-Term Debt.......................... 78 563 132 118 834 47 77
Long-Term Capitalized Leases............ 34 -- -- -- 79 -- --
Deferred Income Taxes................... -- -- 22 9 -- 15 --
Other Non-Current Liabilities........... -- -- -- -- -- -- --
Stockholders' Equity:
Common Stock........................... 25 1 20 10 2 8 29
Additional Paid In Capital............. -- 673 73 -- 19 30 370
Retained Earnings...................... 3,849 1,340 1,040 783 251 1,318 663
Treasury Stock......................... -- (105) -- -- -- -- --
------ ------ ------ ------ ------ ------ ------
Total Stockholders' Equity........ 3,874 1,909 1,133 793 272 1,356 1,062
------ ------ ------ ------ ------ ------ ------
Total Liabilities and
Stockholders' Equity............. $4,887 $4,827 $2,751 $2,462 $3,913 $2,972 $1,830
====== ====== ====== ====== ====== ====== ======

<CAPTION>
PRO FORMA
PRO FORMA PRO FORMA OFFERING COMBINED
COMBINED ADJUSTMENTS COMBINED ADJUSTMENTS AS ADJUSTED
-------- ----------- --------- ----------- -----------
ASSETS
<S> <C> <C> <C> <C> <C>
Cash.................................... $5 ,581 $ (3,176) $ 2,405 $ 12,724 $ 15,129
Receivables, net........................ 36,495 (820) 35,675 -- 35,675
Inventories............................. 2,371 -- 2,371 -- 2,371
Prepaid Expenses........................ 469 (13) 456 -- 456
Deferred Tax Assets..................... 69 -- 69 -- 69
------- -------- -------- -------- --------
Total Current Assets.............. 44,985 (4,009) 40,976 12,724 53,700
Property and Equipment, net............. 12,402 (1,315) 11,087 -- 11,087
Goodwill................................ -- 64,298 64,298 -- 64,298
Life Insurance -- CSV................... 561 (561) -- -- --
Other Noncurrent Assets................. 1,968 (148) 1,820 -- 1,820
------- -------- -------- -------- --------
Total Assets...................... $59,916 $ 58,265 $118,181 $ 12,724 $130,905
======= ======== ======== ======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY

Accounts Payable........................ $13,711 $ (434) $ 13,277 $ -- $ 13,277
Accrued Expenses........................ 5,067 (181) 4,886 -- 4,886
Billings in Excess of Costs and
Profit................................. 3,355 (64) 3,291 -- 3,291
Distributions Payable and Accrued....... 434 (434) -- -- --
Deferred Income Taxes................... 546 430 976 -- 976
Notes Payable........................... 1,128 12,096 13,224 (1,128) 12,096
Current Portion of Long-Term Debt....... 3,165 (267) 2,898 (2,898) --
Current Portion of Capitalized Leases... 268 -- 268 -- 268
Due to Related Parties.................. -- 25,686 25,686 (25,686) --
------- -------- -------- -------- --------
Total Current Liabilities......... 27,674 36,832 64,506 (29,712) 34,794
Long-Term Debt.......................... 6,054 (410) 5,644 (5,644) --
Long-Term Capitalized Leases............ 410 -- 410 -- 410
Deferred Income Taxes................... 185 -- 185 -- 185
Other Non-Current Liabilities........... 150 -- 150 -- 150
Stockholders' Equity:
Common Stock........................... 471 (408) 63 40 103
Additional Paid In Capital............. 2,369 44,854 47,223 48,040 95,263
Retained Earnings...................... 22,866 (22,866) -- -- --
Treasury Stock......................... (263) 263 -- -- --
------- -------- -------- -------- --------
Total Stockholders' Equity........ 25,443 21,843 47,286 48,080 95,366
------- -------- -------- -------- --------
Total Liabilities and
Stockholders' Equity............. $59,916 $ 58,265 $118,181 $ 12,724 $130,905
======= ======== ======== ======== ========
</TABLE>

F-4
<PAGE> 86

GENERAL ROOFING SERVICES, INC. AND FOUNDING COMPANIES

UNAUDITED PRO FORMA COMBINED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1998
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

<TABLE>
<CAPTION>
TOTAL
OTHER PRO FORMA
WRIGHT- ANTHONY SPECIALTY CYCLONE FOUNDING PRO FORMA COMBINED
GRI CEI BROWN ROOFING ASSOCIATES ROOFING COMPANIES ADJUSTMENTS AS ADJUSTED
------ ------- ------- ------- ---------- ------- --------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues............... $7,135 $10,025 $2,447 $2,489 $2,300 $2,829 $13,521 $(1,162) $ 39,584
Cost of Revenues....... 5,308 7,733 2,113 2,132 2,286 2,457 10,824 (1,152) 31,701
------ ------- ------ ------ ------ ------ ------- ------- -----------
Gross Profit........... 1,827 2,292 334 357 14 372 2,697 (10) 7,883
SG&A Expenses.......... 2,049 2,105 306 445 317 227 2,479 61 7,989
------ ------- ------ ------ ------ ------ ------- ------- -----------
Income (Loss) From
Operations........... (222) 187 28 (88) (303) 145 218 (71) (106)
Other Income
(Expense)............ (147) (58) (17) 56 (32) 7 (43) 100 (134)
------ ------- ------ ------ ------ ------ ------- ------- -----------
Income (Loss) before
Taxes................ (369) 129 11 (32) (335) 152 175 29 (240)
Income Tax (Provision)
Benefit.............. -- (3) -- -- 131 -- 24 (216) (64)
------ ------- ------ ------ ------ ------ ------- ------- -----------
Net Income (Loss)...... $ (369) $ 126 $ 11 $ (32) $ (204) $ 152 $ 199 $ (187) $ (304)
====== ======= ====== ====== ====== ====== ======= ======= ===========
Basic and Diluted Loss
Per Share............ $ (0.03)
===========
Shares Used in
Computing Pro Forma
Net Loss Per Share... 10,258,667
===========
</TABLE>

<TABLE>
<CAPTION>
OTHER FOUNDING COMPANIES TOTAL
----------------------------------------------------------------- OTHER
ADVANCED REGISTER SLAVIK HARRINGTON- BLACKMORE FOUNDING
ROOFING ROOFING BUTCHER SCANLON FIVE-K & BUCKNER COMPANIES
-------- -------- ------- ----------- ------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Revenues................................... $3,097 $1,964 $2,858 $2,369 $2,172 $1,061 $13,521
Cost of Revenues........................... 2,467 1,660 2,303 2,185 1,313 896 10,824
------ ------ ------ ------ ------ ------ -------
Gross Profit............................... 630 304 555 184 859 165 2,697
SG&A Expenses.............................. 400 258 347 377 882 215 2,479
------ ------ ------ ------ ------ ------ -------
Income (Loss) From Operations.............. 230 46 208 (193) (23) (50) 218
Other Income (Expense)..................... (31) 8 (1) (27) 8 -- (43)
------ ------ ------ ------ ------ ------ -------
Income (Loss) before Taxes................. 199 54 207 (220) (15) (50) 175
Income Tax (Provision) Benefit............. -- (17) (59) 94 6 -- 24
------ ------ ------ ------ ------ ------ -------
Net Income (Loss).......................... $ 199 $ 37 $ 148 $ (126) $ (9) $ (50) $ 199
====== ====== ====== ====== ====== ====== =======
</TABLE>

F-5
<PAGE> 87

GENERAL ROOFING SERVICES, INC. AND FOUNDING COMPANIES

UNAUDITED PRO FORMA COMBINED STATEMENTS OF OPERATIONS
YEAR ENDED DECEMBER 31, 1997
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

<TABLE>
<CAPTION>
TOTAL
OTHER PRO FORMA
WRIGHT- ANTHONY SPECIALTY CYCLONE FOUNDING PRO FORMA COMBINED
GRI CEI BROWN ROOFING ASSOCIATES ROOFING COMPANIES ADJUSTMENTS AS ADJUSTED
------- ------- -------- -------- ---------- -------- --------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues............... $26,792 $45,163 $15,316 $19,778 $17,198 $16,058 $61,865 $(6,261) $ 195,909
Cost of Revenues....... 19,101 34,899 12,820 14,441 14,957 12,524 50,311 (5,663) 153,390
------- ------- ------- ------- ------- ------- ------- ------- -----------
Gross Profit........... 7,691 10,264 2,496 5,337 2,241 3,534 11,554 (598) 42,519
SG&A Expenses.......... 6,995 8,018 1,393 2,870 1,487 1,099 9,431 (2,189) 29,104
------- ------- ------- ------- ------- ------- ------- ------- -----------
Income From
Operations........... 696 2,246 1,103 2,467 754 2,435 2,123 1,591 13,415
Other Income
(Expense)............ (71) 7 (147) 103 (134) (13) (106) (170) (531)
------- ------- ------- ------- ------- ------- ------- ------- -----------
Income Before Taxes.... 625 2,253 956 2,570 620 2,422 2,017 1,421 12,884
Income Tax (Provision)
Benefit.............. -- (27) -- (50) (285) -- (467) (4,823) (5,652)
------- ------- ------- ------- ------- ------- ------- ------- -----------
Net Income..... $ 625 $ 2,226 $ 956 $ 2,520 $ 335 $ 2,422 $ 1,550 $(3,402) $ 7,232
======= ======= ======= ======= ======= ======= ======= ======= ===========
Basic and Diluted
Earnings Per Share... $ 0.70
===========
Shares Used in
Computing Pro Forma
Earnings Per Share... 10,258,667
===========
</TABLE>

<TABLE>
<CAPTION>
OTHER FOUNDING COMPANIES TOTAL
------------------------------------------------------------------ OTHER
ADVANCED REGISTER SLAVIK HARRINGTON- BLACKMORE FOUNDING
ROOFING ROOFING BUTCHER SCANLON FIVE-K & BUCKNER COMPANIES
-------- -------- -------- ----------- ------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Revenues................................... $12,174 $6,832 $12,213 $11,816 $11,091 $7,739 $61,865
Cost of Revenues........................... 9,827 5,792 10,446 10,046 7,879 6,321 50,311
------- ------ ------- ------- ------- ------ -------
Gross Profit............................... 2,347 1,040 1,767 1,770 3,212 1,418 11,554
SG&A Expenses.............................. 1,571 1,002 1,314 1,549 2,775 1,220 9,431
------- ------ ------- ------- ------- ------ -------
Income From Operations..................... 776 38 453 221 437 198 2,123
Other Income (Expense)..................... (124) 90 (19) (102) 32 17 (106)
------- ------ ------- ------- ------- ------ -------
Income Before Taxes........................ 652 128 434 119 469 215 2,017
Income Tax (Provision) Benefit............. -- (82) (147) (28) (210) -- (467)
------- ------ ------- ------- ------- ------ -------
Net Income......................... $ 652 $ 46 $ 287 $ 91 $ 259 $ 215 $ 1,550
======= ====== ======= ======= ======= ====== =======
</TABLE>

F-6
<PAGE> 88

GENERAL ROOFING SERVICES, INC. AND FOUNDING COMPANIES

NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS

1. GENERAL

General Roofing Services, Inc. ("GRS"), was founded to create a leading
national provider of roofing contracting and maintenance services to the
commercial, government and new construction markets. GRS has conducted no
operations to date and will effect the Combination concurrently with and as a
condition to the closing of the Offering.

The historical financial statements reflect the financial position and
results of operations of the Founding Companies and were derived from the
respective Founding Companies' financial statements. The periods included in
these financial statements for the individual Founding Companies are as of and
for the year ended December 31, 1997, except for GRI for which the period is for
the year ended October 31, 1997, Register Roofing, for which the period is for
the year ended September 30 1997, Specialty Associates, for which the period is
for the year ended February 2, 1998, and Five-K for which the period is for the
year ended March 31, 1998. The audited historical financial statements included
elsewhere herein have been included in accordance with Securities and Exchange
Commission ("SEC") Staff Accounting Bulletin No. 80.

2. ACQUISITION OF FOUNDING COMPANIES

Concurrently with and as a condition to the closing of the Offering, GRS
will acquire all of the outstanding capital stock and other equity interests of
the Founding Companies. The Combination will be accounted for using the purchase
method of accounting with GRI being reflected as the accounting acquirer.

The following table sets forth the consideration to be paid (a) in cash and
(b) in shares of Common Stock to the common stockholders of each of the Founding
Companies, other than the accounting acquirer (GRI). For purposes of computing
the estimated purchase price for accounting purposes, the value of the shares
was determined using an estimated fair value of $11.20 per share (or $46.9
million), which is less than the assumed initial public offering price of $14.00
per share due primarily to restrictions on the sale and transferability of the
shares issued. This discount represents a 20% reduction from the Offering price.
The Company believes that the difference between the 20% discount rate applied
to the Offering price and a nominal discount rate is not material to the
Unaudited Pro Forma Financial Statements and is not expected to be material to
the Financial Statements in future periods. The Company is currently in process
of obtaining a valuation which management believes will support this discount.
The total purchase price, including cash consideration of $41.3 million, is
$88.2 million (without giving effect to certain earn-out provisions and S
Corporation Distributions to be made by certain Founding Companies prior to the
consummation of the Offering). The following table is reflected net of estimated
purchase price adjustments of $799,000 and net transfers of $14.6 million which
represents previously undistributed earnings of the Founding Companies other
than GRI (dollars in thousands):

<TABLE>
<CAPTION>
SHARES OF ASSUMED
CASH COMMON STOCK INDEBTEDNESS
------- ------------ ------------
<S> <C> <C> <C>
CEI................................................. $ 8,630 937,143 $ 3,267
Wright-Brown........................................ 1,440 334,000 2,065
Anthony Roofing..................................... 2,466 1,022,357 2,717
Specialty Associates................................ 1,068 258,500 1,471
Cyclone Roofing..................................... (268) 603,000 3,836
Advanced Roofing.................................... 2,596 268,143 1,660
Register Roofing.................................... 3,210 -- 177
Slavik Butcher...................................... 820 192,857 170
Harrington-Scanlon.................................. 352 31,428 1,393
Five-K.............................................. 4,524 414,357 87
Blackmore & Buckner................................. 848 129,286 550
------- --------- -------
$25,686 4,191,071 $17,393
======= ========= =======
</TABLE>

F-7
<PAGE> 89
GENERAL ROOFING SERVICES, INC. AND FOUNDING COMPANIES

NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

The above table differs from the schedule at "The Combination" because it
excludes GRI, the accounting acquirer, and it assumes that the S Corporation
Distributions were made prior to the date of the Combination. Certain of the
Founding Companies will incur debt to fund the S Corporation Distributions.

3. UNAUDITED PRO FORMA COMBINED BALANCE SHEET ADJUSTMENTS

(A) Records the S Corporation Distributions of $15.3 million, using cash on
hand and distributions of other net assets of the applicable company and the
incurrence of debt in the amount of $12.1 million.

(B) Records the deferred income tax liabilities associated with converting
all acquired companies taxed under Subchapter S of the Internal Revenue Code
(the Code) to corporations taxed under Subchapter C of the Internal Revenue
Code.

(D) Records the elimination of all non-operating assets and liabilities to
be retained by the owners of the Founding Companies as well as affiliated
businesses to be retained by the owners of the Founding Companies.

(E) Records the elimination of the historical equity accounts of the
Founding Companies excluding GRI, the accounting acquirer.

(F) Records the acquisition of the Founding Companies excluding GRI, the
accounting acquirer, including the cash and common stock due to those companies,
and records all fair value adjustments necessary in purchase accounting. In
connection with the combination of certain of the Founding Companies, the
Company has agreed to make contingent payments, if earned, to the former owners
over periods up to two years based on formulas in their respective acquisition
agreements. These payments will be made through a combination of cash and shares
of Common Stock. Amounts earned under these terms will be recorded as additional
goodwill at the time the amounts are known and will be amortized over the
remaining amortization period.

(G) Records the extraordinary charge related to early extinguishment of
debt.

(H) Records net proceeds from the issuance of 4,000,000 shares of General
Roofing Services' Common Stock at $14.00 per share, net of estimated offering
costs of $7.9 million. Offering costs consist primarily of underwriting
discounts and commissions, accounting fees, legal fees, and printing expenses.

(I) The Company periodically reviews the carrying value of goodwill
(whenever events or circumstances indicate that the carrying amount of the asset
may not be recoverable), along with other long-lived assets in accordance with
Statement of Financial Accounting Standards No. 121, Accounting for the
Impairment of Long-Lived Assets and for Long Lived Assets to be Disposed Of, and
impairments, if any, are recognized when the expected net future undiscounted
cash flows derived from such assets are less than their carrying value.
Measurement of the amount of impairment, if any, is based upon the difference
between the carrying value and the fair value of the related assets.

F-8
<PAGE> 90
GENERAL ROOFING SERVICES, INC. AND FOUNDING COMPANIES

NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

The following tables summarize unaudited pro forma combined balance sheet
adjustments:

<TABLE>
<CAPTION>
PRO FORMA ADJUSTMENTS TOTAL OFFERING
----------------------------------------------------------------- PRO FORMA ADJUSTMENT
(A) (B) (C) (D) (E) (F) (G) ADJUSTMENTS (H)
------- ---- -------- ------- -------- ------- ------ ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Cash............................ $(2,718) $ -- $ -- $ (458) $ -- $ -- $ -- $(3,176) $12,724
Receivables, net................ (332) -- -- (488) -- -- -- (820) --
Prepaid Expenses................ -- -- -- (13) -- -- -- (13) --
Property and Equipment, net..... -- -- -- (1,815) -- 500 -- (1,315) --
Goodwill........................ -- 300 -- -- (8,554) 72,552 -- 64,298 --
Cash Surrender Value of Life
Insurance..................... -- -- -- (561) -- -- -- (561) --
Other Noncurrent Assets......... -- -- -- (148) -- -- -- (148) --
Accounts Payable................ -- -- -- (434) -- -- -- (434) --
Accrued Expenses................ -- -- -- (181) -- -- -- (181) --
Billings in Excess of Costs and
Estimated Profit.............. -- -- -- (64) -- -- -- (64) --
Distributions Payable and
Accrued....................... (434) -- -- -- -- -- -- (434) --
Deferred Income Taxes........... -- 300 -- (65) -- 195 -- 430 --
Notes Payable................... -- -- 12,694 (598) -- -- -- 12,096 (1,128)
Current Portion of Long-Term
Debt.......................... -- -- -- (267) -- -- -- (267) (2,898)
Due to Related Parties.......... 12,694 -- (12,694) (231) -- 25,917 -- 25,686 (25,686)
Long-Term Debt.................. -- -- -- (610) -- -- 200 (410) (5,644)
Common Stock.................... -- -- -- (5) (465) 62 -- (408) 40
Additional Paid In Capital...... (14,912) -- -- (667) 13,555 46,878 -- 44,854 48,040
Retained Earnings............... (398) -- -- (361) (21,907) -- (200) (22,866) --
Treasury Stock.................. -- -- -- -- 263 -- -- 263 --
------- ---- -------- ------- -------- ------- ------ ------- -------
$ -- $ -- $ -- $ -- $ -- $ -- $ -- $ -- $ --
======= ==== ======== ======= ======== ======= ====== ======= =======
</TABLE>

The following table summarizes adjustment D to the pro forma combined
balance sheet:

<TABLE>
<CAPTION>
WRIGHT THERREL
CEI BROWN ADVANCED SLAVIK KIZER BLACKMORE HARRINGTON TOTAL
MARCH, 31, 1998 ----- ------ -------- ------ ------- --------- ---------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Cash....................................... $ -- $(98) $ (29) $(331) $ -- $ -- $ -- $ (458)
Receivables, net........................... -- -- 18 (506) -- -- -- (488)
Prepaid Expenses........................... -- -- -- (13) -- -- -- (13)
Property and Equipment, net................ -- -- (1,500) (81) (133) -- (101) (1,815)
Goodwill................................... -- -- -- -- -- -- -- --
Cash Surrender Value of Life Insurance..... (420) (56) -- -- -- (85) -- (561)
Other Noncurrent Assets.................... -- (37) -- (21) (90) -- -- (148)
Accounts Payable........................... -- -- -- (434) -- -- -- (434)
Accrued Expenses........................... -- (98) (1) (82) -- -- -- (181)
Billings in Excess of Costs and Estimated
Profit................................... -- -- -- (64) -- -- -- (64)
Distributions Payable and Accrued.......... -- -- -- -- -- -- -- --
Deferred Income Taxes...................... -- -- -- (65) -- -- -- (65)
Notes Payable.............................. (420) (93) -- -- -- (85) -- (598)
Current Portion of Long-Term Debt.......... -- -- (220) (47) -- -- -- (267)
Due to Related Parties..................... -- -- -- -- (223) -- (8) (231)
Long-Term Debt............................. -- -- (511) (6) -- -- (93) (610)
Common Stock............................... -- -- -- (5) -- -- -- (5)
Additional Paid In Capital................. -- -- (667) -- -- -- -- (667)
Retained Earnings.......................... -- -- (112) (249) -- -- -- (361)
Treasury Stock............................. -- -- -- -- -- -- -- --
----- ---- ------- ----- ----- ---- ---- -------
$ -- $ -- $ -- $ -- $ -- $ -- $ -- $ --
===== ==== ======= ===== ===== ==== ==== =======
</TABLE>

4. UNAUDITED PRO FORMA COMBINED STATEMENTS OF OPERATIONS ADJUSTMENTS

(A) Records the prospective reduction in salaries, bonuses and benefits to
the owners of the Founding Companies to which they have agreed. These reductions
in salaries, bonuses and benefits are in accordance with the terms of employment
agreements. Such employment agreements are generally for two years, contain
restrictions related to competition and provide severance for termination of
employment in certain circumstances.

The salaries, bonuses and benefits and other compensation items recorded in
the individual financial statements of each of the Founding Companies amounted
to $5.9 million and $1.0 million in the twelve month period ended at or near
December 31, 1997 and the three month period ended March 31, 1998, respectively.
F-9
<PAGE> 91
GENERAL ROOFING SERVICES, INC. AND FOUNDING COMPANIES

NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

The contractually agreed upon compensation and benefits for these same
companies, on a going forward basis, amount to $2.6 million and $0.7 million for
the twelve month period ended at or near December 31, 1997 and the three month
period ended March 31, 1998. The differences between these amounts for the
periods noted herein equate to $3.3 million and $0.3 million, respectively, and
are reflected as pro forma adjustments.

(B) Records reductions in historical interest expense of the Founding
Companies related to debt to be repaid with proceeds of the Offering.

(D) Records statement of operations effect of the elimination of all
non-operating assets and liabilities to be retained by the owners of the
Founding Companies as well as affiliated businesses to be retained by the owners
of the Founding Companies.

(E) Records amortization of goodwill to be recorded as a result of the
Combination over an estimated life of 40 years.

(F) Records the incremental provision for federal and state income taxes
related to pro forma adjustments as well as income taxes on S Corporation
earnings.

(G) In connection with early extinguishment of debt, the Company expects to
incur an extraordinary charge of $200,000. This amount is not reflected in the
pro forma statement of operations due to its non-recurring nature.

The following tables summarize unaudited pro forma combined statements of
operations adjustments at March 31, 1998:

<TABLE>
<CAPTION>
PRO FORMA ADJUSTMENTS
------------------------------------------------------------
TOTAL
PRO FORMA
(A) (B) (C) (D) (E) (F) ADJUSTMENTS
----- ---- ----- ------- ----- ----- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Revenues................................ $ -- $ -- $ -- $(1,162) $ -- $ -- $(1,162)
Cost of Revenues........................ -- -- -- (1,152) -- -- (1,152)
----- ---- ----- ------- ----- ----- -------
Gross Profit............................ -- -- -- (10) -- -- (10)
Selling, General and Administrative..... (317) -- -- (24) 402 -- 61
----- ---- ----- ------- ----- ----- -------
Income From Operations.................. 317 -- -- 14 (402) -- (71)
Other Income (Expense).................. -- 322 (242) 20 -- -- 100
----- ---- ----- ------- ----- ----- -------
Income before Taxes..................... 317 322 (242) 34 (402) -- 29
Income Tax (Provision) Benefit.......... -- -- -- (1) -- (215) (216)
----- ---- ----- ------- ----- ----- -------
Net Income..................... $ 317 $322 $(242) $ 33 $(402) $(215) $ (187)
===== ==== ===== ======= ===== ===== =======
</TABLE>

The following table summarizes adjustment D to the pro forma combined
statement of operations at March 31, 1998:

<TABLE>
<CAPTION>
ADVANCED REGISTER SLAVIK HARRINGTON TOTAL
-------- -------- ------- ---------- -------
<S> <C> <C> <C> <C> <C>
Revenues...................................... $ (106) $193 $(1,249) $ -- $(1,162)
Cost of Revenues.............................. (121) 101 (1,132) -- (1,152)
------ ---- ------- ---- -------
Gross Profit.................................. 15 92 (117) -- (10)
Selling, General and Administrative........... (5) 70 (86) (3) (24)
------ ---- ------- ---- -------
Income From Operations........................ 20 22 (31) 3 14
Other Income (Expense)........................ 18 (1) -- 3 20
------ ---- ------- ---- -------
Income Before Taxes........................... 38 21 (31) 6 34
Income Tax (Provision) Benefit................ -- (9) 8 -- (1)
------ ---- ------- ---- -------
Net Income.................................... $ 38 $ 12 $ (23) $ 6 $ 33
====== ==== ======= ==== =======
</TABLE>

F-10
<PAGE> 92
GENERAL ROOFING SERVICES, INC. AND FOUNDING COMPANIES

NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

The following tables summarize unaudited pro forma combined statements of
operations adjustments at December 31, 1997:

<TABLE>
<CAPTION>
PRO FORMA ADJUSTMENTS
------------------------------------------------------------------
TOTAL
PRO FORMA
(A) (B) (C) (D) (E) (F) ADJUSTMENTS
------- ---- ----- ------- ------- ------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Revenues........................... $ -- $ -- $ -- $(6,261) $ -- $ -- $(6,261)
Cost of Revenues................... -- -- -- (5,663) -- -- (5,663)
------- ---- ----- ------- ------- ------- -------
Gross Profit....................... -- -- -- (598) -- -- (598)
Selling, General and
Administrative................... (3,262) -- -- (534) 1,607 -- (2,189)
------- ---- ----- ------- ------- ------- -------
Income From Operations............. 3,262 -- -- (64) (1,607) -- 1,591
Other Income (Expense)............. -- 711 (968) 87 -- -- (170)
------- ---- ----- ------- ------- ------- -------
Income before Taxes................ 3,262 711 (968) 23 (1,607) -- 1,421
Income Tax (Provision) Benefit..... -- -- -- 44 -- (4,867) (4,823)
------- ---- ----- ------- ------- ------- -------
Net Income................ $ 3,262 $711 $(968) $ 67 $(1,607) $(4,867) $(3,402)
======= ==== ===== ======= ======= ======= =======
</TABLE>

The following table summarizes adjustment D to the pro forma combined
statement of operations at December 31, 1998:

<TABLE>
<CAPTION>
ADVANCED REGISTER SLAVIK HARRINGTON TOTAL
-------- -------- ------- ---------- -------
<S> <C> <C> <C> <C> <C>
Revenues.............................................. $ (577) $307 $(5,991) $ -- $(6,261)
Cost of Revenues...................................... (619) 161 (5,205) -- (5,663)
------ ---- ------- ---- -------
Gross Profit.......................................... 42 146 (786) -- (598)
Selling, General and Administrative................... (21) 114 (614) (13) (534)
------ ---- ------- ---- -------
Income From Operations................................ 63 32 (172) 13 (64)
Other Income (Expense)................................ 78 -- -- 9 87
------ ---- ------- ---- -------
Income Before Taxes................................... 141 32 (172) 22 23
Income Tax (Provision) Benefit........................ -- (14) 58 -- 44
------ ---- ------- ---- -------
Net Income............................................ $ 141 $ 18 $ (114) $ 22 $ 67
====== ==== ======= ==== =======
</TABLE>

F-11
<PAGE> 93

INDEPENDENT AUDITORS' REPORT

To the Stockholder of General Roofing Services, Inc.:

We have audited the accompanying balance sheet of General Roofing Services,
Inc. (the "Company") as of May 8, 1998 (date of formation). This financial
statement is the responsibility of the Company's management. Our responsibility
is to express an opinion on this financial statement based on our audit.

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

In our opinion, such balance sheet presents fairly, in all material
respects, the financial position of the Company as of May 8, 1998 (date of
formation) in conformity with generally accepted accounting principles.

DELOITTE & TOUCHE LLP

Miami, Florida
May 26, 1998

F-12
<PAGE> 94

GENERAL ROOFING SERVICES, INC.

BALANCE SHEET
MAY 8, 1998 (DATE OF FORMATION)

<TABLE>
<S> <C>
TOTAL ASSETS................................................ $ --
--------
LIABILITIES................................................. --
STOCKHOLDER'S EQUITY:
Common stock, 90,000,000 shares authorized, no shares
issued or outstanding; $0.01 par value................. --
Preferred stock, no shares issued or outstanding.......... --
--------
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY........ $ --
--------
</TABLE>

F-13
<PAGE> 95

GENERAL ROOFING SERVICES, INC.

NOTES TO BALANCE SHEET
MAY 8, 1998 (DATE OF FORMATION)

1. BUSINESS AND ORGANIZATION

General Roofing Services, Inc. (referred to herein as "GRS" or the
"Company") was formed on May 8, 1998 to become a holding company of entities
that provide commercial roofing services. GRS intends to acquire a number of
such companies (the "Combination"), complete an initial public offering (the
"Offering") of its common stock and, subsequent to the Offering, continue to
acquire through merger or purchase, similar companies to expand its operations
on a national basis. GRS has not conducted any operations to date and has not
yet been capitalized.

GRS has signed a definitive agreement to acquire by Combination certain
companies that are wholly-owned by GRS' stockholder (the "General Roofing
Industries"). These acquisitions will be accounted for as a reorganization of
entities under common control which is similar to the pooling of interests
method of accounting for business combinations. The General Roofing Industries
has been identified as the accounting acquirer of the unrelated entities
described below for financial statement presentation purposes.

GRS has signed definitive agreements to acquire by Combination certain
unrelated companies. The acquisition of these unrelated companies will be
accounted for under the purchase method of accounting for business combinations.

GRS is dependent upon the Offering to execute the pending Combination.
There is no assurance that the pending Offering or Combination will be
completed.

2. STOCK OPTION PLAN

1998 STOCK OPTION AND RESTRICTED STOCK PURCHASE PLAN -- The Company has
adopted a 1998 Stock Option and Restricted Stock Purchase Plan (the "Plan"). As
of May 26, 1998, no options have been granted. After the Combination with
General Roofing Industries is consummated, GRS expects to convert options issued
by General Roofing Industries into options to purchase shares of GRS' common
stock. The number of GRS options that are to be outstanding as a result of the
conversion will be in direct proportion to the number of shares of GRS that will
be issued to the General Roofing Industries' stockholder in the reorganization.
It is anticipated to amount to options to acquire approximately 216,300 shares
of GRS common stock. The aggregate exercise price of the options to acquire
these shares of GRS will be approximately $1.4 million. Such is the same
aggregate exercise price of the General Roofing Industries options that were
previously granted and that are expected to be converted after the
reorganization. The conversion of the General Roofing Industries options into
GRS options is expected to occur upon the reorganization and merger of these
related entities. As such, it is not considered to be a new issuance or
modification (and thus not a new measurement date) of the original grant by
General Roofing Industries. Further it is anticipated that an additional 560,000
options will be granted at the date of the Offering at the initial public
offering price. A reserve of 1,500,000 shares of the Company's common stock has
been established for issuance under the Option Plan.

The purpose of the Plan is to attract and retain qualified personnel, to
provide additional incentives to employees, officers and directors of the
Company and to promote the success of the Company's business. In furtherance of
this purpose, the Plan authorizes (i) the granting of incentive and
non-statutory stock options to purchase shares of Common Stock to employees,
officers and directors of the Company, and (ii) the granting of rights to
purchase shares of Common Stock on a "restricted stock" basis (the "Awards") to
employees, officers and directors of the Company. Incentive stock options may
only be granted to full-time employees of the Company or its subsidiaries.
Non-statutory stock options and Awards may be granted to directors of the
Company and any person employed by the Company or its subsidiaries. The Plan is
administered by the Compensation Committee of the Board. The Compensation
Committee has complete discretion to determine which eligible individuals are to
receive option or Award grants, the number of shares subject to each such

F-14
<PAGE> 96
GENERAL ROOFING SERVICES, INC.

NOTES TO BALANCE SHEET -- (CONTINUED)

grant, the status of any granted option as either an incentive stock option or a
non-statutory option, the vesting schedule to be in effect for the option or
Award grant and the maximum term for which any granted option or Award is to
remain outstanding.

Each option granted under the Plan has a maximum term of 10 years (except
incentive stock options granted to holders of more than 10% of the voting power
of the Company's outstanding stock which has a maximum term of five years),
subject to earlier termination following the optionee's cessation of service
with the Company. Options granted under the Plan may be exercised only for fully
vested shares. The exercise price of incentive stock options and non-statutory
stock option's granted under the Plan must be at least 100% and 85% of the fair
market value of the stock subject to the option on the date of grant,
respectively (or 110% with respect to incentive stock options granted to holders
of more than 10% of the voting power of the Company's outstanding stock). The
Board or the Compensation Committee has the authority to determine the fair
market value of the stock. The purchase price is payable immediately upon the
exercise of the option.

Options granted under the Plan have been structured to provide incentive to
achieve the Company's financial goals. In general, options granted under the
Plan will vest ratably over a four-year period commencing one year from the date
of grant.

F-15
<PAGE> 97

INDEPENDENT AUDITORS' REPORT

To the Stockholder of
GRi of South Florida, Inc.,
GRi of Orlando, Inc.,
GRi of West Florida, Inc. and
Dakota Leasing, Inc.:

We have audited the accompanying combined balance sheets of GRi of South
Florida, Inc., GRi of Orlando, Inc., GRi of West Florida, Inc. and Dakota
Leasing, Inc., all of which are under common ownership and common management, as
of October 31, 1996 and 1997, and the related combined statements of operations,
stockholder's equity and cash flows for each of the three years in the period
ended October 31, 1997. These financial statements are the responsibility of the
companies' 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, such financial statements present fairly, in all material
respects, the combined financial position of GRi of South Florida, Inc., GRi of
Orlando, Inc., GRi of West Florida, Inc. and Dakota Leasing, Inc. as of October
31, 1996 and 1997, and the combined results of their operations and their
combined cash flows for each of the three years in the period ended October 31,
1997 in conformity with generally accepted accounting principles.

DELOITTE & TOUCHE LLP

Miami, Florida
December 12, 1997,
(January 20, 1998 as to the final paragraph of Note 6)
(February 16, 1998 as to Note 11)

F-16
<PAGE> 98

GENERAL ROOFING INDUSTRIES

COMBINED BALANCE SHEETS

<TABLE>
<CAPTION>
OCTOBER 31,
----------------------- MARCH 31,
1996 1997 1998
---------- ---------- -----------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents................................ $ 106,783 $ 240,679 $ 155,634
Contract receivables, net of an allowance for doubtful
accounts of $7,054, $36,345 and $36,345,
respectively.......................................... 4,580,183 4,011,561 4,924,733
Due from stockholder..................................... 172,317 326,679 332,286
Costs and estimated earnings in excess of billings....... 264,573 428,791 290,957
Inventory................................................ 304,742 320,889 347,285
Other current assets..................................... 51,327 104,645 240,515
---------- ---------- ----------
Total current assets............................. 5,479,925 5,433,244 6,291,410
Property and Equipment -- net.............................. 1,111,263 1,605,369 1,754,506
Deferred Costs............................................. 483,972 1,348,466
---------- ---------- ----------
Total............................................ $6,591,188 $7,522,585 $9,394,382
========== ========== ==========

LIABILITIES AND STOCKHOLDER'S EQUITY
Current Liabilities:
Accounts payable......................................... $2,986,574 $2,693,636 $2,328,722
Accrued workers' compensation............................ 265,000 409,782 354,822
Accrued payroll.......................................... 166,771 266,637 294,898
Other accrued expenses and current liabilities........... 6,113 42,319
Billings in excess of costs and estimated earnings....... 718,171 237,316 493,660
Current portion of long-term debt........................ 157,739 1,227,326 774,270
Current portion of capitalized lease obligations......... 86,627 151,114 157,499
---------- ---------- ----------
Total current liabilities........................ 4,386,995 4,985,811 4,446,190
Long-Term Debt, net of current portion..................... 420,725 485,429 3,245,463
Capitalized Lease Obligations, net of current portion...... 243,895 281,659 274,594
Other Liabilities.......................................... 400,000 200,000 150,000
---------- ---------- ----------
Total............................................ 5,451,615 5,952,899 8,116,247
---------- ---------- ----------
Commitments and Contingencies (Note 11)
Stockholder's Equity:
Common stock............................................. 1,200 1,200 1,200
Additional paid-in capital............................... 572,825 572,825 878,967
Retained earnings........................................ 565,548 995,661 397,968
---------- ---------- ----------
Total............................................ 1,139,573 1,569,686 1,278,135
---------- ---------- ----------
Total............................................ $6,591,188 $7,522,585 $9,394,382
========== ========== ==========
</TABLE>

See notes to combined financial statements.

F-17
<PAGE> 99

GENERAL ROOFING INDUSTRIES

COMBINED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
FIVE MONTHS ENDED
YEAR ENDED OCTOBER 31, MARCH 31,
--------------------------------------- -------------------------
1995 1996 1997 1997 1998
----------- ----------- ----------- ----------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Contract Revenues Earned........ $18,174,012 $24,810,346 $26,792,268 $11,338,671 $10,838,123
Costs of Contract Revenues
Earned........................ 13,559,134 17,258,133 19,100,850 7,737,795 8,015,732
----------- ----------- ----------- ----------- -----------
Gross Profit.................... 4,614,878 7,552,213 7,691,418 3,600,876 2,822,391
Selling, General and
Administrative Expenses....... 4,954,614 6,570,209 6,995,095 2,556,510 3,244,448
----------- ----------- ----------- ----------- -----------
Income (Loss) from Operations... (339,736) 982,004 696,323 1,044,366 (422,057)
Other Income (Expense):
Interest and Other Income..... 26,184 81,216 81,338 69,690 24,280
Interest Expense.............. (99,332) (103,134) (152,548) (54,641) (199,916)
----------- ----------- ----------- ----------- -----------
Net Income (Loss)..... $ (412,884) $ 960,086 $ 625,113 $ 1,059,415 $ (597,693)
=========== =========== =========== =========== ===========
</TABLE>

See notes to combined financial statements.

F-18
<PAGE> 100

GENERAL ROOFING INDUSTRIES

COMBINED STATEMENTS OF STOCKHOLDER'S EQUITY

<TABLE>
<CAPTION>
ADDITIONAL
COMMON PAID-IN RETAINED
STOCK CAPITAL EARNINGS TOTAL
------- ---------- --------- ----------
<S> <C> <C> <C> <C>
BALANCE, OCTOBER 31, 1994........................... $1,200 $197,825 $ 483,949 $ 682,974
Net loss.......................................... (412,884) (412,884)
Contribution from stockholder..................... 175,000 175,000
Distributions to stockholder...................... (175,000) (175,000)
------ -------- --------- ----------
BALANCE, OCTOBER 31, 1995........................... 1,200 372,825 (103,935) 270,090
Net income........................................ 960,086 960,086
Contribution from stockholder..................... 200,000 200,000
Distributions to stockholder...................... (290,603) (290,603)
------ -------- --------- ----------
BALANCE, OCTOBER 31, 1996........................... 1,200 572,825 565,548 1,139,573
Net income........................................ 625,113 625,113
Distributions to stockholder...................... (195,000) (195,000)
------ -------- --------- ----------
BALANCE, OCTOBER 31, 1997........................... 1,200 572,825 995,661 1,569,686
Net loss (unaudited).............................. (597,693) (597,693)
Issuance of warrants (unaudited).................. 306,142 306,142
------ -------- --------- ----------
BALANCE, MARCH 31, 1998 (unaudited)................. $1,200 $878,967 $ 397,968 $1,278,135
====== ======== ========= ==========
</TABLE>

See notes to combined financial statements.

F-19
<PAGE> 101

GENERAL ROOFING INDUSTRIES

COMBINED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
FIVE MONTHS ENDED
YEAR ENDED OCTOBER 31, MARCH 31,
--------------------------------------- ------------------------
1995 1996 1997 1997 1998
----------- ----------- ----------- ---------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Cash Flows from Operating Activities:
Net Income (Loss)........................ $ (412,884) $ 960,086 $ 625,113 $1,059,415 $ (597,693)
Adjustments to Reconcile Net Income
(Loss) to Net Cash Provided (Used) by
Operating Activities:
Depreciation and Amortization.......... 175,356 214,319 380,010 161,357 244,467
Loss (Gain) on Disposal of Assets...... (9,001) 5,747 (23,667) (7,554)
Changes in Operating Assets and
Liabilities:
Contract Receivables, Net............ (452,728) (958,375) 568,622 (265,330) (913,172)
Costs and Estimated Earnings in
Excess of Billings................ (134,699) (38,407) (164,218) 114,771 137,834
Inventory............................ (1,042) (68,576) (16,147) 33,049 (26,396)
Other Current Assets................. 36,752 (49,765) (53,318) (166,166) (135,870)
Accounts Payable..................... 1,025,163 509,524 (292,938) (942,348) (364,914)
Accrued Workers' Compensation,
Payroll and Other................. (119,340) 193,151 238,535 500,326 15,620
Billings in Excess of Costs and
Estimated Earnings................ 93,180 (12,975) (480,855) (204,831) 256,344
Other Liabilities.................... 200,000 (100,000) (200,000) (50,000)
----------- ----------- ----------- ---------- -----------
Net Cash Provided by (Used in)
Operating Activities............ 400,757 654,729 581,137 290,243 (1,441,334)
----------- ----------- ----------- ---------- -----------
Cash Flows from Investing Activities:
Purchases of Property and Equipment...... (49,391) (404,319) (651,248) (436,754) (302,679)
Proceeds from Sale of Property and
Equipment.............................. 145,821 40,000 23,616 34,566
Advances to Stockholder.................. (205,252) (58,613) (154,362) (5,607)
Deferred Costs Incurred.................. (483,972) (808,350)
----------- ----------- ----------- ---------- -----------
Net Cash Used in Investing
Activities...................... (108,822) (462,932) (1,249,582) (413,138) (1,082,070)
----------- ----------- ----------- ---------- -----------
Cash Flows from Financing Activities:
Proceeds From the Issuance of Long-Term
Debt................................... 1,049,287 1,594,597 3,570,043 625,300 5,433,895
Repayment of Long-Term Debt.............. (1,098,897) (1,953,863) (2,435,752) (68,616) (2,926,915)
Principal Payments Under Capital Lease
Obligations............................ (10,857) (68,387) (136,950) (40,760) (68,617)
Contributions from Stockholder........... 175,000 200,000
Distributions to Stockholder............. (175,000) (290,603) (195,000) (88,660)
----------- ----------- ----------- ---------- -----------
Net Cash (Used in) Provided by
Financing Activities............ (60,467) (518,256) 802,341 427,264 2,438,363
----------- ----------- ----------- ---------- -----------
Net Increase (Decrease) in Cash and Cash
Equivalents.............................. 231,468 (326,459) 133,896 304,369 (85,041)
Cash and Cash Equivalents, Beginning of
Period................................... 201,774 433,242 106,783 106,783 240,679
----------- ----------- ----------- ---------- -----------
Cash and Cash Equivalents, End of Period... $ 433,242 $ 106,783 $ 240,679 $ 411,152 $ 155,638
=========== =========== =========== ========== ===========
Supplemental Schedule of Non-Cash Financing
and Investing Activities:
Equipment Acquired Through Capital
Leases, Net of Disposals............... $ 130,289 $ 279,477 $ 239,201 $ 201,218 $ 67,937
=========== =========== =========== ========== ===========
</TABLE>

See notes to combined financial statements.

F-20
<PAGE> 102

GENERAL ROOFING INDUSTRIES

NOTES TO COMBINED FINANCIAL STATEMENTS

1. GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

General -- GRI of South Florida, Inc., GRI of Orlando, Inc., GRI of West
Florida, Inc., and Dakota Leasing, Inc. (collectively referred to herein as
"General Roofing Industries," "GRI" or the "Company"), all of which are S
Corporations wholly-owned by the same stockholder and are under common
management. The Company operates in one segment as a provider of comprehensive
roofing services to commercial, construction and government customers. At the
present time, primarily all of the Company's revenues are generated in Florida.

The capital structure of each entity as of October 31, 1996 and 1997 is as
follows:

<TABLE>
<CAPTION>
ADDITIONAL
COMMON PAID-IN
STOCK CAPITAL
------- ----------
<S> <C> <C>
GRI of South Florida, Inc.
(500 Shares Authorized, 100 Shares
Issued and Outstanding; $1 Par Value)..................... $ 100 $371,925
GRI of Orlando, Inc.
(100 Shares Authorized, Issued
and Outstanding; $1 Par Value)............................ 100 400
GRI of West Florida, Inc.
(500 Shares Authorized, Issued
and Outstanding; $1 Par Value)............................ 500 200,500
Dakota Leasing, Inc.
(500 Shares Authorized, Issued
and Outstanding; $1 Par Value)............................ 500
------ --------
$1,200 $572,825
====== ========
</TABLE>

Principles of Combination -- The combined financial statements include all
of the accounts of GRi of South Florida, Inc., GRI of Orlando, Inc., GRi of West
Florida, Inc. and Dakota Leasing, Inc. All significant intercompany balances and
transactions have been eliminated in combination.

Interim Financial Information -- The interim financial statements and
information as of March 31, 1998 and for the five months ended March 31, 1997
and 1998 are unaudited and certain information and footnote disclosures normally
included in annual financial statements prepared in accordance with generally
accepted accounting principles have been omitted. In the opinion of management
all adjustments, consisting only of normal recurring items, necessary to fairly
present the financial position, results of operations, and cash flows with
respect to the interim financial statements have been included. The results of
operations for the interim period are not necessarily indicative of the results
for an entire fiscal year.

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

Cash and Cash Equivalents -- The Company considers all highly liquid
investments purchased with an original maturity of three months or less to be
cash equivalents.

F-21
<PAGE> 103
GENERAL ROOFING INDUSTRIES

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

ble based on management's best estimates. Recoveries are recognized in the
period they are received. The ultimate amount of contract receivables that
become uncollectible could differ from those estimated.

Credit Policy -- In the normal course of business, the Company provides
credit to its customers and does not generally require collateral. The Company
principally deals with recurring customers, state and local governments and well
known local companies whose reputation is known to the Company. Advance payments
and progress payments are generally required for significant projects. Credit
checks are performed for significant new customers that are not known to the
Company. The Company generally has the ability to file liens against the
property if it is not paid on a timely basis.

Inventories -- Inventories consist primarily of materials and supplies and
are valued at the lower of first-in, first-out cost or market.

<TABLE>
<S> <C>
Service equipment........................................... 5 to 7 years
Capitalized leased equipment................................ 3 to 5 years
Leasehold improvements...................................... 3 to 31 years
Machinery and equipment..................................... 3 to 10 years
Computer equipment.......................................... 5 to 10 years
</TABLE>

Leases that transfer substantially all the benefits and risks of ownership
to the Company are accounted for as an acquisition of assets and incurrence of
obligations. Accordingly, capitalized leased assets are recorded as property and
equipment and the present value of the future minimum lease payments are
recorded as capitalized lease obligations. Amortization of such assets is
computed using the straight-line method over the shorter of the estimated useful
lives of the respective assets or the lease agreement.

Warranties -- The Company provides for future estimated warranty
obligations in the period in which the related revenue is recognized.

Revenue and Cost Recognition -- Revenue from contracts is recognized under
the percentage of completion method measured by the ratio of contract costs
incurred to date to estimated total contract costs.

Contract costs include all direct material and labor costs and those
indirect costs related to contract performance such as indirect labor, supplies,
and tools. Selling, general, and administrative costs are charged to expense as
incurred. Costs for materials incurred at the inception of a project which are
not reflective of effort are excluded from the percentage of completion
calculation for purposes of determining profits earned on uncompleted contracts.

Estimates made with respect to uncompleted projects are subject to change
as the project progresses and better estimates of project costs become
available. Revisions in cost and profit estimates during the course of the work
are reflected in the period in which the facts requiring revision become known.
Where a loss is forecasted for a contract, the full amount of the anticipated
loss is recognized in the period in which it is determined that a loss will
occur, regardless of the stage of completion.

The asset, "Costs and estimated earnings in excess of billings" on
uncompleted contracts, represents revenue recognized in excess of amounts
billed. The liability, "Billings in excess of costs and estimated earnings" on
uncompleted contracts, represents billings in excess of revenues recognized.

F-22
<PAGE> 104
GENERAL ROOFING INDUSTRIES

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

Deferred Costs -- Included in deferred costs are certain costs incurred in
connection with the Company's proposed mergers and acquisitions described in
Note 13 and certain costs incurred in connection with obtaining related debt or
equity financing. The deferred acquisition costs will become part of the
Company's basis of the acquired businesses and the deferred financing and
offering costs will be either amortized as interest expense over the term of
debt instruments or charged as a cost of raising capital as appropriate. Should
the transactions not be consummated, the amounts will be charged to operations.

Income Taxes -- The Company is an S Corporation for federal income tax
purposes. As such, the income tax effects of the results of operations of the
Company accrue directly to the Shareholder. Accordingly, the accompanying
combined balance sheets do not include a provision for income taxes.

Long-Lived Assets -- In March 1995, the Financial Accounting Standards
Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No.
121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed of ("SFAS No. 121"). This statement establishes accounting
standards for the impairment of long-lived assets, certain identifiable
intangibles and goodwill related to those assets to be held and used and for
long-lived assets and certain identifiable intangibles to be disposed of. SFAS
No. 121 requires that long-lived assets to be held and used by the Company be
reviewed for impairment whenever events or circumstances indicate that the
carrying amount of an asset may not be recoverable. An impairment is recognized
to the extent that the sum of undiscounted estimated future cash flows expected
to result from the assets used is less than the carrying value. The Company has
evaluated its asset base, and determined that no impairment was required.

Stock Options -- Statement of Financial Accounting Standards ("SFAS") No.
123, "Accounting for Stock Based Compensation" encourages but does not require
companies to record compensation cost for stock based compensation plans at fair
value. The Company has chosen to account for stock based compensation using the
intrinsic value method prescribed in Accounting Principles Board ("APB") Opinion
No. 25, "Accounting for Stock Issued to Employees," and related interpretations.
Accordingly, compensation cost for stock options is measured based on the
excess, if any, of the fair value of the Company's stock at the date of the
grant over the exercise price of the option.

New Accounting Pronouncement -- In June 1997, SFAS No. 130, Reporting
Comprehensive Income, was issued. SFAS No. 130 establishes standards for
reporting and display of comprehensive income and its components (revenues,
expenses, gains and losses) in a full set of general-purpose financial
statements. SFAS No. 130 requires that all items that are required to be
recognized under accounting standards as components of comprehensive income be
reported in a financial statement that is displayed with the same prominence as
other financial statements. SFAS No. 130 requires that a company (a) classify
items of other comprehensive income by their nature in a financial statement and
(b) display the accumulated balance of other comprehensive income separately
from retained earnings and additional paid-in capital in the equity section of
the balance sheet. SFAS No. 130 is effective for fiscal years beginning after
December 15, 1997. Reclassification of financial statements for earlier periods
provided for comparative purposes is required. The Company has not determined
the effects, if any, that SFAS No. 130 will have on its combined financial
statements.

F-23
<PAGE> 105
GENERAL ROOFING INDUSTRIES

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

2. CONTRACT RECEIVABLES

Contract receivables consisted of the following as of October 31, 1996 and
1997:

<TABLE>
<CAPTION>
OCTOBER 31,
-----------------------
1996 1997
---------- ----------
<S> <C> <C>
Completed contracts:
Current accounts.......................................... $1,273,283 $1,806,993
Retention................................................. 563,481 418,943
---------- ----------
Subtotal.......................................... 1,836,764 2,225,936
---------- ----------
Contracts in progress:
Current accounts.......................................... 2,440,096 1,579,273
Retention................................................. 310,377 242,697
---------- ----------
Subtotal.......................................... 2,750,473 1,821,970
---------- ----------
4,587,237 4,047,906
Less: allowance for doubtful accounts....................... (7,054) (36,345)
---------- ----------
Contract receivables, net......................... $4,580,183 $4,011,561
========== ==========
</TABLE>

3. PROPERTY AND EQUIPMENT

Property and equipment consist of the following as of October 31, 1996 and
1997:

<TABLE>
<CAPTION>
OCTOBER 31,
-----------------------
1996 1997
---------- ----------
<S> <C> <C>
Service equipment........................................... $ 543,753 $ 826,809
Capitalized leased equipment................................ 409,766 648,967
Leasehold improvements...................................... 249,164 251,227
Machinery and equipment..................................... 295,946 459,057
Computer equipment.......................................... 96,341 279,360
---------- ----------
Subtotal.......................................... 1,594,970 2,465,420
Less accumulated depreciation (including $68,387 and
$122,599 on capital leased equipment)..................... (483,707) (860,051)
---------- ----------
Property and equipment, net................................. $1,111,263 $1,605,369
========== ==========
</TABLE>

4. CONTRACTS IN PROGRESS

Information relative to contracts in progress is summarized as follows:

<TABLE>
<CAPTION>
OCTOBER 31,
-----------------------
1996 1997
---------- ----------
<S> <C> <C>
Costs incurred on uncompleted contracts..................... $6,458,979 $5,211,664
Estimated earnings.......................................... 2,178,635 1,259,043
---------- ----------
Total............................................. 8,637,614 6,470,707
Less billings to date....................................... 9,091,212 6,279,232
---------- ----------
Net (over) under billings......................... $ (453,598) $ 191,475
========== ==========
</TABLE>

F-24
<PAGE> 106
GENERAL ROOFING INDUSTRIES

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

Included in the accompanying balance sheets under the following captions:

<TABLE>
<CAPTION>
OCTOBER 31,
--------------------
1996 1997
--------- --------
<S> <C> <C>
Costs and estimated earnings in excess of billings.......... $ 264,573 $428,791
Billings in excess of costs and estimated earnings.......... 718,171 237,316
--------- --------
Total............................................. $(453,598) $191,475
========= ========
</TABLE>

5. CAPITALIZED LEASE OBLIGATIONS

The Company has entered into lease arrangements which expire through the
year 2002 and accrue interest on a monthly basis using a variable rate of
interest which is based on the prime interest rate for certain vehicles (see
Note 3). Such arrangements transfer to the Company substantially all of the
risks and benefits of ownership of the related assets. The assets have been
capitalized and the obligations have been recorded as capitalized lease
obligations. As of October 31, 1997, approximate future minimum lease payments
(excluding interest) under capitalized lease obligations were as follows for the
year ended October 31:

<TABLE>
<S> <C>
1998........................................................ $ 151,114
1999........................................................ 150,740
2000........................................................ 90,455
2001........................................................ 37,640
2002........................................................ 2,824
---------
Present value of net future minimum lease payments.......... 432,773
Less current portion of capitalized lease obligations....... (151,114)
---------
Long-term portion of capitalized lease obligations.......... $ 281,659
=========
</TABLE>

6. LONG-TERM DEBT

A summary of long-term debt is as follows:

<TABLE>
<CAPTION>
1996 1997
-------- -----------
<S> <C> <C>
Note payable due on April 21, 2000, bearing interest at a
variable rate based on the lender's index rate (9.5% and
9% at October 31, 1996 and 1997, respectively). Note is
payable in monthly payments of $10,537 of principal and
interest. Secured by contract receivables and equipment... $374,403 $ 275,983
Various loans payable due through the year 2001, bearing
interest rates ranging from 9.0% to 9.75%. Secured by
service and other equipment............................... 204,061 440,786
Revolving credit lines due on demand, bearing interest at a
variable rate based on the lender's index rate (9% at
October 31, 1997). Secured by contract receivables and
equipment................................................. 995,986
-------- -----------
Total............................................. 578,464 1,712,755
Less current portion........................................ (157,739) (1,227,326)
-------- -----------
Total long term portion........................... $420,725 $ 485,429
======== ===========
</TABLE>

F-25
<PAGE> 107
GENERAL ROOFING INDUSTRIES

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

Maturities of long-term debt are as follows at October 31, 1997:

<TABLE>
<S> <C>
1998........................................................ $1,227,326
1999........................................................ 258,646
2000........................................................ 198,785
2001........................................................ 27,998
----------
Total............................................. $1,712,755
==========
</TABLE>

On January 20, 1998, the Company obtained a subordinated loan in the amount
of $3 million. Proceeds from the loan are to be used for general working capital
needs and to complete the transactions described in Note 12. The subordinated
loan is payable on or before January 20, 2003 with interest payable monthly at
the rate of 13% per year. In accordance with the terms of the subordinated loan,
the Company issued warrants at fair value which are convertible at a nominal
amount into an initial 3.183% of the Company's fully diluted ownership with
annual increases of 2%, as the loan remains outstanding, up to an aggregate of
10.75% of the Company's fully diluted ownership. The loan is subordinate to
other bank financing and is secured by a second lien on the assets of the
Company. The balance due under the subordinated loan at March 31, 1998 amounted
to $3 million.

7. FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company's financial instruments consist of cash and cash equivalents,
contract receivables, accounts and notes payable, debt and capitalized lease
obligations. The carrying value of these financial instruments approximates fair
value because of their short duration or current interest rates. The Company
places its temporary cash investments with financial institutions and limits the
amount of credit exposure with any one financial institution. The carrying value
of debt and capitalized lease obligations approximates their fair value based on
current rates for borrowings of similar quality and terms.

Other financial instruments which potentially subject the Company to
significant concentrations of credit risk consist primarily of contract
receivables. The Company's customers are concentrated in the Florida market. The
Company believes this concentration of credit risk is mitigated by the diversity
of industries represented by the Company's customer base.

8. 401(K) PROFIT SHARING PLAN

The Company has a 401(k) profit sharing plan covering substantially all
employees. Each year, participants may contribute up to 15% of pretax annual
compensation, not to exceed $9,500, as defined in the plan. The Company shall
contribute and allocate to each participant's account an amount equal to the
amount withheld from the compensation of such participant pursuant to his or her
salary savings agreement. Discretionary matching amounts may be contributed at
the Company's option, not to exceed 6% of the participant's compensation. During
the year ended October 31, 1997, the Company contributed $22,763. No amounts
were contributed by the Company during the year ended October 31, 1996.

F-26
<PAGE> 108
GENERAL ROOFING INDUSTRIES

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

9. RELATED PARTY TRANSACTIONS

The Company has entered into long-term lease arrangements (expiring through
2004) with entities controlled by and related to the Company's stockholder. The
following are the Company's commitments with respect to these leases:

<TABLE>
<CAPTION>
FISCAL YEAR
ENDED
OCTOBER 31,
-----------
<S> <C>
1998........................................................ $ 293,548
1999........................................................ 314,319
2000........................................................ 334,495
2001........................................................ 201,151
2002........................................................ 120,964
2003 and thereafter......................................... 335,249
----------
Total............................................. $1,599,726
==========
</TABLE>

Rent expense related to these arrangements were $216,756, $219,509 and
$261,091 during the years ended October 31, 1995, 1996 and 1997, respectively.

In addition, the Company has entered into a long-term consulting agreement
(expiring through 2003) with a party related to the Company's stockholder. The
following are the Company's commitments with respect to this agreement.

<TABLE>
<CAPTION>
FISCAL YEAR
ENDED
OCTOBER 31,
------------
<S> <C>
1998........................................................ $ 97,024
1999........................................................ 91,256
2000........................................................ 85,487
2001........................................................ 79,718
2002........................................................ 73,950
2003 and thereafter......................................... 78,984
--------
Total............................................. $506,419
========
</TABLE>

The Company paid consulting fees related to this arrangement of $54,187,
$75,633 and $126,715 during the years ended October 31, 1995, 1996 and 1997,
respectively.

10. COMMITMENTS AND CONTINGENCIES

The Company is party to various litigation matters involving routine claims
incidental to the business of the Company. Although the ultimate outcome cannot
presently be determined with certainty, the Company believes, with advice from
its legal counsel, that the ultimate liability associated with such claims, if
any, will not have a material adverse effect on the Company's financial position
or results of operations.

11. STOCK OPTIONS

The Company issued options to purchase an aggregate of approximately 10.5%
of the Company's outstanding common stock to certain key employees. The options
were issued on February 16, 1998 at an aggregate exercise price of approximately
$1.4 million. Based in part on the results of an independent appraisal, the
Company's management believes such exercise price to approximate the fair value
on the date of grant of the shares issuable upon exercise of the options.

F-27
<PAGE> 109
GENERAL ROOFING INDUSTRIES

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

12. SUBSEQUENT EVENT

The Company expects to sign a stock purchase agreement with General Roofing
Services, Inc. ("GRS"). GRS is a newly-formed holding company and is presently
wholly-owned by the Company's shareholder. Therefore the acquisition of the
Company will be accounted for as a reorganization of entities under common
control which is similar to a pooling of interests business combination. GRS
plans to acquire a number of unrelated commercial roofing companies and complete
an initial public offering of a portion of its shares of common stock to effect
these acquisitions. GRS is dependent upon the initial public offering to execute
the acquisitions and the Company will be reflected as the accounting acquirer
for financial reporting purposes.

* * * * * *

F-28
<PAGE> 110

INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholders of
CEI Roofing, Inc., CEI Florida, Inc. and CEI West Roofing Company, Inc.:

We have audited the accompanying combined balance sheets of CEI Roofing,
Inc., CEI Florida, Inc. and CEI West Roofing Company, Inc. (collectively, the
Companies) as of December 31, 1996 and 1997, and the related combined statements
of income, changes in stockholders' equity and cash flows for each of the three
years in the period ended December 31, 1997. These combined financial statements
are the responsibility of the Companies' management. Our responsibility is to
express an opinion on these combined 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 combined financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the combined 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 our audits provide a reasonable basis for our
opinion.

In our opinion, based on our audits the combined financial statements
referred to above present fairly, in all material respects, the combined
financial position of CEI Roofing, Inc., CEI Florida, Inc. and CEI West Roofing
Company, Inc. as of December 31, 1996 and 1997, and the results of their
combined operations and cash flows for each of the three years in the period
ended December 31, 1997, in conformity with generally accepted accounting
principles.

BELEW AVERITT LLP

Dallas, Texas
February 18, 1998, except for
Note 13, as to which the date
is May 13, 1998

F-29
<PAGE> 111

CEI ROOFING, INC., CEI FLORIDA, INC. AND
CEI WEST ROOFING COMPANY, INC.

COMBINED BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 31,
------------------------- MARCH 31,
1996 1997 1998
----------- ----------- ------------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
CURRENT ASSETS
Cash................................................. $ 617,173 $ 539,852 $ 293,589
Accounts receivable (Notes 4 and 5):
Contract billings.................................... 5,252,952 5,934,232 5,376,629
Contract retainage................................... 2,114,346 2,751,702 2,852,934
Other................................................ 36,656 34,333 91,832
----------- ----------- ------------
7,403,954 8,720,267 8,321,395
Costs and estimated earnings in excess of billings on
uncompleted contracts (Note 2).................... 748,584 791,908 1,227,407
Inventory (Notes 4 and 5)............................ 686,955 521,629 370,656
Prepaid expenses and other current assets............ 118,464 137,206 76,619
----------- ----------- ------------
Total current assets......................... 9,575,130 10,710,862 10,289,666
PROPERTY AND EQUIPMENT, at cost, net of accumulated
depreciation and amortization
(Notes 3, 4 and 5)................................... 1,922,458 2,054,701 2,008,508
OTHER ASSETS........................................... 395,559 429,124 419,475
----------- ----------- ------------
$11,893,147 $13,194,687 $ 12,717,649
=========== =========== ============

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Lines-of-credit (Note 4)............................. $ 80,000 $ 300,000 $ 327,615
Accounts payable, trade.............................. 3,241,044 4,209,856 4,560,085
Accrued payroll...................................... 474,551 433,881 245,732
Accrued insurance.................................... 502,420 157,495 151,615
Other accrued liabilities............................ 73,691 144,888 166,333
Distributions payable (Note 6)....................... 328,126 797,651 434,482
Billings in excess of costs and estimated earnings on
uncompleted contracts (Note 2).................... 1,333,731 1,010,559 744,478
Current portion of long-term (Note 5)................ 395,079 399,393 387,040
----------- ----------- ------------
Total current liabilities.................... 6,428,642 7,453,723 7,017,380
LONG-TERM DEBT, net of current portion (Note 5)........ 520,519 535,474 433,424
COMMITMENTS AND CONTINGENCIES
(Notes 8 and 9)...................................... -- -- --
STOCKHOLDERS' EQUITY (Notes 9 and 10)
Common stock, voting................................. 3,315 3,315 3,315
Common stock, nonvoting.............................. 331,346 331,346 331,346
Paid-in capital...................................... 84,499 84,499 84,499
Retained earnings.................................... 4,524,826 4,786,330 4,847,685
----------- ----------- ------------
Total stockholders' equity................... 4,943,986 5,205,490 5,266,845
----------- ----------- ------------
$11,893,147 $13,194,687 $ 12,717,649
=========== =========== ============
</TABLE>

See accompanying notes to combined financial statements.

F-30
<PAGE> 112

CEI ROOFING, INC., CEI FLORIDA, INC. AND
CEI WEST ROOFING COMPANY, INC.

COMBINED STATEMENTS OF INCOME

See accompanying notes to combined financial statements.

F-31
<PAGE> 113

CEI ROOFING, INC., CEI FLORIDA, INC. AND
CEI WEST ROOFING COMPANY, INC.

COMBINED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
COMMON STOCK
-----------------------------------------
OUTSTANDING SHARES AMOUNT ADDITIONAL
------------------- ------------------- PAID-IN RETAINED
VOTING NON-VOTING VOTING NON-VOTING CAPITAL EARNINGS TOTAL
------ ---------- ------ ---------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE AT DECEMBER 31, 1994... 3,315 338,416 $3,315 $338,416 $84,499 $ 3,372,963 $ 3,799,193
Stock Redemption (Note
9)....................... -- (7,070) -- (7,070) -- (269,734) (276,804)
Distributions.............. -- -- -- -- -- (640,500) (640,500)
Net income................. -- -- -- -- -- 1,284,441 1,284,441
----- ------- ------ -------- ------- ----------- -----------
BALANCE AT DECEMBER 31, 1995... 3,315 331,346 3,315 331,346 84,499 3,747,170 4,166,330
Distributions.............. -- -- -- -- -- (1,178,067) (1,178,067)
Net income................. -- -- -- -- -- 1,955,723 1,955,723
----- ------- ------ -------- ------- ----------- -----------
BALANCE AT DECEMBER 31, 1996... 3,315 331,346 3,315 331,346 84,499 4,524,826 4,943,986
Distributions.............. -- -- -- -- -- (1,964,405) (1,964,405)
Net income................. -- -- -- -- -- 2,225,909 2,225,909
----- ------- ------ -------- ------- ----------- -----------
BALANCE AT DECEMBER 31, 1997... 3,315 331,346 3,315 331,346 84,499 4,786,330 5,205,490
Distributions(Unaudited)... -- -- -- -- -- (65,027) (65,027)
Net income (Unaudited)..... -- -- -- -- -- 126,382 126,382
----- ------- ------ -------- ------- ----------- -----------
BALANCE AT MARCH 31, 1998...... 3,315 331,346 $3,315 $331,346 $84,499 $ 4,847,685 $ 5,266,845
===== ======= ====== ======== ======= =========== ===========
</TABLE>

See accompanying notes to combined financial statements.

F-32
<PAGE> 114

CEI ROOFING, INC., CEI FLORIDA, INC. AND
CEI WEST ROOFING COMPANY, INC.

COMBINED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
--------------------------------------- -------------------------
1995 1996 1997 1997 1998
----------- ----------- ----------- ----------- -----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss).......................... $ 1,284,441 $ 1,955,723 $ 2,225,909 $ (28,390) $ 126,382
Adjustments to reconcile net income (loss)
to net cash provided by operating
activities:
Depreciation and amortization............ 436,366 432,447 486,063 105,431 107,945
(Gain) loss on sale of assets............ 6,772 (3,388) (18,109) 2,493 1,254
Net (increase) decrease in:
Contract billings and retainage........ 931,198 (925,593) (1,318,636) (44,013) 456,371
Accounts receivable, other............. 132,273 13,875 2,323 (30,114) (57,499)
Costs and estimated earnings in excess
of billings on uncompleted
contracts........................... 375,350 (314,971) (43,324) (178,636) (435,499)
Inventory.............................. (129,183) (143,762) 165,326 240,592 150,973
Prepaid expenses and other current
assets.............................. 55,230 (30,321) (18,742) 107,081 60,587
Net increase (decrease) in:
Accounts payable and accrued
liabilities......................... (538,015) (465,727) 654,414 215,363 177,645
Billings in excess of costs and
estimated earnings on uncompleted
contracts........................... 117,597 579,270 (323,172) (87,707) (266,081)
----------- ----------- ----------- --------- ---------
Net cash provided by operating
activities........................ 2,672,029 1,097,553 1,812,052 302,100 322,078
CASH FLOWS FROM INVESTING ACTIVITIES
Increase in other assets................... (53,554) (51,661) (33,565) (7,927) 9,649
Proceeds from sale of equipment............ 44,350 18,343 49,717 -- --
Purchases of property and equipment........ (314,790) (338,565) (390,090) (93,128) (63,006)
----------- ----------- ----------- --------- ---------
Net cash used in investing
activities........................ (323,994) (371,883) (373,938) (101,055) (53,357)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from lines-of-credit and long-term
debt..................................... 217,709 426,852 1,202,665 464,381 596,878
Payments on lines-of-credit................ (366,700) -- -- (265,000) (635,000)
Principal payments on long-term debt....... (720,028) (576,152) (1,223,220) (61,009) (48,666)
Distributions paid......................... (590,607) (1,069,541) (1,494,880) (458,545) (428,196)
Redemption of stock........................ (100,000) -- -- -- --
----------- ----------- ----------- --------- ---------
Net cash used in financing
activities........................ (1,559,626) (1,218,841) (1,515,435) (320,173) (514,984)
----------- ----------- ----------- --------- ---------
NET INCREASE (DECREASE) IN CASH..... 788,409 (493,171) (77,321) (119,128) (246,263)
CASH AT BEGINNING OF YEAR.................... 321,935 1,110,344 617,173 617,173 539,852
----------- ----------- ----------- --------- ---------
CASH AT END OF YEAR.......................... $ 1,110,344 $ 617,173 $ 539,852 $ 498,045 $ 293,589
=========== =========== =========== ========= =========
SUPPLEMENTAL CASH FLOW INFORMATION
Interest paid.............................. $ 110,223 $ 91,842 $ 141,126 $ 24,341 $ 66,421
=========== =========== =========== ========= =========
State income taxes paid.................... $ 38,281 $ 25,142 $ 18,892 $ -- $ --
=========== =========== =========== ========= =========
SUMMARY OF NON-CASH TRANSACTIONS
Redemption of stock:
For note payable......................... $ 165,000 $ -- $ -- $ -- $ --
=========== =========== =========== ========= =========
For insurance policy..................... $ 11,804 $ -- $ -- $ -- $ --
=========== =========== =========== ========= =========
Financed equipment purchases................. $ 221,708 $ 166,443 $ 259,824 $ -- $ --
=========== =========== =========== ========= =========
</TABLE>

See accompanying notes to combined financial statements.

F-33
<PAGE> 115

CEI ROOFING, INC., CEI FLORIDA, INC. AND
CEI WEST ROOFING COMPANY, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS

1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION

CEI Roofing, Inc. (CEI), was incorporated in Texas on May 14, 1981, and
operates as a roofing and sheet metal contractor engaged in the installation of
new roofs and reroofing of existing commercial, industrial and residential
buildings. CEI has offices in Dallas, Texas and Howell, Michigan.

CEI Florida, Inc. (Florida), was incorporated in Florida on May 10, 1982,
and operates as a roofing contractor engaged in the installation of new roofs
and reroofing of existing commercial, industrial and residential buildings,
primarily in the southern United States. Florida has an office located in
DeBary, Florida.

CEI West Roofing Company, Inc. (West), was incorporated in Colorado on
August 24, 1977, and operates as a roofing contractor engaged in the
installation of new roofs and reroofing of existing commercial, industrial and
residential buildings, primarily in the western United States. West has offices
located in Denver, Colorado and Sacramento, California.

COMBINATION POLICY

The accompanying combined financial statements include the accounts of CEI
Roofing, Inc., CEI Florida, Inc. and CEI West Roofing Company, Inc.
(collectively, the Companies), all of which have some common ownership. All
significant intercompany transactions and balances have been eliminated in
combination.

INTERIM FINANCIAL INFORMATION

The interim financial statements, as of March 31, 1998 and for the three
months ended March 31, 1997 and 1998, are unaudited and certain information and
footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been omitted. In
the opinion of management, all adjustments, consisting only of normal recurring
items, necessary to fairly present the financial position, results of operations
and cash flows with respect to the interim financial statements have been
included. The results of operations for the interim periods are not necessarily
indicative of the results for an entire fiscal year.

ACCOUNTING ESTIMATES

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

CASH AND CASH EQUIVALENTS

The Companies consider all highly liquid investments with maturities of
three months or less when purchased to be cash equivalents.

INVENTORY

Inventory of construction materials is carried at the lower of cost or
market value under the first-in, first-out method.

F-34
<PAGE> 116
CEI ROOFING, INC., CEI FLORIDA, INC. AND
CEI WEST ROOFING COMPANY, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

PROPERTY AND EQUIPMENT

Property and equipment are depreciated using the straight-line and
accelerated methods for financial statement purposes and accelerated methods for
Federal income tax purposes over estimated useful lives ranging from 3 to 39
years.

Maintenance and repairs of a routine nature are expensed as incurred.
Renewals and betterments, which substantially extend the useful life of an
existing asset, are capitalized and depreciated over the asset's estimated
useful life.

RECOGNITION OF CONTRACT REVENUE

Generally, the work performed by CEI, Florida and West is done so under
fixed-price contracts of durations less than one year.

Contract revenue is recognized using the percentage-of-completion method.
Under this method, the percentage of contract revenue to be recognized currently
is computed as the percentage of estimated total revenue that incurred costs to
date bear to total estimated costs, after giving effect to the most recent
estimate of costs to complete.

Revisions in costs and revenue estimates are reflected in the period in
which the facts requiring revision become known. When revised cost estimates
indicate a loss on an individual contract, the total estimated loss is provided
for currently without regard to the percentage-of-completion. Revenues
recognized in excess of amounts billed are classified under current assets as
costs and estimated earnings in excess of billings on uncompleted contracts.
Amounts billed in excess of revenue recognized to date on contracts are
classified under current liabilities as contract billings in excess of costs and
estimated earnings on uncompleted contracts.

CONCENTRATIONS OF CREDIT RISK

Financial instruments, which potentially subject the Companies to
concentrations of credit risk, consist principally of cash, contract billings
and retainage. The Companies deposit cash with reliable financial institutions
which management considers to be of high credit quality. Concentration of credit
risk with respect to contract billings and retainage is limited due to the large
number of customers comprising the Companies' customer bases. In addition, the
Companies review a customer's credit history before extending credit and
generally obtain liens to ensure payment. Management of the Companies does not
anticipate significant credit losses from such financial instruments.

ADVERTISING

The Companies expense the costs of advertising as the costs are incurred.
Advertising expense was approximately $50,300, $74,200 and $62,000 for the years
ended December 31, 1995, 1996 and 1997, respectively.

F-35
<PAGE> 117
CEI ROOFING, INC., CEI FLORIDA, INC. AND
CEI WEST ROOFING COMPANY, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

2. CONTRACTS IN PROGRESS

Costs and estimated earnings on uncompleted contracts at December 31, 1996
and 1997 are summarized as follows:

<TABLE>
<CAPTION>
1996 1997
------------ ------------
<S> <C> <C>
Costs incurred on uncompleted contracts................... $ 20,780,460 $ 24,133,642
Estimated earnings........................................ 4,710,518 6,416,367
------------ ------------
25,490,978 30,550,009
Less billings to date..................................... (26,076,125) (30,768,660)
------------ ------------
$ (585,147) $ (218,651)
============ ============
</TABLE>

Included in the accompanying balance sheets at December 31, 1996 and 1997
are the following captions and amounts:

<TABLE>
<CAPTION>
1996 1997
----------- -----------
<S> <C> <C>
Costs and estimated earnings in excess of billings on
uncompleted contracts..................................... $ 748,584 $ 791,908
Billings in excess of costs and estimated earnings on
uncompleted contracts..................................... (1,333,731) (1,010,559)
----------- -----------
$ (585,147) $ (218,651)
=========== ===========
</TABLE>

The Companies' backlog of signed contracts at December 31, 1996 and 1997,
amounted to $12,205,250 and $11,414,215, respectively, which represented work
not yet commenced and uncompleted construction in progress.

3. PROPERTY AND EQUIPMENT

Property and equipment consisted of the following at December 31, 1996 and
1997:

<TABLE>
<CAPTION>
1996 1997
----------- -----------
<S> <C> <C>
Leasehold improvements...................................... $ 308,758 $ 368,620
Building and improvements................................... 437,019 439,268
Land........................................................ 141,724 141,724
Land improvements........................................... 87,749 89,048
Equipment................................................... 1,540,200 1,409,748
Autos and trucks............................................ 2,651,253 2,884,473
Furniture and fixtures...................................... 810,842 708,158
----------- -----------
5,977,545 6,041,039
Less accumulated depreciation and amortization.............. (4,055,087) (3,986,338)
----------- -----------
$ 1,922,458 $ 2,054,701
=========== ===========
</TABLE>

4. LINES-OF-CREDIT

The Companies have various lines-of-credit which allow for combined
borrowings, at December 31, 1997, of up to $1,325,000 with interest at the
bank's prime rate plus 1%. The lines-of-credit are collateralized by accounts
receivable, inventory, property and equipment, and limited personal guarantees
of certain stockholders. The lines-of-credit mature during the first six months
of 1998. At December 31, 1996 and 1997, the Companies had been advanced $80,000
and $300,000, respectively, under the lines-of-credit. The bank's prime rate at
December 31, 1996 and 1997 was 8.25% and 8.5%, respectively. The Companies had
$845,000 and $1,025,000 available under the lines-of-credit at December 31, 1996
and 1997, respectively.

F-36
<PAGE> 118
CEI ROOFING, INC., CEI FLORIDA, INC. AND
CEI WEST ROOFING COMPANY, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

5. LONG-TERM DEBT

Long-term debt at December 31, 1996 and 1997 consisted of the following:

<TABLE>
<CAPTION>
1996 1997
-------- ---------
<S> <C> <C>
Equipment loans, due in monthly installments ranging from
$293 to $2,479 including interest at rates ranging from
2.9% to 12.5%, maturing on various dates through May 2002;
collateralized by equipment and vehicles.................. $568,000 $ 643,106
Mortgage note payable, due in monthly installments of
$1,600, including interest at 8.75%, with a balloon
payment due at maturity in June 1999; collateralized by
real property............................................. 146,102 139,144
Note payable to former stockholder, payable in five annual
installments of $33,000, plus interest at 6.0%, commencing
June 1996 (see Note 9).................................... 132,000 99,000
Notes payable, due in monthly installments ranging from
$1,308 to $12,349, including interest at 7.5%, unsecured,
paid-in full subsequent to December 31, 1997.............. 50,097 50,075
Note payable to bank, due on demand, but if no demand is
made, then due in monthly installments of $2,500, plus
interest at the bank's base lending rate plus 2% (10.5% at
December 31, 1997), maturing in October 1998;
collateralized by inventory, equipment and accounts
receivable................................................ 7,369 3,542
Note payable to insurance company, due in monthly
installments of $1,135, non-interest bearing and
unsecured, paid-in full subsequent to December 31, 1996... 3,987 --
Notes payable to stockholder, due in monthly installments of
$410 to $759, including interest at 7.0%, maturing in
December 1997, collateralized by insurance policy......... 8,043 --
-------- ---------
915,598 934,867
Less current portion...................................... (395,079) (399,393)
-------- ---------
$520,519 $ 535,474
======== =========
</TABLE>

Scheduled maturities of long-term debt as of December 31, 1997 were as
follows:

<TABLE>
<CAPTION>
YEAR ENDING DECEMBER 31,
- ------------------------
<S> <C>
1998................................................. $399,393
1999................................................. 340,880
2000................................................. 134,188
2001................................................. 48,303
2002................................................. 12,103
--------
$934,867
========
</TABLE>

6. DISTRIBUTIONS TO STOCKHOLDERS

The Companies' declared distributions to stockholders of $1,178,067 and
$1,964,405 during 1996 and 1997, respectively, of which $328,126 and $797,651
were payable at December 31, 1996 and 1997, respectively.

F-37
<PAGE> 119
CEI ROOFING, INC., CEI FLORIDA, INC. AND
CEI WEST ROOFING COMPANY, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

7. INCOME TAXES

The Companies have elected S Corporation status and as a result, the
Companies' taxable income is included in the Federal income tax returns of the
stockholders. Accordingly, no provision has been made for Federal income taxes.

The Companies are obligated to pay state income taxes to certain states in
which they do business. Provisions for state income taxes are computed at
statutory rates for each state in which a return is filed.

8. COMMITMENTS AND CONTINGENCIES

The Companies lease office space and operating equipment under agreements
which are accounted for as operating leases. The leases require monthly payments
ranging from approximately $43 to $4,700 and expire on various dates through
December 2002.

Approximate minimum rental commitments for operating leases in effect at
December 31, 1997, with initial or remaining lease terms in excess of one year,
were as follows:

<TABLE>
<CAPTION>
YEAR ENDING DECEMBER 31,
- ------------------------
<S> <C>
1998................................................. $346,014
1999................................................. 315,153
2000................................................. 160,612
2001................................................. 99,132
2002................................................. 70,512
--------
$991,423
========
</TABLE>

Rent expense for office facilities and operating equipment for the years
ended December 31, 1995, 1996 and 1997 was approximately $411,991, $438,439 and
$499,115, respectively.

CEI has guaranteed two bank loans of a partnership owned by the
stockholders of CEI. The loans are due in monthly installments of approximately
$8,200, but vary based upon the prime rate. The remaining principal and interest
are due at maturity in September 1998 and July 2002. CEI was contingently liable
for $501,013 as guarantor of the indebtedness at December 31, 1997. The loans
are collateralized by real estate.

Approximately 12% of CEI's non-management employees are covered by
collective bargaining agreements, which expire within the next year. If CEI and
the unions representing such workers are unable to agree on a new contract prior
to the expiration of the current contract, a work stoppage may occur which could
adversely affect the results of operations. Management anticipates successful
renegotiations of the contracts.

9. STOCK PURCHASE AND OTHER AGREEMENTS

The individual companies have agreements with the stockholders to provide
for the acquisition of stock in the event of the death, disability or withdrawal
of a stockholder. The Companies have obtained life insurance to fund all or part
of the redemption. The purchase price of the stock is to be determined by the
net book value of the individual companies at a designated date.

Effective May 1, 1995, West agreed to purchase all of the non-voting common
stock (7,070 shares) held by a stockholder for $276,804. The redemption of the
stock was paid by the transfer of a life insurance policy with a value of
$11,804, cash payments in 1995 totaling $100,000 and the issuance of a
promissory note for $165,000 (see Note 5).

The Companies have consulting and non-compete agreements with a former
stockholder. Terms of the agreements call for monthly payments of $6,400 through
December 1999 for specific services to be performed.

F-38
<PAGE> 120
CEI ROOFING, INC., CEI FLORIDA, INC. AND
CEI WEST ROOFING COMPANY, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

10. COMMON STOCK

Common stock of the Companies consisted of the following:

<TABLE>
<S> <C>
CEI:
Common Stock -- Voting............... $1 par value, 10,000 shares
authorized; 750 shares issued and
outstanding.
Common Stock -- Nonvoting............ $1 par value; 150,000 shares
authorized; 132,416 shares issued and
outstanding.
FLORIDA:
Common Stock -- Voting............... $1 par value; 10,000 shares
authorized; 2,250 shares issued and
outstanding.
Common Stock -- Nonvoting............ $1 par value; 250,000 shares
authorized; 174,500 shares issued and
outstanding.
WEST:
Common Stock -- Voting............... $1 par value; 10,000 shares
authorized; 315 shares issued and
outstanding.
Common Stock -- Nonvoting............ $1 par value; 50,000 shares
authorized; 24,430 shares issued and
outstanding.
</TABLE>

11. RELATED PARTY TRANSACTIONS

CEI and Florida lease office space from two different partnerships owned by
stockholders of CEI and Florida, respectively. The lease agreements require
combined monthly payments of approximately $14,000 through June 2000. Total rent
paid to the related partnerships for the years ended December 31, 1995, 1996 and
1997 was $152,524, $148,599 and $164,199, respectively.

The Companies use numerous labor and material subcontractors on an ongoing
basis, as needed. Two such labor providers are companies owned by trusts whose
beneficiaries are children of one of the company's stockholders. Amounts paid to
the related company during 1995, 1996 and 1997 were approximately $3,140,000,
$3,681,000 and $4,388,000, respectively.

12. EMPLOYEE BENEFIT PLANS

The Companies have retirement plans (Plans) for all employees meeting
certain eligibility requirements. The Plans qualify under Section 401(k) of the
Internal Revenue Code. The Plans allow employee contributions of agreed-upon
salary reductions equal to a percentage of the employees' annual compensation,
subject to limitations. Employer contributions may be made at the discretion of
the employer in each year the Companies have accumulated earnings. The Companies
contributed $104,361, $122,650 and $57,265 to the Plans for the years ended
December 31, 1995, 1996 and 1997, respectively.

13. SUBSEQUENT EVENT

Effective May 13, 1998, the stockholders of the Companies executed a stock
purchase agreement to sell all of their outstanding common stock to General
Roofing Services, Inc. (GRS) for cash and common shares of GRS.

F-39
<PAGE> 121

INDEPENDENT AUDITORS' REPORT

To the Stockholder of
Anthony Roofing Ltd.:

We have audited the accompanying balance sheet of Anthony Roofing Ltd. (the
"Company") as of December 31, 1997, and the related statements of operations,
stockholder's equity and cash flows for the year then ended. 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 audit.

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

In our opinion, such financial statements present fairly, in all material
respects, the financial position of Anthony Roofing Ltd. as of December 31, 1997
and the results of its operations and its cash flows for the year then ended in
conformity with generally accepted accounting principles.

DELOITTE & TOUCHE LLP

Dallas, Texas
April 23, 1998
(May 13, 1998 as to Note 11)

F-40
<PAGE> 122

INDEPENDENT AUDITORS' REPORT

To the Stockholder of
Anthony Roofing Ltd.:

We have audited the accompanying balance sheet of Anthony Roofing Ltd. as
of December 31, 1996 and the related statements of operations, stockholder's
equity and cash flows for the fourteen month period ended December 31, 1995 and
the year ended December 31, 1996. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

In our opinion, such financial statements present fairly, in all material
respects, the financial position of Anthony Roofing Ltd. and the results of its
operations and its cash flows for the fourteen month period ended December 31,
1995 and the year ended December 31, 1996 in conformity with generally accepted
accounting principles.

DUGAN & LOPATKA CPA'S, P.C.

Wheaton, Illinois
May 22, 1998

F-41
<PAGE> 123

ANTHONY ROOFING LTD.

BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 31,
----------------------- MARCH 31,
1996 1997 1998
---------- ---------- -----------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents................................ $ 922,347 $1,939,026 $2,531,185
Contract receivables..................................... 2,732,086 3,499,477 1,815,320
Costs and estimated earnings in excess of billings....... 583,485 460,548 920,018
Other receivables........................................ 4,084 16,265 796
Due from related parties................................. 273,868
Inventories.............................................. 68,713 46,369 106,881
Prepaid expenses and other current assets................ 61,068 22,365 27,687
Refundable income taxes.................................. 33,933
---------- ---------- ----------
Total current assets............................. 4,679,584 5,984,050 5,401,887
PROPERTY AND EQUIPMENT, net................................ 416,255 683,677 695,897
---------- ---------- ----------
TOTAL............................................ $5,095,839 $6,667,727 $6,097,784
========== ========== ==========

LIABILITIES AND STOCKHOLDER'S EQUITY
CURRENT LIABILITIES:
Notes payable............................................ $ 803,086 $ $
Accounts payable......................................... 814,339 445,406 449,016
Accrued salaries and wages............................... 136,434 222,620 76,355
Accrued pension.......................................... 40,872 63,322 23,669
Accrued expenses and other current liabilities........... 57,328 98,483 73,633
Billings in excess of costs and estimated earnings....... 133,922 381,066 50,388
---------- ---------- ----------
Total current liabilities........................ 1,985,981 1,210,897 673,061
COMMITMENTS (Note 11)
STOCKHOLDER'S EQUITY:
Common stock............................................. 1,000 1,000 1,000
Retained earnings........................................ 3,108,858 5,455,830 5,423,723
---------- ---------- ----------
Total............................................ 3,109,858 5,456,830 5,424,723
---------- ---------- ----------
TOTAL............................................ $5,095,839 $6,667,727 $6,097,784
========== ========== ==========
</TABLE>

See notes to financial statements.

F-42
<PAGE> 124

ANTHONY ROOFING LTD.

STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
PERIOD
NOVEMBER 1, THREE MONTHS ENDED
1994 TO YEARS ENDED DECEMBER 31, MARCH 31,
DECEMBER 31, ------------------------- -----------------------
1995 1996 1997 1997 1998
------------ ----------- ----------- ---------- ----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
CONTRACT REVENUES EARNED.......... $13,310,048 $12,226,082 $19,777,750 $2,523,732 $2,488,841
COSTS OF CONTRACT REVENUES
EARNED.......................... 9,916,484 9,507,011 14,440,829 2,242,095 2,132,006
----------- ----------- ----------- ---------- ----------
GROSS PROFIT...................... 3,393,564 2,719,071 5,336,921 281,637 356,835
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES......... 1,915,034 2,086,484 2,869,800 371,818 444,744
----------- ----------- ----------- ---------- ----------
INCOME (LOSS) FROM OPERATIONS..... 1,478,530 632,587 2,467,121 (90,181) (87,909)
----------- ----------- ----------- ---------- ----------
OTHER INCOME (EXPENSE):
Interest income................. 47,916 30,922 32,912 27,181
Interest expense................ (5,371) (35,591) (10,452) (3,598) (1,676)
Other income (expense), net..... (5,133) (17,279) 79,979 1,500 30,873
----------- ----------- ----------- ---------- ----------
37,412 (21,948) 102,439 (2,098) 56,378
INCOME (LOSS) BEFORE INCOME
TAXES........................... 1,515,942 610,639 2,569,560 (92,279) (31,531)
INCOME TAX PROVISION.............. (5,200) (10,400) (50,000)
----------- ----------- ----------- ---------- ----------
NET INCOME (LOSS)....... $ 1,510,742 $ 600,239 $ 2,519,560 $ (92,279) $ (31,531)
=========== =========== =========== ========== ==========
</TABLE>

See notes to financial statements.

F-43
<PAGE> 125

ANTHONY ROOFING LTD.

STATEMENTS OF STOCKHOLDER'S EQUITY

<TABLE>
<CAPTION>
COMMON STOCK
SHARES STATED RETAINED
VALUE $10 AMOUNT EARNINGS TOTAL
---------------- ------- ---------- -----------
<S> <C> <C> <C> <C>
BALANCE, NOVEMBER 1, 1994...................... 100 $1,000 $2,864,110 $ 2,865,110
Net income................................... 1,510,742 1,510,742
Distribution to stockholder.................. (614,164) (614,164)
--- ------ ---------- -----------
BALANCE, DECEMBER 31, 1995..................... 100 1,000 3,760,688 3,761,688
Net income................................... 600,239 600,239
Distributions to stockholder................. (1,252,069) (1,252,069)
--- ------ ---------- -----------
BALANCE, DECEMBER 31, 1996..................... 100 1,000 3,108,858 3,109,858
Net income................................... 2,519,560 2,519,560
Distributions to stockholder................. (172,588) (172,588)
--- ------ ---------- -----------
BALANCE, DECEMBER 31, 1997..................... 100 1,000 5,455,830 5,456,830
Net loss (unaudited)......................... (31,531) (31,531)
Distributions to stockholder (unaudited)..... (576) (576)
--- ------ ---------- -----------
BALANCE, MARCH 31, 1998
(unaudited).................................. 100 $1,000 $5,423,723 $ 5,424,723
=== ====== ========== ===========
</TABLE>

See notes to financial statements.

F-44
<PAGE> 126

ANTHONY ROOFING LTD.

STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
PERIOD
NOVEMBER 1, YEARS ENDED THREE MONTHS ENDED
1994 TO DECEMBER 31, MARCH 31,
DECEMBER 31, ------------------------ ----------------------
1995 1996 1997 1997 1998
------------ ----------- ---------- --------- ----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)..................................... $ 1,510,742 $ 600,239 $2,519,560 $ (92,279) $ (31,531)
Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities:
Depreciation and amortization....................... 188,417 165,177 219,578 42,939 57,000
Loss (gain) on disposal of assets................... 5,133 24,539 (55,534) (740)
Changes in operating assets and liabilities:
Contract receivables, net......................... 763,867 (257,545) (767,391) 706,571 1,684,157
Costs and estimated earnings in excess of
billings........................................ 254,581 35,634 122,937 (292,407) (459,470)
Inventories....................................... (68,713) 22,344 (36,258) (60,512)
Other current assets.............................. (58,577) 79,930 60,455 10,059 10,147
Accounts payable and accrued expenses............. (570,645) 664,182 (219,142) (327,447) (207,158)
Billings in excess of costs and estimated
earnings........................................ (335,587) (112,227) 247,144 (85,095) (330,678)
----------- ----------- ---------- --------- ----------
Net cash provided by (used in) operating
activities.................................... 1,757,931 1,131,216 2,149,951 (73,917) 661,215
----------- ----------- ---------- --------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment................... (217,615) (260,869) (506,197) (23,579) (69,997)
Due from related parties.............................. (273,868) 273,868 273,868
Proceeds from sale of property and equipment.......... 12,086 14,500 74,731 1,517
Other................................................. 1,370
----------- ----------- ---------- --------- ----------
Net cash provided by (used in) investing
activities.................................... (204,159) (520,237) (157,598) 250,289 (68,480)
----------- ----------- ---------- --------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net payments on notes payable to bank................. (450,000) 803,086 (803,086) (803,086)
Distributions to stockholder.......................... (614,164) (1,152,069) (172,588) (576)
----------- ----------- ---------- --------- ----------
Net cash used in financing activities........... (1,064,164) (348,983) (975,674) (803,086) (576)
----------- ----------- ---------- --------- ----------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS.... 489,608 261,996 1,016,679 (626,714) 592,159
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD.......... 170,743 660,351 922,347 922,347 1,939,026
----------- ----------- ---------- --------- ----------
CASH AND CASH EQUIVALENTS, END OF PERIOD................ $ 660,351 $ 922,347 $1,939,026 $ 295,633 $2,531,185
=========== =========== ========== ========= ==========
CASH PAYMENTS FOR:
Interest.............................................. $ 5,371 $ 35,591 $ 5,613 $ 3,356 $ 168
Taxes................................................. 31,365 22,449 35,100 25,532 47,000
NONCASH FINANCING ACTIVITY -- Note receivable
distributed to shareholder............................ $ 100,000
</TABLE>

See notes to financial statements.

F-45
<PAGE> 127

ANTHONY ROOFING LTD.

NOTES TO FINANCIAL STATEMENTS

1. GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

General -- Anthony Roofing Ltd. (the "Company") operates as a provider of
comprehensive roofing services to commercial, construction and government
customers. The work is generally performed under fixed-price contracts. The
lengths of the Company's contracts vary, but generally are less than one year.
The Company's offices are located in Aurora, Illinois and the majority of the
Company's business is transacted with customers in Illinois. A majority of the
Company's employees are covered by collective bargaining agreements.

Change in Fiscal Year -- Prior to 1995, the Company had a fiscal year of
October 31. In 1995, the year-end was changed to December 31, and the Company's
financial statements include the fourteen-month period ended December 31, 1995.
On an unaudited basis, for the months of November and December 1995, revenues
were $1,019,845, loss from operations was ($5,898) and net loss was ($8,476).

Interim Financial Information -- The interim financial statements as of
March 31, 1998 and for the three months ended March 31, 1997 and 1998 are
unaudited, and certain information and footnote disclosures normally included in
annual financial statements prepared in accordance with generally accepted
accounting principles have been omitted. In the opinion of management, all
adjustments, consisting only of normal recurring items, necessary to fairly
present the financial position, results of operations and cash flows with
respect to the interim financial statements have been included. The results of
operations for the interim period are not necessarily indicative of the results
for an entire fiscal year.

Cash and Cash Equivalents -- The Company considers all highly liquid
investments purchased with an original maturity of three months or less to be
cash equivalents.

Contract Receivables -- The Company carries contract receivables at the
amounts it deems to be collectible. Accordingly, the Company provides allowances
for contract receivables it deems to be uncollectible based on management's best
estimates. Recoveries are recognized in the period they are received. The
ultimate amounts of contract receivables that become uncollectible could differ
from those estimated.

Inventories -- Inventories consist primarily of materials and supplies and
are valued at the lower of first-in, first-out cost or market.

F-46
<PAGE> 128
ANTHONY ROOFING LTD.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

Property and Equipment -- Property and equipment are stated at cost less
accumulated depreciation. Property and equipment are reviewed for impairment and
a provision recorded, if necessary, whenever events or circumstances indicate
that the carrying amount of an asset may not be recoverable. Routine repairs and
maintenance are expensed as incurred; improvements are capitalized at cost and
are amortized over the remaining useful life of the related asset. Depreciation
is recorded using accelerated and straight-line methods over the estimated
useful lives of the related assets. Depreciation and amortization are provided
over the following estimated useful lives:

<TABLE>
<S> <C>
Leasehold improvements.................................... 7 to 39 years
Machinery and equipment................................... 3 to 7 years
Computer equipment........................................ 3 to 7 years
</TABLE>

Contract costs include all direct material and labor costs and those
indirect costs related to contract performance such as indirect labor, supplies
and tools. Selling, general and administrative costs are charged to expense as
incurred. Costs for materials incurred at the inception of a project which are
not reflective of effort are excluded from the percentage of completion
calculation for purposes of determining profits earned on uncompleted contracts.

Estimates made with respect to uncompleted projects are subject to change
as the project progresses and better estimates of project costs become
available. Revisions in cost and profit estimates during the course of the work
are reflected in the period in which the facts requiring revision become known.
Where a loss is forecast for a contract, the full amount of the anticipated loss
is recognized in the period in which it is determined that a loss will occur,
regardless of the stage of completion.

Income Taxes -- The Company is an S Corporation for federal income tax
purposes. Accordingly, the current taxable income of the Company is taxable to
the shareholder, who is responsible for the payment of taxes thereon. The income
tax provision and related deferred income tax balances are for state income and
franchise taxes. The tax basis of assets and liabilities of the Company differs
from the financial statement basis principally due to the use of the completed
contract method of reporting revenues for income tax purposes and due to
accelerated depreciation of assets for tax purposes.

Effective January 1, 1998, the Company adopted Statement of Financial
Accounting Standards No. 130, Reporting Comprehensive Income. There are no
differences between comprehensive income and net income as reported in the
statement of operations.

Reclassification -- Certain amounts in the 1995 and 1996 financial
statements have been reclassified to conform to the 1997 presentation.

F-47
<PAGE> 129
ANTHONY ROOFING LTD.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

2. CONTRACT RECEIVABLES

Contract receivables consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
-----------------------
1996 1997
---------- ----------
<S> <C> <C>
Completed contracts:
Current accounts.......................................... $1,265,792 $1,192,346
Retention................................................. 18,923 205,904
Contracts in progress:
Current accounts.......................................... 1,165,709 1,701,751
Retention................................................. 281,662 399,476
---------- ----------
Contract receivables, net......................... $2,732,086 $3,499,477
========== ==========
</TABLE>

There is no allowance for doubtful accounts recorded at December 31, 1997
and 1996; management believes all amounts are collectible.

3. CONTRACTS IN PROGRESS

Information relative to contracts in progress is summarized as follows:

<TABLE>
<CAPTION>
DECEMBER 31,
-----------------------
1996 1997
---------- ----------
<S> <C> <C>
Costs incurred on uncompleted contracts..................... $3,284,673 $6,367,687
Estimated earnings.......................................... 1,199,215 2,274,900
---------- ----------
4,483,888 8,642,587
Activity in prior years on contracts in progress............ 447,380
---------- ----------
Total....................................................... 4,483,888 9,089,967
Less: billings to date...................................... (4,034,325) (9,010,485)
---------- ----------
Net under billings................................ $ 449,563 $ 79,482
========== ==========
</TABLE>

The foregoing is included in the accompanying balance sheets under the
following captions:

<TABLE>
<CAPTION>
DECEMBER 31,
---------------------
1996 1997
--------- ---------
<S> <C> <C>
Costs and estimated earnings in excess of billings.......... $ 583,485 $ 460,548
Billings in excess of costs and estimated earnings.......... (133,922) (381,066)
--------- ---------
Total............................................. $ 449,563 $ 79,482
========= =========
</TABLE>

F-48
<PAGE> 130
ANTHONY ROOFING LTD.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

4. PROPERTY AND EQUIPMENT

Property and equipment consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
-------------------------
1996 1997
----------- -----------
<S> <C> <C>
Leasehold improvements...................................... $ 42,112 $ 69,614
Machinery and equipment..................................... 1,474,459 1,853,457
Computer equipment.......................................... 162,279 181,238
----------- -----------
Subtotal.................................................... 1,678,850 2,104,309
Less: accumulated depreciation.............................. (1,262,595) (1,420,632)
----------- -----------
Property and equipment, net....................... $ 416,255 $ 683,677
=========== ===========
</TABLE>

5. NOTES PAYABLE

<TABLE>
<CAPTION>
DECEMBER 31,
---------------
1996 1997
-------- ----
<S> <C> <C>
$1,250,000 revolving line of credit due May 31, 1998,
bearing Interest at a variable rate based on the LIBOR
rate plus 2.75% (8.5% and 8.25% at December 31, 1996 and
1997, respectively). Secured by contract receivables,
inventories and equipment. The Company must retain a
compensating Balance of $70,000 in the bank at all
times..................................................... $803,086 $0
$200,000 revolving line of credit due May 31, 1998, bearing
interest at a variable rate based on the LIBOR rate plus
2.75%. Secured by contract receivables, inventories and
equipment.................................................
-------- --
$803,086 $0
======== ==
</TABLE>

At December 31, 1997, the Company had unused lines of credit totalling
$1,450,000 to provide for additional borrowings.

6. FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company's financial instruments consist of cash and cash equivalents,
contract receivables, accounts and notes payable, and debt. The carrying value
of these financial instruments approximates fair value because of their short
duration or current interest rates. The Company places its temporary cash
investments with financial institutions and limits the amount of credit exposure
with any one financial institution.

Other financial instruments which potentially subject the Company to
significant concentrations of credit risk consist primarily of contract
receivables. The Company's customers are concentrated in the Illinois market.
The Company believes this concentration of credit risk is mitigated by the
diversity of industries represented by the Company's customer base.

7. MAJOR CUSTOMERS

Sales to three customers were 18%, 13% and 10% of total sales,
respectively, for the fourteen month period ended December 31, 1995. Sales to
two customers were 16% and 12% of total sales, respectively, for the year ended
December 31, 1996, and sales to one customer was 14% of total sales for the year
ended December 31, 1997.

F-49
<PAGE> 131
ANTHONY ROOFING LTD.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

8. MAJOR SUPPLIERS

Purchases from each of two suppliers exceeded 10% of materials purchased
for the fourteen month period ended December 31, 1995, aggregating 26%,
purchases from each of three suppliers exceeded 10% of materials purchased for
the year ended December 31, 1996 aggregating 48% and purchases from each of four
suppliers exceeded 10% of materials purchased for the year ended December 31,
1997, aggregating 64%.

9. EMPLOYEE BENEFIT PLANS

The Company has A defined contribution money purchase plan covering
substantially all full-time, nonunion employees who have completed at least one
year of service. Participants vest 20% per year over a five-year period until
100% vested. The plan requires the Company to contribute 10% of an employee's
compensation to the plan annually. The Company's contribution to the plan for
the fourteen month period ended December 31, 1995 and the years ended December
31, 1996 and 1997 was $61,598, $40,872 and $63,322, respectively.

The Company contributes monthly to multi-employer defined benefit union
plans based upon hours worked by each eligible employee. Pension expense for
these plans was approximately $429,000, $209,000 and $340,000 for the fourteen
month period ended December 31, 1995 and the years ended December 31, 1996 and
1997, respectively.

10. RELATED PARTY TRANSACTIONS

The Company has entered into a long-term lease arrangement (with an initial
term expiring in December 2001 and options to extend through 2016) with an
entity controlled by and related to the Company's stockholder. The following are
the Company's commitments with respect to the lease for the years ending
December 31:

<TABLE>
<S> <C>
1998........................................................ $164,000
1999........................................................ 172,000
2000........................................................ 181,000
2001........................................................ 190,000
--------
Total............................................. $707,000
========
</TABLE>

Total rent expense with related entities was $140,182, $135,741 and
$195,677 during the fourteen month period ended December 31, 1995 and the years
ended December 31, 1996 and 1997, respectively.

During the fourteen month period ended December 31, 1995 and the years
ended December 31, 1996 and 1997, the Company purchased $74,000, $200,000 and
$164,000, respectively, of subcontractor services from a company owned by a
relative of the Company's stockholder.

The Company has entered into an employment agreement with the
officer/shareholder which includes a nonqualified deferred compensation program.
There was no deferral required under the plan at December 31, 1996 and 1997. A
deduction for income tax purposes is allowed at the time the deferred
compensation is paid to the employee.

11. SUBSEQUENT EVENT

On May 13, 1998, the Company signed a stock purchase agreement with General
Roofing Services, Inc. ("GRS") whereby GRS will acquire the Company for a
combination of cash and common shares of GRS concurrent with the consummation of
an initial public offering of the common stock of GRS, subject to certain
conditions including the consummation of the Offering.

* * * * * *

F-50
<PAGE> 132

INDEPENDENT AUDITORS' REPORT

To the Stockholders of
Specialty Associates, Inc.
and to the Stockholder of
SAI Wholesale Distributors, Inc.

We have audited the accompanying combined balance sheets of Specialty
Associates, Inc. and Affiliate both of which are under common ownership and
common management (the "Company") as of February 1, 1998 and February 2, 1997,
and the related combined statements of operations, stockholders' equity and cash
flows for each of the two years in the period ended February 1, 1998. The
combined financial statements include the accounts of Specialty Associates, Inc.
and SAI Wholesale Distributors, Inc., which are affiliates under common
ownership and common management. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

In our opinion, such financial statements present fairly, in all material
respects, the combined financial position of Specialty Associates, Inc. and
Affiliate as of February 1, 1998 and February 2, 1997, and the combined results
of operations and combined cash flows for the years then ended in conformity
with generally accepted accounting principles.

DELOITTE & TOUCHE LLP

Dallas, Texas
April 27, 1998
(May 12,1998 as to Note 12)

F-51
<PAGE> 133

SPECIALTY ASSOCIATES, INC. AND AFFILIATE

COMBINED BALANCE SHEETS

<TABLE>
<CAPTION>
FEBRUARY 2, FEBRUARY 1, APRIL 5,
1997 1998 1998
----------- ----------- -----------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents................................ $ 9,318 $ 135,781 $ 30,544
Contract receivables, net of an allowance for doubtful
accounts of $25,000, $25,000 and $26,000,
respectively.......................................... 2,058,528 1,877,343 1,699,082
Costs and estimated earnings in excess of billings....... 45,677 49,524 53,835
Inventories.............................................. 708,430 657,131 800,374
Prepaid expenses and other current assets................ 14,623 24,382
Deferred income taxes.................................... 31,000 31,000 31,000
---------- ---------- ----------
Total current assets............................. 2,867,576 2,750,779 2,639,217
PROPERTY AND EQUIPMENT, net...................... 1,279,129 1,599,824 1,564,724
OTHER ASSETS............................................... 85,127 149,823 161,823
---------- ---------- ----------
TOTAL............................................ $4,231,832 $4,500,426 $4,365,764
========== ========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Line of credit........................................... $ 700,000 $ 700,000 $ 800,000
Accounts payable......................................... 1,115,813 906,488 824,074
Accrued expenses and other current liabilities........... 233,752 453,362 389,240
Billings in excess of costs and estimated earnings....... 261,994 162,254 204,717
Current portion of long-term debt........................ 183,736 202,000 202,000
---------- ---------- ----------
Total current liabilities........................ 2,495,295 2,424,104 2,420,031
LONG-TERM DEBT, net of current portion..................... 533,297 518,696 468,933
DEFERRED INCOME TAXES...................................... 73,000 139,000 139,000
---------- ---------- ----------
Total............................................ 3,101,592 3,081,800 3,027,964
---------- ---------- ----------
COMMITMENTS AND CONTINGENCIES (NOTES 10, 11)
STOCKHOLDERS' EQUITY:
Common stock............................................. 34,488 34,488 34,488
Additional paid-in capital............................... 216,175 216,175 216,175
Retained earnings........................................ 991,379 1,326,245 1,245,419
Treasury stock........................................... (111,802) (158,282) (158,282)
---------- ---------- ----------
Total............................................ 1,130,240 1,418,626 1,337,800
---------- ---------- ----------
TOTAL............................................ $4,231,832 $4,500,426 $4,365,764
========== ========== ==========
</TABLE>

See notes to combined financial statements.

F-52
<PAGE> 134

SPECIALTY ASSOCIATES, INC. AND AFFILIATE

COMBINED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
NINE WEEK
PERIOD ENDED
FEBRUARY 2, FEBRUARY 1, -----------------------
1997 1998 APRIL 6, APRIL 5,
(53 WEEKS) (52 WEEKS) 1997 1998
----------- ----------- ---------- ----------
(UNAUDITED)
<S> <C> <C> <C> <C>
REVENUES:
Construction revenues....................... $14,211,377 $16,148,375 $2,336,771 $1,486,539
Product sales............................... 1,095,261 1,049,214 57,415 54,885
COSTS OF SALES AND CONSTRUCTION:
Cost of construction........................ 12,919,520 14,276,016 2,177,734 1,400,766
Cost of product sold........................ 740,117 680,965 34,623 38,240
----------- ----------- ---------- ----------
GROSS PROFIT.................................. 1,647,001 2,240,608 181,829 102,418
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES..................... 1,235,738 1,486,581 188,739 212,371
----------- ----------- ---------- ----------
INCOME (LOSS) FROM
OPERATIONS............................... 411,263 754,027 (6,910) (109,953)
OTHER INCOME (EXPENSE):
Interest expense............................ (144,817) (136,428) (23,776) (22,358)
Other income, net........................... 2,195 2,267 303 485
----------- ----------- ---------- ----------
(142,622) (134,161) (23,473) (21,873)
INCOME (LOSS) BEFORE
INCOME TAXES................................ 268,641 619,866 (30,383) (131,826)
INCOME TAX (PROVISION) BENEFIT................ (132,000) (285,000) 12,000 51,000
----------- ----------- ---------- ----------
NET INCOME (LOSS)................... $ 136,641 $ 334,866 $ (18,383) $ (80,826)
=========== =========== ========== ==========
</TABLE>

See notes to combined financial statements.

F-53
<PAGE> 135

SPECIALTY ASSOCIATES, INC. AND AFFILIATE

COMBINED STATEMENTS OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
ADDITIONAL
PAID-IN TREASURY RETAINED
AMOUNT CAPITAL STOCK EARNINGS TOTAL
------- ---------- --------- ---------- ----------
<S> <C> <C> <C> <C> <C>
BALANCE, JANUARY 28, 1996................ $34,488 $216,175 $(109,960) $ 854,738 $ 995,441
Net income............................. 136,641 136,641
Stock repurchase (100 shares).......... (1,842) (1,842)
------- -------- --------- ---------- ----------
BALANCE, FEBRUARY 2, 1997................ 34,488 216,175 (111,802) 991,379 1,130,240
Net income............................. 334,866 334,866
Stock repurchase (1,495 shares)........ (46,480) (46,480)
------- -------- --------- ---------- ----------
BALANCE, FEBRUARY 1, 1998................ 34,488 216,175 (158,282) 1,326,245 1,418,626
Net loss (unaudited)................... (80,826) (80,826)
------- -------- --------- ---------- ----------
BALANCE, APRIL 5, 1998
(unaudited)............................ $34,488 $216,175 $(158,282) $1,245,419 $1,337,800
======= ======== ========= ========== ==========
</TABLE>

See notes to combined financial statements.

F-54
<PAGE> 136

SPECIALTY ASSOCIATES, INC. AND AFFILIATE

COMBINED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
YEARS ENDED NINE WEEK PERIOD ENDED
------------------------- ----------------------
FEBRUARY 2, FEBRUARY 1, APRIL 6, APRIL 5,
1997 1998 1997 1998
----------- ----------- ---------- ---------
(53 WEEKS) (52 WEEKS) (UNAUDITED)
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)................................ $136,641 $334,866 $ (18,383) $(80,826)
Adjustments to reconcile net income (loss) to net
cash provided by (used in) operating
activities:
Depreciation and amortization................. 202,457 222,072 37,235 35,100
Deferred income taxes......................... 29,000 66,000
Changes in operating assets and liabilities:
Contract receivables, net................... (496,309) 181,185 147,393 178,261
Costs and estimated earnings in excess of
billings................................. (13,625) (3,847) (27,517) (4,311)
Inventories................................. (72,260) 51,299 9,262 (143,243)
Prepaid expenses and other current assets... (5,352) 14,623 (13,406) (24,382)
Accounts payable and accrued expenses....... 353,268 10,285 113,178 (146,536)
Billings in excess of costs and estimated
earnings................................. 119,532 (99,740) (41,622) 42,463
-------- -------- --------- --------
Net cash provided by (used in) operating
activities............................. 253,352 776,743 206,140 (143,474)
-------- -------- --------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment.............. (183,926) (536,363) (135,245)
Other............................................ 1,032 (71,100) (10,000) (12,000)
-------- -------- --------- --------
Net cash used in investing activities.... (182,894) (607,463) (145,245) (12,000)
-------- -------- --------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Purchase of Treasury shares...................... (1,842) (46,480)
Net proceeds from (payments on) line of credit... (100,000) 100,000
Proceeds from the issuance of long-term debt..... 498,170 247,037 106,449
Repayments of long-term debt..................... (580,968) (243,374) (32,183) (49,763)
-------- -------- --------- --------
Net cash (used in) provided by financing
activities............................. (84,640) (42,817) (25,734) 50,237
-------- -------- --------- --------
NET (DECREASE) INCREASE IN CASH AND CASH
EQUIVALENTS...................................... (14,182) 126,463 35,161 (105,237)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD..... 23,500 9,318 9,318 135,781
-------- -------- --------- --------
CASH AND CASH EQUIVALENTS, END OF PERIOD........... $ 9,318 $135,781 $ 44,479 $ 30,544
======== ======== ========= ========
CASH PAYMENTS FOR:
Interest......................................... $147,436 $135,469 $ 24,768 $ 22,358
Taxes............................................ 42,302 103,680
</TABLE>

See notes to combined financial statements.

F-55
<PAGE> 137

SPECIALTY ASSOCIATES, INC. AND AFFILIATE

NOTES TO COMBINED FINANCIAL STATEMENTS

1. GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

General -- Specialty Associates, Inc. is a construction contractor whose
principal business is commercial and residential roofing, including
architectural sheet metal fabrication, primarily in the Midwest United States.
SAI Wholesale Distributors, Inc. distributes roofing material primarily to
Specialty Associates, Inc. and other roofing contractors. The Company has
general office facilities in West Allis, Wisconsin.

Fiscal Year -- The Company operates on a 52-53 week fiscal year ending on
the Sunday nearest to January 31.

Basis of Presentation -- The combined financial statements include the
accounts of Specialty Associates, Inc. and SAI Wholesale Distributors, Inc.
(collectively, the "Company"). The companies have common ownership, share
management and facilities, and accordingly, the financial statements have been
combined. Significant intercompany transactions have been eliminated in the
accompanying combined financial statements.

The capital structure of each entity as of February 1, 1998 and February 2,
1997 is as follows:

<TABLE>
<CAPTION>
ADDITIONAL
COMMON PAID-IN
STOCK CAPITAL
------- ----------
<S> <C> <C>
SAI Wholesale Distributors, Inc., 2,200 shares authorized,
1,000 issued and outstanding no par value common stock.... $ 2,288
Specialty Associates, Inc., 100,000 shares authorized and no
par value common stock, and outstanding 91,304 shares in
1998 and 92,799 shares in 1997............................ 32,200 $216,175
------- --------
$34,488 $216,175
======= ========
</TABLE>

Interim Financial Information -- The interim financial statements as of
April 5, 1998 and for the nine week period ended April 6, 1997 and April 5, 1998
are unaudited, and certain information and footnote disclosures normally
included in annual financial statements prepared in accordance with generally
accepted accounting principles have been omitted. In the opinion of management,
all adjustments, consisting only of normal recurring items, necessary to fairly
present the financial position, results of operations and cash flows with
respect to the interim financial statements have been included. The results of
operations for the interim period are not necessarily indicative of the results
for an entire fiscal year.

Cash and Cash Equivalents -- The Company considers all highly liquid
investments purchased with an original maturity of three months or less to be
cash equivalents.

Credit Policy -- In the normal course of business, the Company provides
credit to its customers and does not generally require collateral. The Company
principally deals with recurring customers, state and local governments and
local companies whose reputation is known to the Company. Advance payments and
progress payments are generally required for significant projects. Credit checks
are performed for significant

F-56
<PAGE> 138
SPECIALTY ASSOCIATES, INC. AND AFFILIATE

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

new customers that are not known to the Company. The Company generally has the
ability to file liens against the property if it is not paid on a timely basis.

Inventories -- Inventories are valued at the lower of first-in, first-out
cost or market.

<TABLE>
<S> <C>
Building and improvements................................... 5 to 39 years
Machinery and equipment..................................... 4 to 10 years
Furniture and fixtures...................................... 10 years
</TABLE>

Contract costs include all direct material and labor costs related to
contract performance. Indirect costs are included in total construction costs
but are not allocated to specific contracts. Selling, general and administrative
costs are charged to expense as incurred. Costs for materials incurred at the
inception of a project which are not reflective of effort are excluded from
costs incurred for purposes of increasing revenue recognition and profits.

Estimates made with respect to uncompleted projects are subject to change
as the project progresses and better estimates of project costs become
available. Revisions in cost and profit estimates during the course of the work
are reflected in the period in which the facts requiring revision become known.
Where a loss is forecast for a contract, the full amount of the anticipated loss
is recognized in the period in which it is determined that a loss will occur,
regardless of the stage of completion.

Income Taxes -- The Company reports income taxes pursuant to Statement of
Financial Accounting Standards ("SFAS") No. 109, Accounting for Income Taxes.
Under SFAS No. 109, income taxes are provided for the tax effects of
transactions reported in the financial statements and consist of taxes currently
due plus deferred taxes related to certain income and expenses recognized in
different periods for financial and income tax reporting purposes. Deferred tax
assets and liabilities represent the future tax consequences of those
differences. Deferred taxes are also recognized for operating losses and tax
credits that are available to offset future taxable income and income taxes,
respectively. A valuation allowance is provided if it is more likely than not
that some portion or all of the deferred tax assets will not be realized.

New Accounting Pronouncements -- Effective February 2, 1998, the Company
adopted Statement of Financial Accounting Standards No. 130, Reporting
Comprehensive Income. There are no significant differences between comprehensive
income and net income as reported in the Company's statements of operations.

F-57
<PAGE> 139
SPECIALTY ASSOCIATES, INC. AND AFFILIATE

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

2. CONTRACT RECEIVABLES

Contract receivables consist of the following:

<TABLE>
<CAPTION>
FEBRUARY 2, FEBRUARY 1,
1997 1998
----------- -----------
<S> <C> <C>
Trade....................................................... $1,590,632 $1,352,844
Retention................................................... 492,896 549,499
---------- ----------
Subtotal.................................................... 2,083,528 1,902,343
Less: allowance for doubtful accounts....................... (25,000) (25,000)
---------- ----------
Contract receivables, net......................... $2,058,528 $1,877,343
========== ==========
</TABLE>

3. CONTRACTS IN PROGRESS

Information relative to contracts in progress is summarized as follows:

<TABLE>
<CAPTION>
FEBRUARY 2, FEBRUARY 1,
1997 1998
----------- -----------
<S> <C> <C>
Costs incurred on uncompleted contracts..................... $2,174,756 $1,511,001
Estimated earnings.......................................... 556,235 437,097
---------- ----------
Total....................................................... 2,730,991 1,948,098
Less: billings to date...................................... (2,947,308) (2,060,828)
---------- ----------
Net over billings................................. $ (216,317) $ (112,730)
========== ==========
</TABLE>

The foregoing is included in the accompanying balance sheets under the
following captions:

<TABLE>
<CAPTION>
FEBRUARY 2, FEBRUARY 1,
1997 1998
----------- -----------
<S> <C> <C>
Costs and estimated earnings in excess of billings.......... $ 45,677 $ 49,524
Billings in excess of costs and estimated earnings.......... (261,994) (162,254)
--------- ---------
Total............................................. $(216,317) $(112,730)
========= =========
</TABLE>

4. PROPERTY AND EQUIPMENT

Property and equipment consist of the following:

<TABLE>
<CAPTION>
FEBRUARY 2, FEBRUARY 1,
1997 1998
----------- -----------
<S> <C> <C>
Land........................................................ $ 125,000 $ 125,000
Building and improvements................................... 616,145 659,445
Machinery and equipment..................................... 2,155,729 2,648,792
----------- -----------
Subtotal.................................................... 2,896,874 3,433,237
Less: accumulated depreciation.............................. (1,617,745) (1,833,413)
----------- -----------
Property and equipment, net....................... $ 1,279,129 $ 1,599,824
=========== ===========
</TABLE>

F-58
<PAGE> 140
SPECIALTY ASSOCIATES, INC. AND AFFILIATE

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

5. LINE OF CREDIT, LONG-TERM DEBT AND NOTES PAYABLE

A summary of long-term debt is as follows:

<TABLE>
<CAPTION>
FEBRUARY 2, FEBRUARY 1,
1997 1998
----------- -----------
<S> <C> <C>
Mortgage note payable to bank, due in monthly installments
of $5,297, including interest at prime plus 1.5% (10% at
February 1, 1998) to September 2001 when the unpaid
balance is due............................................ $447,318 $407,831

Notes payable collateralized by equipment and vehicles,
payable in monthly installments ranging from $322 to
$3,896, including interest ranging from 8.50% to 12.25% to
various dates through 2002................................ 269,715 312,865
-------- --------
Total debt........................................ 717,033 720,696
Less: current maturities.................................... 183,736 202,000
-------- --------
Total long-term debt.............................. $533,297 $518,696
======== ========
</TABLE>

At February 1, 1998, the Company has a $1,000,000 revolving credit
agreement with a bank which expires June 1, 1998. Advances on the credit
agreement bear interest at the prime rate plus .75% (9.25% at February 1, 1998),
are due on demand, and are secured by a General Business Security Agreement
covering substantially all assets of the Company and by a second mortgage on
real estate owned by the Company. The agreement is further secured by a guaranty
of the majority stockholder. In addition, the agreement requires the Company to
meet certain financial covenants. Advances may not exceed 80% of qualified
receivables and 50% of qualified inventory. As of February 1, 1998 and February
2, 1997, $700,000 was drawn on the line.

Aggregate maturities of long-term debt for years ending February 1 are as
follows:

<TABLE>
<S> <C>
1999........................................................ $202,000
2000........................................................ 111,563
2001........................................................ 72,900
2002........................................................ 334,233
--------
Total............................................. $720,696
========
</TABLE>

6. INCOME TAXES

The Company's provisions for income taxes consist of the following:

<TABLE>
<CAPTION>
FEBRUARY 2, FEBRUARY 1,
1997 1998
----------- -----------
<S> <C> <C>
Current:
Federal................................................... $ 92,000 $176,000
State..................................................... 11,000 43,000
-------- --------
103,000 219,000
-------- --------
Deferred:
Federal................................................... 29,000 66,000
-------- --------
$132,000 $285,000
======== ========
</TABLE>

F-59
<PAGE> 141
SPECIALTY ASSOCIATES, INC. AND AFFILIATE

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

The difference between the statutory federal income tax rate and the
Company's effective tax rate is as follows:

<TABLE>
<CAPTION>
FEBRUARY 2, FEBRUARY 1,
1997 1998
----------- -----------
<S> <C> <C>
Statutory federal tax rate.................................. 34.0% 34.0%
State tax, net of federal benefit........................... 5.1 5.1
Other....................................................... 9.9 6.9
---- ----
Effective rate.............................................. 49.0% 46.0%
==== ====
</TABLE>

During 1997 and 1998, the Company increased the estimated effective rate
for temporary differences as a result of increased taxable income.

Components of the Company's deferred tax assets and liabilities are as
follows:

<TABLE>
<CAPTION>
FEBRUARY 2, FEBRUARY 1,
1997 1998
----------- -----------
<S> <C> <C>
Deferred tax assets:
Allowance for doubtful accounts........................... $ 10,000 $ 10,000
Accrual for unpaid self-insurance claims.................. 10,000 10,000
Impact on gross profit for uninstalled contract
materials.............................................. 16,000 8,000
Other temporary differences, net.......................... 3,000 3,000
-------- ---------
39,000 31,000
-------- ---------
Deferred tax liabilities:
Accelerated depreciation for income tax purposes.......... (73,000) (139,000)
Prepaid expenses.......................................... (8,000) 0
-------- ---------
(81,000) (139,000)
-------- ---------
Net deferred income tax liability................. $(42,000) $(108,000)
======== =========
</TABLE>

The components of deferred income taxes included in the February 2, 1997
and February 1, 1998 balance sheet are as follows:

<TABLE>
<S> <C> <C>
Net current assets.......................................... $ 31,000 $ 31,000
Net non-current liabilities................................. (73,000) (139,000)
-------- ---------
$(42,000) $(108,000)
======== =========
</TABLE>

7. FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company's financial instruments consist of cash and cash equivalents,
contract receivables, and accounts and notes payable. The carrying value of
these financial instruments approximates fair value because of their short
duration or current interest rates. The Company places its temporary cash
investments with financial institutions and limits the amount of credit exposure
with any one financial institution. The carrying value of debt approximates fair
value based on current rates for borrowings of similar quality and terms.

8. PENSION AND PROFIT SHARING/401(K) PLANS

The Company contributes to various union-sponsored, multi-employer pension
and benefit plans and trust funds on behalf of the union employees. The total
amount contributed to these union plans and trusts was approximately $429,000
and $476,000 in fiscal 1997 and 1998, respectively. If the Company's employees
were to vote to withdraw from the union, certain amounts may be due for
under-funded pension obligations.

F-60
<PAGE> 142
SPECIALTY ASSOCIATES, INC. AND AFFILIATE

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

The Company has two profit sharing/401(k) plans covering eligible
employees. One plan is for non-union employees and one is for union employees.
Contributions to these plans are discretionary based on approval of the Board of
Directors. Currently, the Company is matching 30% of the first 6% of
compensation contributed by the employees for the non-union plan, and 10% of the
first 6% of compensation for union employees. In addition, certain non-union
employees receive an additional $1.45 per hour worked as a contribution from the
Company. Contributions made by the Company for the years ended February 2, 1997
and February 1, 1998 to the plans were approximately $26,000 and $48,000,
respectively.

9. SELF-INSURANCE PLAN

The Company, in an effort to reduce health and dental insurance premiums,
participates in a partial self-funding insurance program. The maximum annual
liability of the Company under this plan is $30,000 per employee for the years
ended February 2, 1997 and February 1, 1998. The Company has purchased insurance
to cover claims in excess of this amount.

Total expenses under this plan, including insurance premiums and
administration costs, aggregated approximately $187,000 and $155,000 for the
years ended February 2, 1997 and February 1, 1998, respectively. Approximately
$25,000 had been recorded as an accrued liability for claims incurred but
unpaid.

10. COMMITMENTS AND CONTINGENCIES

11. MAJOR MATERIAL SUPPLIER

Purchases from one material supplier comprised approximately 33% and 31% of
material purchases in fiscal years 1997 and 1998. Amounts due to this supplier
represented approximately 35% and 20% of outstanding accounts payable at
February 2, 1997 and February 1, 1998, respectively.

12. SUBSEQUENT EVENT

On May 12, 1998, the Company signed a stock purchase agreement with General
Roofing Services, Inc. ("GRS") whereby GRS will acquire the Company in a merger
for a combination of cash and common shares of GRS concurrent with the
consummation of an initial public offering of the common stock of GRS, subject
to certain conditions including the consummation of the Offering.

* * * * * *

F-61
<PAGE> 143

INDEPENDENT AUDITORS' REPORT

To the Stockholder of
Cyclone Roofing Company:

We have audited the accompanying balance sheets of Cyclone Roofing Company
(the "Company") as of December 31, 1996 and 1997, and the related statements of
operations, stockholder's equity and cash flows for each of the three years in
the period ended December 31, 1997. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

In our opinion, such financial statements present fairly, in all material
respects, the financial position of Cyclone Roofing Company as of December 31,
1996 and 1997, and the results of its operations and its cash flows for each of
the three years in the period ended December 31, 1997 in conformity with
generally accepted accounting principles.

DELOITTE & TOUCHE LLP

Atlanta, Georgia
May 19, 1998

F-62
<PAGE> 144

CYCLONE ROOFING COMPANY

BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 31,
----------------------- MARCH 31,
1996 1997 1998
---------- ---------- -----------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents................................ $ 432,718 $ 935,952 $ 486,531
Contract receivables, net of an allowance for doubtful
accounts of $5,000.................................... 1,408,108 2,179,878 2,020,074
Costs and estimated earnings in excess of billings....... 419,247 1,190,001 1,377,515
Other receivables from stockholder and employees......... 98,114 126,909 116,670
Inventories.............................................. 12,247 9,691 12,003
Prepaid expenses and other current assets................ 39,889 675
---------- ---------- ----------
Total current assets............................. 2,410,323 4,443,106 4,012,793
PROPERTY AND EQUIPMENT, net................................ 664,056 754,585 837,179
OTHER ASSETS............................................... 37,006 37,006 37,006
---------- ---------- ----------
TOTAL............................................ $3,111,385 $5,234,697 $4,886,978
========== ========== ==========
LIABILITIES AND STOCKHOLDER'S EQUITY
CURRENT LIABILITIES:
Accounts payable......................................... $ 583,445 $ 251,797 $ 281,427
Accrued payroll and payroll taxes........................ 48,212 81,950 125,672
Accrued workmen's compensation........................... 37,793 14,546 45,904
Accrued interest......................................... 42,400 1,389 1,325
Billings in excess of costs and estimated earnings....... 307,844 427,354 236,330
Current portion of long-term debt........................ 103,736 48,822 184,473
Current portion of capitalized lease obligations......... 32,299 29,596 26,128
---------- ---------- ----------
Total current liabilities........................ 1,155,729 855,454 901,259
LONG-TERM DEBT, net of current portion..................... 203,163 235,450 77,964
CAPITALIZED LEASE OBLIGATIONS, net of current portion...... 68,216 37,691 33,619
---------- ---------- ----------
Total............................................ 1,427,108 1,128,595 1,012,842
---------- ---------- ----------
COMMITMENTS AND CONTINGENCIES (Note 9)
STOCKHOLDER'S EQUITY:
Common stock, $1 par value; 100,000 shares authorized;
25,000 shares issued and outstanding.................. 25,000 25,000 25,000
Retained earnings........................................ 1,659,277 4,081,102 3,849,136
---------- ---------- ----------
Total............................................ 1,684,277 4,106,102 3,874,136
---------- ---------- ----------
TOTAL............................................ $3,111,385 $5,234,697 $4,886,978
========== ========== ==========
</TABLE>

See notes to financial statements.

F-63
<PAGE> 145

CYCLONE ROOFING COMPANY

STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEARS ENDED DECEMBER 31, MARCH 31,
-------------------------------------- -----------------------
1995 1996 1997 1997 1998
---------- ----------- ----------- ---------- ----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
CONTRACT REVENUES EARNED........... $9,242,737 $10,254,249 $16,057,460 $3,084,923 $2,828,887
COSTS OF CONTRACT REVENUES
EARNED........................... 7,618,135 8,537,692 12,523,599 2,583,706 2,457,334
---------- ----------- ----------- ---------- ----------
GROSS PROFIT....................... 1,624,602 1,716,557 3,533,861 501,217 371,553
SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES......................... 682,572 1,157,109 1,099,068 226,520 227,397
---------- ----------- ----------- ---------- ----------
INCOME FROM OPERATIONS............. 942,030 559,448 2,434,793 274,697 144,156
OTHER INCOME (EXPENSE):
Interest income.................. 4,448 16,200 2,576 6,709
Interest expense................. (29,161) (32,789) (40,847) (8,136) (5,799)
Other income, net................ 11,208 94,005 11,679 1,122 6,968
---------- ----------- ----------- ---------- ----------
NET INCOME............... $ 924,077 $ 625,112 $ 2,421,825 $ 270,259 $ 152,034
========== =========== =========== ========== ==========
</TABLE>

See notes to financial statements.

F-64
<PAGE> 146

CYCLONE ROOFING COMPANY

STATEMENTS OF STOCKHOLDER'S EQUITY

<TABLE>
<CAPTION>
COMMON STOCK
---------------- RETAINED
SHARES AMOUNT EARNINGS TOTAL
------ ------- ---------- ----------
<S> <C> <C> <C> <C>
BALANCE, JANUARY 1, 1995.............................. 25,000 $25,000 $ 450,088 $ 475,088
Net income.......................................... 924,077 924,077
Distributions to stockholder........................ (250,000) (250,000)
------ ------- ---------- ----------
BALANCE, DECEMBER 31, 1995............................ 25,000 25,000 1,124,165 1,149,165
Net income.......................................... 625,112 625,112
Distributions to stockholder........................ (90,000) (90,000)
------ ------- ---------- ----------
BALANCE, DECEMBER 31, 1996............................ 25,000 25,000 1,659,277 1,684,277
Net income.......................................... 2,421,825 2,421,825
------ ------- ---------- ----------
BALANCE, DECEMBER 31, 1997............................ 25,000 25,000 4,081,102 4,106,102
Net income (unaudited).............................. 152,034 152,034
Distributions to stockholder (unaudited)............ (384,000) (384,000)
------ ------- ---------- ----------
BALANCE, MARCH 31, 1998
(Unaudited)......................................... 25,000 $25,000 $3,849,136 $3,874,136
====== ======= ========== ==========
</TABLE>

See notes to financial statements.

F-65
<PAGE> 147

CYCLONE ROOFING COMPANY

STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEARS ENDED DECEMBER 31, MARCH 31,
---------------------------------- ---------------------
1995 1996 1997 1997 1998
--------- --------- ---------- --------- ---------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income..................................... $ 924,077 $ 625,112 $2,421,825 $ 270,259 $ 152,034
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation and amortization................ 76,774 120,582 154,225 38,077 41,944
Loss (gain) on disposal of assets............ 10,602 (1,077)
Changes in operating assets and liabilities:
Contract receivables, net.................. (25,579) (588,273) (771,770) (566,163) 159,804
Costs and estimated earnings in excess of
billings................................ (235,517) (115,695) (770,754) 66,573 (187,514)
Other receivables from stockholder and
employees............................... (95,960) 2,831 (28,795) (16,875) 10,239
Inventories................................ 3,889 392 2,556 (10,080) (2,312)
Prepaid expenses and other current
assets.................................. 10,597 (19,496) 39,214 28,492 675
Accounts payable........................... (117,499) 395,358 (331,648) 266,375 29,630
Accrued expenses........................... 24,892 48,327 (30,520) (34,084) 75,016
Billings in excess of costs and estimated
earnings................................ 116,273 (228,095) 119,510 (139,251) (191,024)
--------- --------- ---------- --------- ---------
Net cash provided by (used in) operating
activities............................ 681,947 241,043 814,445 (97,754) 88,492
--------- --------- ---------- --------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment............ (191,889) (293,896) (296,094) (179,092) (124,538)
Proceeds from sale of property and equipment... 40,738 16,500
--------- --------- ---------- --------- ---------
Net cash used in investing activities... (191,889) (293,896) (255,356) (162,592) (124,538)
--------- --------- ---------- --------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from the issuance of long-term debt... 40,000 23,177 590,000 120,000
Repayments of long-term debt................... (31,085) (42,787) (613,556) (36,561) (21,835)
Principal payments under capital lease
obligations.................................. (5,314) (32,299) (7,933) (7,540)
Distributions to stockholder................... (250,000) (90,000) (384,000)
--------- --------- ---------- --------- ---------
Net cash provided by (used in) financing
activities............................ (241,085) (114,924) (55,855) 75,506 (413,375)
--------- --------- ---------- --------- ---------
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS.................................... 248,973 (167,777) 503,234 (184,840) (449,421)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD... 351,522 600,495 432,718 432,718 935,952
--------- --------- ---------- --------- ---------
CASH AND CASH EQUIVALENTS, END OF PERIOD......... $ 600,495 $ 432,718 $ 935,952 $ 247,878 $ 486,531
========= ========= ========== ========= =========
SUPPLEMENTAL SCHEDULE OF NON-CASH FINANCING AND
INVESTING ACTIVITIES:
Equipment acquired through capital leases...... $ 111,646
=========
CASH PAYMENTS FOR:
Interest....................................... $ 19,391 $ 22,052 $ 81,858 $ 48,404 $ 5,863
========= ========= ========== ========= =========
</TABLE>

See notes to financial statements.

F-66
<PAGE> 148

CYCLONE ROOFING COMPANY

NOTES TO FINANCIAL STATEMENTS

1. GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

General -- Cyclone Roofing Company (the "Company") operates as a provider
of comprehensive roofing services to commercial, industrial, manufacturing,
construction and government customers. The Company also provides residential
roofing and remodeling services. The work is generally performed under
fixed-price contracts. The length of the Company's contracts varies, but
generally are less than one year. The Company's principal offices are located in
Matthews, North Carolina and the majority of the Company's business is
transacted with customers in North Carolina and South Carolina.

Interim Financial Information -- The interim financial statements as of
March 31, 1998 and for the three months ended March 31, 1997 and 1998 are
unaudited and certain information and footnote disclosures normally included in
annual financial statements prepared in accordance with generally accepted
accounting principles have been omitted. In the opinion of management, all
adjustments, consisting only of normal recurring items, necessary to fairly
present the financial position, results of operations, and cash flows with
respect to the interim financial statements, have been included. The results of
operations for the interim period are not necessarily indicative of the results
for an entire fiscal year.

Cash and Cash Equivalents -- The Company considers all highly liquid
investments purchased with an original maturity of three months or less to be
cash equivalents.

Contract Receivables -- The Company carries contract receivables at the
amounts it deems to be collectible. Accordingly, the Company provides allowances
for contract receivables it deems to be uncollectible based on management's best
estimates. Recoveries are recognized in the period they are received. The
ultimate amount of contract receivables that become uncollectible could differ
from those estimated.

Inventories -- Inventories consist primarily of materials and supplies and
are valued at the lower of cost, using the first-in, first-out method, or
market.

F-67
<PAGE> 149
CYCLONE ROOFING COMPANY

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

Property and Equipment -- Property and equipment are stated at cost less
accumulated depreciation. Property and equipment are reviewed for impairment and
a provision recorded, if necessary, whenever events or circumstances indicate
that the carrying amounts of an asset may not be recoverable. Routine repairs
and maintenance are expensed as incurred; improvements are capitalized at cost
and are amortized over the remaining useful life of the related asset.
Depreciation is recorded using straight-line methods over the estimated useful
lives of the related assets. Amortization of assets under capitalized leases is
computed using the straight-line method over the shorter of the estimated useful
lives of the respective assets or the lease agreement. Depreciation and
amortization is provided over the following estimated useful lives:

<TABLE>
<S> <C>
Building and improvements................................... 25 years
Service equipment........................................... 5 years
Machinery and equipment..................................... 5 to 7 years
Furniture and fixtures...................................... 5 years
Computer equipment.......................................... 5 to 7 years
Equipment under capitalized leases.......................... 7 years
</TABLE>

Warranties -- The Company provides for future estimated warranty
obligations in the period in which the related revenue is recognized.

Estimates made with respect to uncompleted projects are subject to change
as the project progresses and better estimates of project costs become
available. Revisions in cost and profit estimates during the course of the work
are reflected in the period in which the facts requiring revision become known.
Where a loss is forecast for a contract, the full amount of the anticipated loss
is recognized in the period in which it is determined that a loss will occur,
regardless of the stage of completion.

Income Taxes -- The Company is an S Corporation for federal and state
income tax purposes. Accordingly, the current taxable income of the Company is
taxable to the shareholder who is responsible for the payment of taxes thereon.

New Accounting Pronouncement -- Effective January 1, 1998, the Company
adopted Statement of Financial Accounting Standard No. 130, Reporting
Comprehensive Income. There are no significant differences between comprehensive
income and net income as reported in the Company's Statements of Operations.

F-68
<PAGE> 150
CYCLONE ROOFING COMPANY

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

2. CONTRACT RECEIVABLES

Contract receivables consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
-----------------------
1996 1997
---------- ----------
<S> <C> <C>
Completed contracts:
Retention................................................. $ 194,254 $ 134,094
Contracts in progress:
Current accounts.......................................... 1,076,720 1,451,861
Retention................................................. 142,134 598,923
---------- ----------
Subtotal.................................................. 1,413,108 2,184,878
Less: allowance for doubtful accounts..................... 5,000 5,000
---------- ----------
Contract receivables, net......................... $1,408,108 $2,179,878
========== ==========
</TABLE>

3. CONTRACTS IN PROGRESS

Information relative to contracts in progress is summarized as follows:

<TABLE>
<CAPTION>
DECEMBER 31,
------------------------
1996 1997
---------- -----------
<S> <C> <C>
Costs incurred on uncompleted contracts..................... $5,223,203 $10,257,311
Estimated earnings.......................................... 2,109,782 3,662,170
---------- -----------
Total............................................. 7,332,985 13,919,481
Less: billings to date.................................... 7,221,582 13,156,834
---------- -----------
Net under billings................................ $ 111,403 $ 762,647
========== ===========
</TABLE>

Included in the accompanying balance sheets under the following captions:

<TABLE>
<CAPTION>
DECEMBER 31,
----------------------
1996 1997
--------- ----------
<S> <C> <C>
Costs and estimated earnings in excess of billings.......... $ 419,247 $1,190,001
Billings in excess of costs and estimated earnings.......... (307,844) (427,354)
--------- ----------
Total............................................. $ 111,403 $ 762,647
========= ==========
</TABLE>

F-69
<PAGE> 151
CYCLONE ROOFING COMPANY

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

4. PROPERTY AND EQUIPMENT

Property and equipment consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
-----------------------
1996 1997
---------- ----------
<S> <C> <C>
Land........................................................ $ 40,000 $ 40,000
Building and improvements................................... 154,702 154,702
Service equipment........................................... 544,384 608,089
Machinery and equipment..................................... 525,544 706,056
Furniture and fixtures...................................... 18,871 18,871
Computer equipment.......................................... 29,288 29,288
---------- ----------
Subtotal.................................................... 1,312,789 1,557,006
Less: accumulated depreciation............................ 648,733 802,421
---------- ----------
Property and equipment, net....................... $ 664,056 $ 754,585
========== ==========
</TABLE>

Included in property and equipment are the following assets under
capitalized leases:

<TABLE>
<CAPTION>
DECEMBER 31,
-------------------
1996 1997
-------- --------
<S> <C> <C>
Equipment................................................... $104,900 $104,900
Less: accumulated depreciation............................ 7,975 23,924
-------- --------
Leased equipment, net............................. $ 96,925 $ 80,976
======== ========
</TABLE>

F-70
<PAGE> 152
CYCLONE ROOFING COMPANY

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

5. LONG-TERM DEBT AND NOTES PAYABLE

A summary of long-term debt is as follows:

<TABLE>
<CAPTION>
1996 1997
-------- --------
<S> <C> <C>
Mortgage payable due on February 11, 1999, bearing interest
at a fixed rate of 7.25%. Note is payable in monthly
payments of $1,734 of principal and interest and a balloon
payment of $149,468. Secured by land and building......... $167,005 $159,003
Loan payable to stockholder dated June 1992 with annual
interest payments at 10%. Unsecured....................... 75,000 8,746
Note payable due on July 10, 1999, bearing interest at a
fixed rate of 8.5%. Note is payable in monthly payments of
$618 of principal and interest. Secured by equipment...... 17,036 10,828
Note payable due on March 26, 1998, bearing interest at a
fixed rate of 8.99%. Note is payable in monthly payments
of $1,059 of principal and interest. Secured by
vehicle................................................... 14,968 3,129
Note payable due on January 15, 2002, bearing interest at a
fixed rate of 10.49%. Note is payable in monthly payments
of $2,582 of principal and interest. Secured by
equipment................................................. 102,566
Note payable due on May 5, 2000, bearing interest at a fixed
rate of 9.75%. Note is payable in monthly payments of $848
of principal and interest. Secured by vehicle............. 29,971
Note payable due on October 26, 1997, bearing interest at a
fixed rate of 8.79%. Note is payable in monthly payments
of $304 of principal and interest. Secured by vehicle..... 2,919
-------- --------
Total............................................. 306,899 284,272
Less: current portion..................................... 103,736 48,822
-------- --------
Total............................................. $203,163 $235,450
======== ========
Revolving line of credit for $250,000 due on demand,
bearing interest at a variable rate based on the prime
rate plus 0.5% (9.0% at December 31, 1997). Secured by
property and cash balances............................. $ --
========
</TABLE>

Interest accrued and unpaid on the loan payable to stockholder was $41,125
and $474 at December 31, 1996 and 1997, respectively. Interest expense on the
loan payable to stockholder was approximately $9,530, $10,560, and $3,720 for
the years ended December 31, 1995, 1996 and 1997, respectively.

Aggregate maturities of long-term debt for years ending December 31 are as
follows:

<TABLE>
<S> <C>
1998........................................................ $ 48,822
1999........................................................ 177,683
2000........................................................ 26,163
2001........................................................ 29,044
2002........................................................ 2,560
--------
Total............................................. $284,272
========
</TABLE>

F-71
<PAGE> 153
CYCLONE ROOFING COMPANY

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

6. CAPITALIZED LEASE OBLIGATIONS

The Company has entered into lease arrangements for certain equipment which
expire through the year 2000 with interest rates from 6.55% to 7.01%. The assets
have been capitalized and the obligations have been recorded as capitalized
lease obligations. As of December 31, 1997, approximate future minimum lease
payments (excluding interest) under capitalized lease obligations were as
follows for the years ending December 31:

<TABLE>
<S> <C>
1998........................................................ $29,596
1999........................................................ 19,358
2000........................................................ 18,333
-------
Present value of net future minimum lease payments.......... 67,287
Less: current portion of capitalized lease obligations.... 29,596
Long-term portion of capitalized lease obligations.......... $37,691
=======
</TABLE>

7. FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company's financial instruments consist of cash and cash equivalents,
accounts receivable, accounts and notes payable, debt, and capitalized lease
obligations. The carrying value of these financial instruments approximates fair
value because of their short duration or current interest rates. The Company
places its temporary cash investments with one financial institution. The
carrying value of debt and capitalized lease obligations approximates their fair
value based on current rates for borrowings of similar quality and terms.

Other financial instruments which potentially subject the Company to
significant concentrations of credit risk consist primarily of contract
receivables. The Company's customers are concentrated in the North Carolina and
South Carolina markets. The Company believes this concentration of credit risk
is mitigated by the diversity of industries represented by the Company's
customer base.

8. MAJOR CUSTOMERS

At December 31, 1996, $178,223 was due from one customer of the Company. At
December 31, 1997, $69,529, $103,429, and $408,420 was due from three customers
of the Company. For the years ended December 31, 1995 and 1996, sales of 21% and
16%, respectively, of total sales were made to one customer of the Company. For
the year ended December 31, 1997, sales of 12%, 10%, and 13% of total sales were
made to three customers of the Company.

9. COMMITMENTS AND CONTINGENCIES

10. SUBSEQUENT EVENT

In May 1998, the Company signed a stock purchase agreement with General
Roofing Services, Inc. (GRS) whereby GRS will acquire the Company for a
combination of cash and common shares of GRS concurrent with the consummation of
an initial public offering of the common stock of GRS, subject to certain
conditions including consummation of the offering.

* * * * * *

F-72
<PAGE> 154

INDEPENDENT AUDITORS' REPORT

To the Stockholders of
Wright-Brown Roofing Company:

We have audited the accompanying balance sheets of Wright-Brown Roofing
Company as of December 31, 1996 and 1997, and the related statements of
operations, stockholders' equity and cash flows for the years then ended. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

In our opinion, such financial statements present fairly, in all material
respects, the financial position of the Company as of December 31, 1996 and
1997, and the results of its operations and its cash flows for the years then
ended in conformity with generally accepted accounting principles.

DELOITTE & TOUCHE LLP

Atlanta, Georgia
April 29, 1998
(May 13, 1998 as to Note 12)

F-73
<PAGE> 155

WRIGHT-BROWN ROOFING COMPANY

BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 31,
----------------------- MARCH 31,
1996 1997 1998
---------- ---------- -----------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents................................ $ 441,430 $ 184,424 $ 252,882
Contract receivables, net of an allowance for doubtful
accounts of $13,000, $15,000, and $10,000,
respectively.......................................... 2,119,649 2,803,378 1,945,348
Costs and estimated earnings in excess of billings....... 189,451 367,816 291,221
Other receivables........................................ 3,562 2,500 3,250
Inventories.............................................. 199,725 184,165 198,313
---------- ---------- ----------
Total current assets............................. 2,953,817 3,542,283 2,691,014
PROPERTY AND EQUIPMENT, net................................ 821,755 803,576 789,537
OTHER ASSETS............................................... 162,307 157,069 217,725
---------- ---------- ----------
TOTAL............................................ $3,937,879 $4,502,928 $3,698,276
========== ========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable......................................... $1,179,690 $1,571,688 $1,086,870
Accrued expenses and other current liabilities........... 494,612 630,851 609,873
Billings in excess of costs and estimated earnings....... 123,450 123,316 97,813
Current portion of long-term debt........................ 21,600 34,096 33,657
Current portion of capitalized lease obligations......... 71,748 62,953 54,855
---------- ---------- ----------
Total current liabilities........................ 1,891,100 2,422,904 1,883,068
LONG-TERM DEBT, net of current portion..................... 63,001 66,705 58,339
CAPITALIZED LEASE OBLIGATIONS, net of current portion...... 76,005 33,386 22,025
---------- ---------- ----------
2,030,106 2,522,995 1,963,432
---------- ---------- ----------
COMMITMENTS AND CONTINGENCIES (Notes 10 and 11)
STOCKHOLDERS' EQUITY:
Common stock, $1 par value, 50,000 shares authorized,
5,000 shares issued and outstanding................... 5,000 5,000 5,000
Additional paid-in capital............................... 24,470 24,470 24,470
Retained earnings........................................ 1,878,303 1,950,463 1,705,374
---------- ---------- ----------
1,907,773 1,979,933 1,734,844
---------- ---------- ----------
TOTAL............................................ $3,937,879 $4,502,928 $3,698,276
========== ========== ==========
</TABLE>

See notes to financial statements.

F-74
<PAGE> 156

WRIGHT-BROWN ROOFING COMPANY

STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
-----------------------
1996 1997 1997 1998
----------- ----------- ---------- ----------
(UNAUDITED)
<S> <C> <C> <C> <C>
CONTRACT REVENUES EARNED...................... $12,819,966 $15,316,153 $2,134,788 $2,446,532
COSTS OF CONTRACT REVENUES EARNED............. 10,629,771 12,820,307 1,787,799 2,112,995
----------- ----------- ---------- ----------
GROSS PROFIT.................................. 2,190,195 2,495,846 346,989 333,537
SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES.................................... 1,284,843 1,392,972 393,121 306,439
----------- ----------- ---------- ----------
INCOME (LOSS) FROM OPERATIONS................. 905,352 1,102,874 (46,132) 27,098
OTHER INCOME (EXPENSE):
Interest income............................. 495 5,400 463 6
Interest expense............................ (68,383) (76,928) (15,306) (15,923)
Other income (expense), net................. (50,108) (75,678) 2,000
----------- ----------- ---------- ----------
NET INCOME (LOSS)................... $ 787,356 $ 955,668 $ (58,975) $ 11,181
=========== =========== ========== ==========
</TABLE>

See notes to financial statements.

F-75
<PAGE> 157

WRIGHT-BROWN ROOFING COMPANY

STATEMENTS OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
COMMON STOCK ADDITIONAL
--------------- PAID-IN RETAINED
SHARES AMOUNT CAPITAL EARNINGS TOTAL
------ ------ ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
BALANCE, JANUARY 1, 1996...................... 5,000 $5,000 $24,470 $1,945,088 $1,974,558
Net income.................................. 787,356 787,356
Distributions to stockholders............... (854,141) (854,141)
----- ------ ------- ---------- ----------
BALANCE, DECEMBER 31, 1996.................... 5,000 5,000 24,470 1,878,303 1,907,773
Net income.................................. 955,668 955,668
Distributions to stockholders............... (883,508) (883,508)
----- ------ ------- ---------- ----------
BALANCE, DECEMBER 31, 1997.................... 5,000 5,000 24,470 1,950,463 1,979,933
Net income (Unaudited)...................... 11,181 11,181
Distributions to stockholders (Unaudited)... (256,270) (256,270)
----- ------ ------- ---------- ----------
BALANCE, MARCH 31, 1998 (Unaudited)........... 5,000 $5,000 $24,470 $1,705,374 $1,734,844
===== ====== ======= ========== ==========
</TABLE>

See notes to financial statements.

F-76
<PAGE> 158

WRIGHT-BROWN ROOFING COMPANY

STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
---------------------
1996 1997 1997 1998
----------- --------- --------- ---------
(UNAUDITED)
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)............................. $ 787,356 $ 955,668 $ (58,975) $ 11,181
Adjustments to reconcile net income (loss) to
net cash provided by (used in) operating
activities:
Depreciation and amortization.............. 185,615 206,450 47,880 58,421
Loss (gain) on disposal of assets.......... (800) 4,310 (2,000)
Changes in operating assets and
liabilities:
Contract receivables, net................ 864,820 (683,729) 261,934 858,030
Costs and estimated earnings in excess of
billings.............................. (55,041) (178,365) (73,112) 76,595
Inventories.............................. (27,600) 15,560 3,721 (14,148)
Other receivables........................ (3,562) 1,062 (467) (750)
Other assets............................. (275) 5,238 958 (60,656)
Accounts payable and accrued expenses.... (132,479) 528,237 (191,852) (505,796)
Billings in excess of costs and estimated
earnings.............................. 8,320 (134) (39,559) (25,503)
----------- --------- --------- ---------
Net cash provided by (used in)
operating activities................ 1,626,354 854,297 (51,472) 397,374
----------- --------- --------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment........... (177,476) (178,438) (23,193) (44,382)
Proceeds from sale of property and
equipment.................................. 800 17,036 12,736
----------- --------- --------- ---------
Net cash used in investing
activities.......................... (176,676) (161,402) (10,457) (44,382)
----------- --------- --------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from the issuance of long-term
debt....................................... 37,800
Repayments of long-term debt.................. (190,177) (21,600) (5,400) (8,805)
Principal payments under capital lease
obligations................................ (70,508) (82,593) (24,813) (19,459)
Distributions to stockholders................. (854,141) (883,508) (109,668) (256,270)
----------- --------- --------- ---------
Net cash used in financing
activities.......................... (1,114,826) (949,901) (139,881) (284,534)
----------- --------- --------- ---------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS.............................. 334,852 (257,006) (201,810) 68,458
CASH AND CASH EQUIVALENTS, BEGINNING OF
PERIOD........................................ 106,578 441,430 441,430 184,424
----------- --------- --------- ---------
CASH AND CASH EQUIVALENTS, END OF PERIOD........ $ 441,430 $ 184,424 $ 239,620 $ 252,882
=========== ========= ========= =========
SUPPLEMENTAL SCHEDULE OF NON-CASH FINANCING AND
INVESTING ACTIVITIES:
Equipment acquired through capital leases..... $ 81,052 $ 31,179 $ 20,897 $
CASH PAYMENTS FOR:
Interest...................................... $ 68,383 $ 76,928 $ 15,306 $ 16,489
</TABLE>

See notes to financial statements.

F-77
<PAGE> 159

WRIGHT-BROWN ROOFING COMPANY

NOTES TO FINANCIAL STATEMENTS

1. GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

General -- Wright-Brown Roofing Company (the "Company") operates as a
provider of comprehensive roofing services to commercial, industrial,
manufacturing, construction and government customers. The Company also provides
residential roofing and remodeling services. The work is generally performed
under fixed-price contracts. The lengths of the Company's contracts vary, but
generally are less than one year. The Company's principal offices are located in
Detroit, Michigan and the majority of the Company's business is transacted with
customers in Michigan.

A majority of the Company's hourly employees are covered under a collective
bargaining agreement which expires June 1, 1998.

Cash and Cash Equivalents -- The Company considers all highly liquid
investments purchased with an original maturity of three months or less to be
cash equivalents.

Contract Receivables -- The Company carries contract receivables at the
amounts it deems to be collectible. Accordingly, the Company provides allowances
for contract receivables it deems to be uncollectible based on management's best
estimates. Recoveries are recognized in the period they are received. The
ultimate amount of contract receivables that become uncollectible could differ
from those estimated.

Inventories -- Inventories consist primarily of materials and supplies and
are valued at the lower of cost, using the first-in, first-out method, or
market.

F-78
<PAGE> 160
WRIGHT-BROWN ROOFING COMPANY

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

Property and Equipment -- Property and equipment are stated at cost less
accumulated depreciation. Routine repairs and maintenance are expensed as
incurred. Property and equipment are reviewed for impairment and a provision
recorded, if necessary, whenever events or circumstances indicate that the
carrying amount of an asset may not be recoverable. Significant improvements are
capitalized at cost and are amortized over the remaining useful life of the
related asset. Depreciation is recorded using the straight-line method over the
estimated useful lives of the related assets. Amortization of assets under
capitalized leases is computed using the straight-line method generally over the
estimated useful lives of the respective assets. Depreciation and amortization
is provided over the following estimated useful lives:

<TABLE>
<S> <C>
Buildings................................................ 15 to 31.5 years
Machinery and equipment.................................. 3 to 7 years
Transportation equipment................................. 5 years
Equipment under capitalized leases....................... 5 years
Office furniture and equipment........................... 5 to 7 years
</TABLE>

Warranties -- The Company provides for future estimated warranty
obligations in the period in which the related revenue is recognized.

Estimates made with respect to uncompleted projects are subject to change
as the project progresses and better estimates of project costs become
available. Revisions in cost and profit estimates during the course of the work
are reflected in the period in which the facts requiring revision become known.
Where a loss is forecast for a contract, the full amount of the anticipated loss
is recognized in the period in which it is determined that a loss will occur,
regardless of the stage of completion.

The asset, "Costs and estimated earnings in excess of billings," represents
revenue recognized in excess of amounts billed. The liability, "Billings in
excess of costs and estimated earnings," represents billings in excess of
revenues recognized.

F-79
<PAGE> 161
WRIGHT-BROWN ROOFING COMPANY

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

2. CONTRACT RECEIVABLES

Contract receivables consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
-----------------------
1996 1997
---------- ----------
<S> <C> <C>
Completed contracts:
Current accounts.......................................... $ 844,910 $1,418,118
Retention................................................. 69,576 131,503
Contracts in progress:
Current accounts.......................................... 1,147,061 1,126,041
Retention................................................. 71,102 142,716
---------- ----------
Subtotal.................................................... 2,132,649 2,818,378
Less: allowance for doubtful accounts..................... 13,000 15,000
---------- ----------
Contract receivables, net......................... $2,119,649 $2,803,378
========== ==========
</TABLE>

3. CONTRACTS IN PROGRESS

Information relative to contracts in progress is summarized as follows:

<TABLE>
<CAPTION>
DECEMBER 31,
-----------------------
1996 1997
---------- ----------
<S> <C> <C>
Costs incurred on uncompleted contracts..................... $1,613,639 $4,130,038
Estimated earnings.......................................... 313,657 801,315
---------- ----------
Total............................................. 1,927,296 4,931,353
Less: billings to date.................................... 1,861,295 4,686,853
---------- ----------
Net under-billings................................ $ 66,001 $ 244,500
========== ==========
</TABLE>

Included in the accompanying balance sheets under the following captions:

<TABLE>
<CAPTION>
DECEMBER 31,
---------------------
1996 1997
--------- ---------
<S> <C> <C>
Costs and estimated earnings in excess of billings.......... $ 189,451 $ 367,816
Billings in excess of costs and estimated earnings.......... (123,450) (123,316)
--------- ---------
Total............................................. $ 66,001 $ 244,500
========= =========
</TABLE>

F-80
<PAGE> 162
WRIGHT-BROWN ROOFING COMPANY

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

4. PROPERTY AND EQUIPMENT

Property and equipment consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
-----------------------
1996 1997
---------- ----------
<S> <C> <C>
Land........................................................ $ 34,770 $ 34,770
Buildings................................................... 257,220 257,220
Machinery and equipment..................................... 820,003 665,182
Transportation equipment.................................... 789,384 714,651
Office furniture and equipment.............................. 188,177 136,112
---------- ----------
Subtotal.................................................... 2,089,554 1,807,935
Less: accumulated depreciation............................ 1,267,799 1,004,359
---------- ----------
Property and equipment, net....................... $ 821,755 $ 803,576
========== ==========
</TABLE>

Included in property and equipment are the following assets under
capitalized leases:

<TABLE>
<CAPTION>
DECEMBER 31,
-------------------
1996 1997
-------- --------
<S> <C> <C>
Equipment................................................... $254,544 $213,926
Less: accumulated depreciation............................ 77,111 85,033
-------- --------
Leased equipment, net............................. $177,433 $128,893
======== ========
</TABLE>

5. LONG-TERM DEBT AND NOTES PAYABLE

A summary of long-term debt is as follows:

<TABLE>
<CAPTION>
DECEMBER 31,
------------------
1996 1997
------- --------
<S> <C> <C>
Note payable to a bank due November 2000, bearing interest
at 7.85%. Note is payable in monthly principal payments of
$1,800 plus interest. Secured by any items deposited in
any account with the bank................................. $84,601 $ 63,001
Notes payable to a financial institution due November 2000,
bearing interest at 2.9%. Notes are payable in total
monthly principal and interest payments of $1,118. Secured
by transportation equipment............................... 37,800
------- --------
Total............................................. 84,601 100,801
Less: current portion..................................... 21,600 34,096
------- --------
Long-term debt, net of current portion............ $63,001 $ 66,705
======= ========
</TABLE>

Aggregate maturities of long-term debt for years ending December 31 are as
follows:

<TABLE>
<S> <C>
1998........................................................ $ 34,096
1999........................................................ 34,464
2000........................................................ 32,241
--------
Total............................................. $100,801
========
</TABLE>

The Company also has a $500,000 revolving line of credit with a bank,
bearing interest at the bank's prime rate. The line is secured by any items
deposited in any account with the bank. At December 31, 1997, no amount was
outstanding under this line of credit.

F-81
<PAGE> 163
WRIGHT-BROWN ROOFING COMPANY

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

6. CAPITALIZED LEASE OBLIGATIONS

The Company has entered into lease arrangements for certain transportation
equipment which expire through November 2000 with interest at fixed rates. The
assets have been capitalized and the obligations have been recorded as
capitalized lease obligations. As of December 31, 1997, approximate future
minimum lease payments (excluding interest) under capitalized lease obligations
are as follows for each of the years ending December 31:

<TABLE>
<S> <C>
1998........................................................ $62,953
1999........................................................ 31,710
2000........................................................ 1,676
-------
Present value of net future minimum lease payments.......... 96,339
Less: current portion of capitalized lease obligations.... 62,953
-------
Long-term portion of capitalized lease
obligations...................................... $33,386
=======
</TABLE>

7. FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company's financial instruments consist of cash and cash equivalents,
contract receivables, accounts and notes payable, debt, and capitalized lease
obligations or current interest rates. The carrying value of these financial
instruments approximates fair value because of their short duration. The Company
places its temporary cash investments with financial institutions and limits the
amount of credit exposure with any one financial institution. The carrying value
of debt and capitalized lease obligations approximates their fair value based on
current rates for borrowings of similar quality and terms.

Other financial instruments, which potentially subject the Company to
significant concentrations of credit risk, consist primarily of contract
receivables. The Company's customers are concentrated in the Michigan market.
The Company believes this concentration of credit risk is mitigated by the
diversity of industries represented by the Company's customer base.

8. MAJOR CUSTOMERS

At December 31, 1996, contract receivables of $227,914 and $233,820,
respectively, were due from two customers of the Company. At December 31, 1997,
contract receivables of $351,536 were due from one other customer of the
Company. During the year ended December 31, 1997, sales of 11.5% of total sales
were made to one customer.

9. 401(K) PROFIT SHARING PLAN

The Company has a 401(k) profit sharing plan covering substantially all
non-union employees. Each year, participants may contribute up to 10% of pretax
annual compensation, not to exceed amounts allowable by the IRS. Discretionary
matching amounts may be contributed at the Company's option. During the years
ended December 31, 1996 and 1997, the Company contributed $10,556 and $19,386,
respectively.

10. EMPLOYMENT AGREEMENT

The Company maintains an employment agreement (the "Agreement") with a
certain officer of the Company. Under the terms of the Agreement, the employee
is entitled to an annual bonus of 5% of the Company's profits, if such profits
are in excess of specified limits, prior to any other employee bonus and prior
to the computation of income taxes, if any.

In addition, the Agreement provides for the awarding and potential
repurchase of Phantom Stock Rights, as defined. Under this provision, as of each
December 1, the employee shall receive common stock rights

F-82
<PAGE> 164
WRIGHT-BROWN ROOFING COMPANY

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

("Phantom Stock") equal to 2 1/2% of the sum of the issued and outstanding
common stock, the Phantom Stock to be awarded and any previously awarded Phantom
Stock. The total aggregate amount of Phantom Stock to be awarded shall not
exceed 25% of the sum of the issued and outstanding common stock and Phantom
Stock. Such shares of Phantom Stock shall be converted to shares of common stock
upon the employee's attainment of the age of 60 or the occurrence of the death
or permanent disability, as defined, of the principle stockholder. The Agreement
also provides for the repurchase of the Phantom Stock in the event of the
employee's death or permanent disability, a change of control, as defined, or
termination of employment, other than termination for cause, as defined. In the
event of repurchase, the purchase price of each share of Phantom Stock is to be
determined by dividing the Net Book Value of the Company, as defined, as of the
last day of the Company's fiscal year immediately prior to any such event, by
the sum of the issued and outstanding common stock and Phantom Stock.

The Company awarded 128 shares and 132 shares of Phantom Stock during the
years ended December 31, 1996 and 1997, respectively. The Company also recorded
compensation expense of $47,694 and $49,498 related to these awards in the years
ended December 31, 1996 and 1997, respectively. Should the Company be required
to repurchase the Phantom Stock prior to December 1, 1998, due to any of the
events described above (see also Note 12), the Company would be potentially
liable for such repurchase in the amount of $97,759.

11. COMMITMENTS AND CONTINGENCIES

The Company has entered into long-term operating lease arrangements
(expiring through December 1998) for certain automobiles. Rental expense for the
years ended December 31, 1996 and 1997 was $18,474 and $13,216, respectively.
The total commitment under these leases for the year ending December 31, 1998 is
$8,019.

12. SUBSEQUENT EVENT

On May 13, 1998, the Company signed a stock purchase agreement with General
Roofing Services, Inc. (GRS) whereby GRS will acquire the Company for a
combination of cash and common shares of GRS concurrent with the consummation of
an initial public offering of the common stock of GRS, subject to certain
conditions including consummation of the offering.

F-83
<PAGE> 165

INDEPENDENT AUDITORS' REPORT

To the Stockholders of:
Harrington-Scanlon Roofing Company, Inc.
H&S Investments, LLC
Architectural Sheet Metal, Inc.:

We have audited the accompanying combined balance sheet of
Harrington-Scanlon Roofing Company, Inc. and affiliates (the "Company"), as of
December 31, 1997, and the related combined statements of operations, owners'
equity and cash flows for the year ended December 31, 1997. The combined
financial statements include the accounts of Harrington-Scanlon Roofing Company,
Inc. and subsidiary and affiliate companies, H&S Investments, LLC and
Architectural Sheet Metal, Inc., which are under common control and management.
These combined financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these combined
financial statements based on our audit.

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

In our opinion, such combined financial statements present fairly, in all
material respects, the combined financial position of Harrington-Scanlon Roofing
Company, Inc. and affiliates, and the results of their operations and their cash
flows for the year ended December 31, 1997 in conformity with generally accepted
accounting principles.

DELOITTE & TOUCHE LLP

Dallas, Texas
May 15, 1998

F-84
<PAGE> 166

HARRINGTON-SCANLON ROOFING COMPANY, INC. AND AFFILIATES

COMBINED BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31,
1997 1998
------------ -----------
(UNAUDITED)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents................................. $ 29,838 $ 1,386
Contract receivables, net of an allowance for doubtful
accounts of $45,000 and $45,000, respectively.......... 3,095,651 2,376,687
Costs and estimated earnings in excess of billings........ 42,112 118,537
Inventories............................................... 237,888 241,731
Deferred income tax assets................................ 38,000 38,000
---------- ----------
Total current assets.............................. 3,443,489 2,776,341
PROPERTY AND EQUIPMENT, net................................. 1,074,877 1,057,025
OTHER ASSETS................................................ 73,417 79,795
---------- ----------
TOTAL............................................. $4,591,783 $3,913,161
========== ==========

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable.......................................... $1,664,018 $1,341,597
Accrued expenses and other current liabilities............ 344,528 226,722
Billings in excess of costs and estimated earnings........ 706,601 586,524
Current portion of long-term debt......................... 512,175 542,675
Current portion of capitalized lease obligations.......... 30,904 30,000
---------- ----------
Total current liabilities......................... 3,258,226 2,727,518
LONG-TERM DEBT, net of current portion...................... 848,936 833,867
CAPITALIZED LEASE OBLIGATIONS, net of current portion....... 86,646 79,500
---------- ----------
Total............................................. 4,193,808 3,640,885
---------- ----------
COMMITMENTS AND CONTINGENCIES (Note 11)
OWNERS' EQUITY:
Common stock.............................................. 2,000 2,000
Additional paid-in capital................................ 19,000 19,000
Retained earnings and members equity...................... 376,975 251,276
---------- ----------
Total............................................. 397,975 272,276
---------- ----------
TOTAL............................................. $4,591,783 $3,913,161
========== ==========
</TABLE>

See notes to combined financial statements.

F-85
<PAGE> 167

HARRINGTON-SCANLON ROOFING COMPANY, INC. AND AFFILIATES

COMBINED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEAR ENDED MARCH 31,
DECEMBER 31, -----------------------
1997 1997 1998
------------ ---------- ----------
(UNAUDITED)
<S> <C> <C> <C>
CONTRACT REVENUES EARNED................................. $11,815,850 $2,653,978 $2,368,456
COSTS OF CONTRACT REVENUES EARNED........................ 10,046,144 2,186,058 2,184,737
----------- ---------- ----------
GROSS PROFIT............................................. 1,769,706 467,920 183,719
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES............. 1,549,380 328,809 377,009
----------- ---------- ----------
INCOME (LOSS) FROM OPERATIONS............................ 220,326 139,111 (193,290)
----------- ---------- ----------
OTHER INCOME (EXPENSE):
Interest income........................................ 3,234
Interest expense....................................... (144,775) (22,007) (29,768)
Other income, net...................................... 40,249 42,154 3,063
----------- ---------- ----------
INCOME (LOSS) BEFORE INCOME TAXES........................ 119,034 159,258 (219,995)
----------- ---------- ----------
INCOME TAX PROVISION (BENEFIT)........................... 28,553 56,977 (94,296)
----------- ---------- ----------
NET INCOME (LOSS).............................. $ 90,481 $ 102,281 $ (125,699)
=========== ========== ==========
</TABLE>

See notes to combined financial statements.

F-86
<PAGE> 168

HARRINGTON-SCANLON ROOFING COMPANY, INC. AND AFFILIATES

COMBINED STATEMENTS OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
RETAINED
COMMON STOCK ADDITIONAL EARNINGS
--------------- PAID-IN AND MEMBERS'
SHARES AMOUNT CAPITAL CAPITAL TOTAL
------ ------ ---------- ------------ --------
<S> <C> <C> <C> <C> <C>
BALANCE, JANUARY 1, 1997...................... 2,000 $2,000 $19,000 $ 343,863 $364,863
Net income.................................. 90,481 90,481
Distributions to stockholders............... 57,369 57,369
----- ------ ------- --------- --------
BALANCE, DECEMBER 31, 1997.................... 2,000 2,000 19,000 376,975 397,975
Net loss (unaudited)........................ (125,699) (125,699)
----- ------ ------- --------- --------
BALANCE, MARCH 31, 1998
(unaudited)................................. 2,000 $2,000 $19,000 $ 251,276 $272,276
===== ====== ======= ========= ========
</TABLE>

See notes to combined financial statements.

F-87
<PAGE> 169

HARRINGTON-SCANLON ROOFING COMPANY, INC. AND AFFILIATES

COMBINED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEAR ENDED MARCH 31,
DECEMBER 31, ----------------------
1997 1997 1998
------------ ---------- ---------
(UNAUDITED)
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)........................................ $ 90,481 $ 102,2811 $(125,699)
Adjustments to reconcile net income (loss) to net cash
provided by operating activities:
Depreciation and amortization......................... 253,535 37,900 59,612
Deferred taxes........................................ (38,000) (2,000)
Changes in operating assets and liabilities:
Contract receivables, net........................... (133,884) 503,096 718,964
Costs and estimated earnings in excess billings..... (35,008) (334,458) (76,425)
Inventories......................................... (76,279) 39,003 (3,843)
Other current assets................................ (134) (4,391) (6,378)
Accounts payable and accrued expenses............... (116,387) (207,892) (440,227)
Billings in excess of costs and estimated
earnings......................................... 344,734 (154,919) (120,077)
--------- ---------- ---------
Net cash provided by operating activities........ 289,058 (21,380) 5,927
--------- ---------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES --
Purchases of property and equipment...................... (369,622) (201,508) (41,760)
--------- ---------- ---------
Net cash used in investing activities............ (369,622) (201,508) (41,760)
--------- ---------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from the issuance of long-term debt............. 356,490 225,519
Repayments of long-term debt............................. (192,497) (51,591) (67,794)
Principal payments under capital lease obligations....... (43,163) (1,788) (7,500)
Net borrowings under line of credit...................... 42,032 50,000 82,675
Distributions to stockholders............................ (57,369)
--------- ---------- ---------
Net cash provided by financing activities........ 105,493 222,140 7,381
--------- ---------- ---------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS....... 24,929 (748) (28,452)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD............. 4,909 4,909 29,838
--------- ---------- ---------
CASH AND CASH EQUIVALENTS, END OF PERIOD................... $ 29,838 $ 4,161 $ 1,386
========= ========== =========
SUPPLEMENTAL SCHEDULE OF NON-CASH
FINANCING AND INVESTING ACTIVITIES --
Equipment acquired through capital leases............. $ 148,146 $ 8,884
========= ==========
CASH PAYMENTS FOR:
Interest................................................. $ 125,033 $ 22,007 $ 53,486
Taxes.................................................... 34,738
</TABLE>

See notes to combined financial statements.

F-88
<PAGE> 170

HARRINGTON-SCANLON ROOFING COMPANY, INC. AND AFFILIATES

NOTES TO COMBINED FINANCIAL STATEMENTS

1. GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

General -- The combined financial statements include the consolidated
financial statements of Harrington-Scanlon Roofing Company, Inc. and its
wholly-owned subsidiary Harrington-Nissen Roofing Company, Inc., ("H-S"), H & S
Investments, LLC which is owned by the stockholders in H-S and Architectural
Sheet Metal, Inc. owned by the spouses of the stockholders of H-S (collectively,
the "Company"). The combined Company is under common management. The Company
operates as a provider of comprehensive roofing services to commercial,
construction and government customers. The work is generally performed under
fixed-price contracts. The length of the Company's contracts varies, but
generally are less than one year. The Company's principal offices are located in
Kansas City, Kansas and the majority of the Company's business is transacted
with customers in Missouri, Kansas and Arizona. A majority of the Company's
employees are covered by collective bargaining agreements.

The financial statements of the individual companies are combined for
presentation purposes. The capital structure of each entity as of December 31,
1997 is as follows:

<TABLE>
<CAPTION>
ADDITIONAL
COMMON PAID-IN
STOCK CAPITAL
------ ----------
<S> <C> <C>
Harrington-Scanlon Roofing Company, Inc. and subsidiary
common stock, par value $1: authorized 50,000 shares,
issued and outstanding 1,000 shares....................... $1,000 $10,000
Architectural Sheet Metal, Inc. common stock, par value $1:
authorized 1,000 shares, issued and outstanding 1,000
shares.................................................... 1,000 9,000
------ -------
$2,000 $19,000
====== =======
</TABLE>

Principles of Combination -- The combined financial statements include all
of the accounts of the Company. All significant intercompany balances and
transactions have been eliminated in combination.

Interim Financial Information -- The interim financial statements as of
March 31, 1998 and for the three months ended March 31, 1997 and 1998 are
unaudited and certain information and footnote disclosures normally included in
annual financial statements prepared in accordance with generally accepted
accounting principles have been omitted. In the opinion of management all
adjustments, consisting only of normal recurring items, necessary to fairly
present the financial position, results of operations, and cash flows with
respect to the interim financial statements have been included. The results of
operations for the interim period are not necessarily indicative of the results
for an entire fiscal year.

Cash and Cash Equivalents -- The Company considers all highly liquid
investments purchased with an original maturity of three months or less to be
cash equivalents.

Contract Receivables -- The Company carries contract receivables at the
amounts it deems to be collectible. Accordingly, the Company provides allowances
for contract receivables it deems to be uncollectible based on management's best
estimates. Recoveries are recognized in the period they are received. The
ultimate amount of contract receivables that become uncollectible could differ
from those estimated.

F-89
<PAGE> 171
HARRINGTON-SCANLON ROOFING COMPANY, INC. AND AFFILIATES

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

governments and well known local companies whose reputation is known to the
Company. Advance payments and progress payments are generally required for
significant projects. The Company generally has the ability to file liens
against the property if it is not paid on a timely basis.

Inventories -- Inventories consist primarily of materials and supplies and
are valued at the lower of cost or market using the first-in, first-out method.

Property and Equipment -- Property and equipment is stated at cost less
accumulated depreciation. Property and equipment are reviewed for impairment and
a provision recorded, if necessary, whenever events or circumstances indicate
that the carrying amount of an asset may not be recoverable. Routine repairs and
maintenance are expensed as incurred; improvements are capitalized at cost and
are amortized over the remaining useful life of the related asset. Depreciation
is recorded using accelerated and straight-line methods over the estimated
useful lives of the related assets. Amortization of assets under capitalized
leases is computed using the straight-line method over the shorter of the
estimated useful lives of the respective assets or the lease agreement.
Depreciation and amortization is provided over the following estimated useful
lives:

<TABLE>
<S> <C>
Building and improvements................................... 31.5 years
Vehicles.................................................... 3 to 5 years
Furniture and fixtures...................................... 5 to 7 years
Machinery and equipment..................................... 5 to 7 years
Computer equipment.......................................... 5 years
Equipment under capitalized leases.......................... 3 to 5 years
</TABLE>

Warranties -- The Company provides for future estimated warranty
obligations in the period in which the related revenue is recognized.

Estimates made with respect to uncompleted projects are subject to change
as the project progresses and better estimates of project costs become
available. Revisions in cost and profit estimates during the course of the work
are reflected in the period in which the facts requiring revision become known.
Where a loss is forecast for a contract, the full amount of the anticipated loss
is recognized in the period in which it is determined that a loss will occur,
regardless of the stage of completion.

Income Taxes -- H&S Investments is a limited liability company for federal
income tax purposes. Accordingly, the current taxable income of H&S Investments
is taxable to the shareholders who are responsible for the payment of taxes
thereon.

Harrington-Scanlon, Inc. and subsidiary and Architectural Sheet Metal, Inc.
reports income taxes pursuant to Statement of Financial Accounting Standards
(SFAS) No. 109, Accounting for Income Taxes. Under SFAS No. 109, income taxes
are provided for the tax effects of transactions reported in the financial
statements and consist of taxes currently due plus deferred taxes related to
certain income and expenses recognized in different periods for financial and
income tax reporting purposes. Deferred tax assets and

F-90
<PAGE> 172
HARRINGTON-SCANLON ROOFING COMPANY, INC. AND AFFILIATES

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

liabilities represent the future tax consequences of those differences. A
valuation allowance is provided if it is more likely than not that some portion
or all of the deferred tax assets will not be realized.

New Accounting Pronouncements -- Effective January 1, 1998 the Company
adopted Statement of Financial Accounting Standards (SFAS) No. 130, Reporting
Comprehensive Income. There are no significant differences between comprehensive
income and net income as reported in the Company's statements of operations.

2. CONTRACT RECEIVABLES

Contract receivables consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
1997
------------
<S> <C>
Current accounts............................................ $2,309,024
Retention................................................... 831,627
----------
Subtotal.................................................... 3,140,651
Less: allowance for doubtful accounts..................... 45,000
----------
Contract receivables, net......................... $3,095,651
==========
</TABLE>

3. CONTRACTS IN PROGRESS

Information relative to contracts in progress is summarized as follows:

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
1997
------------
<S> <C>
Costs incurred on uncompleted contracts..................... $3,365,291
Estimated earnings.......................................... 670,063
----------
Total............................................. 4,035,354
Less: billings to date.................................... 4,699,843
----------
Net over billings................................. $ (664,489)
==========
</TABLE>

Included in the accompanying balance sheets under the following captions:

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
1997
------------
<S> <C>
Costs and estimated earnings in excess of billings.......... $ 42,112

Billings in excess of costs and estimated earnings.......... (706,601)
---------
Total............................................. $(664,489)
=========
</TABLE>

F-91
<PAGE> 173
HARRINGTON-SCANLON ROOFING COMPANY, INC. AND AFFILIATES

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

4. PROPERTY AND EQUIPMENT

Property and equipment consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
1997
------------
<S> <C>
Land........................................................ $ 205,997
Building and improvements................................... 304,950
Vehicles.................................................... 793,472
Furniture and fixtures...................................... 62,272
Machinery and equipment..................................... 681,973
Computer equipment.......................................... 57,552
----------
Subtotal.................................................... 2,106,216
Less: accumulated depreciation............................ 1,031,339
----------
Property and equipment, net....................... $1,074,877
==========
</TABLE>

Included in property and equipment are the following assets under
capitalized leases:

<TABLE>
<CAPTION>
DECEMBER 31,
1997
------------
<S> <C>
Equipment................................................... $155,719
Less: accumulated depreciation............................ 32,652
--------
Leased equipment, net............................. $123,067
========
</TABLE>

Property and equipment are reviewed for impairment and a provision recorded
if necessary whenever events or circumstances indicate that the carrying amount
of an asset may not be recoverable.

5. NOTES PAYABLE

A summary of notes payable is as follows:

<TABLE>
<CAPTION>
DECEMBER 31,
1997
------------
<S> <C>
HARRINGTON-SCANLON
Note payable -- line of credit............................ $ 342,032
Note payable to bank due in June 2001, bearing interest at
8.5% at December 31, 1997. Note is payable in monthly
principal and interest payments of $558 and is secured
by equipment........................................... 20,328
Notes payable to finance institutions due between 1998 and
2001 bearing interest between 2.7% and 8.0%. Notes are
payable in monthly payments of $1,728 of principal and
interest and are secured by property and equipment..... 41,189
Note payable to bank due in March 2000, bearing interest
at 7.9% at December 31, 1997. Note is payable in
monthly principal and interest payments of $7,523 and
is secured by contract receivables, inventory and
equipment.............................................. 179,786
</TABLE>

F-92
<PAGE> 174
HARRINGTON-SCANLON ROOFING COMPANY, INC. AND AFFILIATES

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

<TABLE>
<CAPTION>
DECEMBER 31,
1997
------------
<S> <C>
HARRINGTON-NISSEN
Notes payable to banks due between 2000 and 2001, bearing
interest between 8.5% and 9.5% at December 31, 1997.
Notes are payable in monthly principal and interest
payments of $1,205 and are secured by property and
equipment.............................................. 42,741
Note payable to finance institution due in 2001 bearing
interest at 9.0%. Note is payable in monthly payments
of $351 of principal and interest and is secured by
equipment.............................................. 13,696
H&S INVESTMENTS
Notes payable to banks due between 1999 and 2026, bearing
interest between 7.75% and 9.75% at December 31, 1997.
Notes are payable in monthly principal and interest
payments of $7,456 and are secured by property and
equipment.............................................. 381,063
Notes payable to finance institutions due between 1998 and
2002 bearing interest between 8.75% and 10.5%. Notes
are payable in monthly payments of $2,426 of principal
and interest and are secured by property and
equipment.............................................. 53,062
Note payable -- land contract due in May 2000 bearing
interest at prime plus 2% (10.5% at December 31, 1997).
Note is payable in monthly installments of $5,269 and
is secured by the related land......................... 60,972
ARCHITECTURAL SHEET METAL
Notes payable to banks due between 2001 and 2002, bearing
interest between 7.75% and 10.25% at December 31, 1997.
Notes are payable in monthly principal and interest
payments of $3,268 and are secured by property and
equipment.............................................. 144,497
Note payable to finance institution due in December 2001
bearing interest at 8.5%. Note is payable in monthly
payments of $1,668 of principal and interest and is
secured by equipment................................... 81,745
----------
Total............................................. 1,361,111
Less: current portion..................................... 512,175
----------
Total............................................. $ 848,936
==========
</TABLE>

At December 31, 1997 Harrington-Scanlon had a line of credit for $350,000
bearing interest at Prime plus 2% (10.5% at December 31, 1997) and
collateralized by a first security interest in accounts receivable, a second
security interest in inventory and certain equipment and personal guarantees of
the Company's stockholders. The Small Business Administration ("SBA") guarantees
75% of the loan for an additional 0.25% fee on the outstanding balance.
Borrowings on the line were $342,032 at December 31, 1997.

Aggregate maturities of long-term debt for years ending December 31 are as
follows:

<TABLE>
<S> <C>
1998........................................................ $ 512,175
1999........................................................ 312,477
2000........................................................ 321,302
2001........................................................ 88,060
2002........................................................ 28,466
Thereafter.................................................. 98,630
----------
Total............................................. $1,361,110
==========
</TABLE>

F-93
<PAGE> 175
HARRINGTON-SCANLON ROOFING COMPANY, INC. AND AFFILIATES

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

The loan includes certain restrictive covenants including limitations on
dividends, capital stock transactions, affiliated transactions and distributions
of assets, see Note 13 for additional line of credit made available subsequent
to December 31, 1997.

6. CAPITALIZED LEASE OBLIGATIONS

The Company has entered into lease arrangements for certain vehicles which
expire through the year 2002 with interest at variable rates which are based on
changes in the prime interest rate (see Note 4). The assets have been
capitalized and the obligations have been recorded as capitalized lease
obligations. As of December 31, 1997, approximate future minimum lease payments
(excluding interest) under capitalized lease obligations were as follows for the
years ending December 31:

<TABLE>
<S> <C>
1998........................................................ $30,904
1999........................................................ 30,000
2000........................................................ 28,850
2001........................................................ 27,796
-------
Present value of net future minimum lease payments.......... 117,550
Less: current portion of capitalized lease obligations.... 30,904
-------
Long-term portion of capitalized lease obligations.......... $86,646
=======
</TABLE>

7. INCOME TAXES

The Company's provisions for income taxes consists of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
1997
------------
<S> <C>
Current:
Federal................................................... $56,570
State..................................................... 9,983
-------
66,553
-------
Deferred:
Federal................................................... (32,300)
State..................................................... (5,700)
-------
(38,000)
-------
$28,553
=======
</TABLE>

The difference between the statutory federal income tax rate and the
Company's effective tax rate is as follows:

<TABLE>
<CAPTION>
DECEMBER 31,
1997
-------------
<S> <C> <C>
Statutory federal tax rate.................................. $40,460 34%
State tax, net of federal benefit........................... 7,140 6
H&S Investments LLC Tax allocation.......................... (20,843) (18)
Net operating loss utilized................................. (5,909) (5)
Other....................................................... 7,705 7
------- ---
Effective rate.............................................. $28,553 24%
======= ===
</TABLE>

F-94
<PAGE> 176
HARRINGTON-SCANLON ROOFING COMPANY, INC. AND AFFILIATES

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

Components of the Company's deferred income tax assets are as follows:

<TABLE>
<CAPTION>
DECEMBER 31,
1997
------------
<S> <C>
Deferred tax assets:
Warranties................................................ $20,000
Allowance for doubtful accounts........................... 18,000
-------
Total deferred taxes.............................. $38,000
=======
</TABLE>

8. FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company's financial instruments consist of cash and cash equivalents,
contract receivables, accounts and notes payable, and current and long-term
capitalized lease obligations. The carrying value of cash and cash equivalents
approximates fair value because of their short duration. The Company places its
temporary cash investments with financial institutions and limits the amount of
credit exposure with any one financial institution. The carrying value of debt
and capitalized lease obligations approximates their fair value based on current
rates for borrowings of similar quality and terms.

Other financial instruments which potentially subject the Company to
significant concentrations of credit risk consist primarily of contract
receivables The Company's customers are concentrated in the Missouri, Kansas and
Arizona markets. The Company believes this concentration of credit risk is
mitigated by the diversity of industries represented by the Company's customer
base. At December 31, 1997, $519,711 was due from one customer of the Company.

9. PENSION PLAN

The Company has a simplified employee pension plan covering substantially
all non-union employees. Discretionary amounts may be contributed at the
Company's option based on years of service and employee compensation. During the
years ended December 31, 1997, no contributions were made to the plan.

10. COMMITMENTS AND CONTINGENCIES

11. SUBSEQUENT EVENTS

In January 1998, the Company obtained an additional line of credit facility
for $150,000 bearing interest at 10%. The facility is secured by accounts
receivable, inventory and certain equipment.

On May 12, 1998, the Company signed a stock purchase agreement with General
Roofing Services, Inc. (GRS) whereby GRS will acquire the Company for a
combination of cash and common shares of GRS concurrent with the consummation of
an initial public offering of the common stock of GRS, subject to certain
conditions including consummation of the offering.

* * * * * *

F-95
<PAGE> 177

INDEPENDENT AUDITORS' REPORT

To the Stockholders of
Slavik, Butcher & Baecker
Construction Company, Inc.:

We have audited the accompanying balance sheet of Slavik, Butcher & Baecker
Construction Company, Inc. as of June 30, 1997, and the related statements of
operations, stockholders' equity and cash flows for the year then ended. 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 audit.

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

In our opinion, such financial statements present fairly, in all material
respects, the financial position of the Company as of June 30, 1997, and the
results of its operations and its cash flows for the year then ended in
conformity with generally accepted accounting principles.

DELOITTE & TOUCHE LLP

Atlanta, Georgia
May 8, 1998
(May 13, 1998 as to Note 13)

F-96
<PAGE> 178

SLAVIK, BUTCHER & BAECKER CONSTRUCTION COMPANY, INC.

BALANCE SHEETS

<TABLE>
<CAPTION>
JUNE 30, MARCH 31,
1997 1998
---------- -----------
(UNAUDITED)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents................................. $ 62,697 $ 185,748
Contract receivables, net of an allowance for doubtful
accounts of $33,246 and $34,309, respectively.......... 939,665 1,475,488
Costs and estimated earnings in excess of billings........ 359,624 331,937
Other receivables......................................... 2,609 8,989
Due from stockholder...................................... 45,000
Prepaid expenses and other current assets................. 54,685 18,178
Refundable income taxes................................... 11,530
---------- ----------
Total current assets.............................. 1,430,810 2,065,340
PROPERTY AND EQUIPMENT, net................................. 308,578 365,969
OTHER ASSETS................................................ 29,018 30,793
---------- ----------
TOTAL............................................. $1,768,406 $2,462,102
========== ==========

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable.......................................... $ 895,668 $ 816,683
Accrued expenses and other current liabilities............ 156,784 291,916
Billings in excess of costs and estimated earnings........ 44,644 194,477
Note payable.............................................. 75,000 35,000
Current portion of long-term debt......................... 31,937 50,406
Current portion of capitalized lease obligation........... 20,124 20,124
Income taxes payable...................................... 16,862
Deferred tax liabilities.................................. 116,955 116,955
---------- ----------
Total current liabilities......................... 1,341,112 1,542,423
LONG-TERM DEBT, net of current portion...................... 36,893 80,615
CAPITALIZED LEASE OBLIGATION, net of current portion........ 54,519 37,374
DEFERRED TAX LIABILITIES.................................... 8,548 8,548
---------- ----------
1,441,072 1,668,960
---------- ----------
COMMITMENTS AND CONTINGENCIES (Note 12)
STOCKHOLDERS' EQUITY:
Common stock, $1 par value, 50,000 shares authorized,
10,000 shares issued and outstanding................... 10,000 10,000
Retained earnings......................................... 317,334 783,142
---------- ----------
327,334 793,142
---------- ----------
TOTAL............................................. $1,768,406 $2,462,102
========== ==========
</TABLE>

See notes to financial statements.

F-97
<PAGE> 179

SLAVIK, BUTCHER & BAECKER CONSTRUCTION COMPANY, INC.

STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEAR ENDED MARCH 31,
JUNE 30, ------------------------
1997 1997 1998
----------- ---------- ----------
(UNAUDITED)
<S> <C> <C> <C>
CONTRACT REVENUES EARNED.............................. $11,264,944 $8,494,369 $9,491,802
COSTS OF CONTRACT REVENUES EARNED..................... 9,927,627 7,476,627 7,744,014
----------- ---------- ----------
GROSS PROFIT.......................................... 1,337,317 1,017,742 1,747,788
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES.......... 1,215,085 897,177 1,074,936
----------- ---------- ----------
INCOME FROM OPERATIONS................................ 122,232 120,565 672,852
OTHER INCOME (EXPENSE):
Interest income..................................... 507 379 3
Interest expense.................................... (19,856) (14,892) (9,819)
Other income (expense), net......................... (1,338) (1,002) 1,426
----------- ---------- ----------
INCOME BEFORE INCOME TAXES............................ 101,545 105,050 664,462
INCOME TAX PROVISION.................................. 39,958 10,980 198,654
----------- ---------- ----------
NET INCOME.................................. $ 61,587 $ 94,070 $ 465,808
=========== ========== ==========
</TABLE>

See notes to financial statements.

F-98
<PAGE> 180

SLAVIK, BUTCHER & BAECKER CONSTRUCTION COMPANY, INC.

STATEMENTS OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
COMMON STOCK
---------------- RETAINED
SHARES AMOUNT EARNINGS TOTAL
------ ------- --------- --------
<S> <C> <C> <C> <C>
BALANCE, JULY 1, 1996.................................... 10,000 $10,000 $255,747 $265,747
Net income............................................. 61,587 61,587
------ ------- -------- --------
BALANCE, JUNE 30, 1997................................... 10,000 10,000 317,334 327,334
Net income (unaudited)................................. 465,808 465,808
------ ------- -------- --------
BALANCE, MARCH 31, 1998
(Unaudited)............................................ 10,000 $10,000 $783,142 $793,142
====== ======= ======== ========
</TABLE>

See notes to financial statements.

F-99
<PAGE> 181

SLAVIK, BUTCHER & BAECKER CONSTRUCTION COMPANY, INC.

STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEAR ENDED MARCH 31,
JUNE 30, ---------------------
1997 1997 1998
---------- --------- ---------
(UNAUDITED)
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income................................................ $ 61,587 $ 94,070 $ 465,808
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization.......................... 101,421 73,720 124,394
Deferred taxes......................................... 39,958 25,673
Changes in operating assets and liabilities:
Contract receivables, net............................ 42,093 (136,297) (535,823)
Costs and estimated earnings in excess of billings... (28,374) 221,085 27,687
Refundable income taxes.............................. 11,530
Other assets......................................... (4,087) 11,718 28,352
Accounts payable and accrued expenses................ (129,384) (179,315) 56,147
Billings in excess of costs and estimated earnings... (9,120) (15,990) 149,833
Income taxes payable................................. 16,862
--------- --------- ---------
Net cash provided by operating activities......... 74,094 94,664 344,790
--------- --------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment....................... (82,693) (80,346) (181,785)
Advance to stockholder.................................... (45,000)
--------- --------- ---------
Net cash used in investing activities............. (82,693) (80,346) (226,785)
--------- --------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings (repayments) on line of credit............. 18,550 (21,450) (40,000)
Proceeds from long-term debt.............................. 24,247 24,247 85,549
Repayments of long-term debt.............................. (26,105) (22,332) (23,358)
Principal payments under capital lease obligations........ (15,146) (9,160) (17,145)
--------- --------- ---------
Net cash provided by (used in) financing
activities...................................... 1,546 (28,695) 5,046
--------- --------- ---------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS........ (7,053) (14,377) 123,051
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD.............. 69,750 69,750 62,697
--------- --------- ---------
CASH AND CASH EQUIVALENTS, END OF PERIOD.................... $ 62,697 $ 55,373 $ 185,748
========= ========= =========
CASH PAYMENTS FOR:
Interest.................................................. $ 19,856 $ 14,892 $ 9,819
Taxes..................................................... $ $ $ 170,262
</TABLE>

See notes to financial statements.

F-100
<PAGE> 182

SLAVIK, BUTCHER & BAECKER CONSTRUCTION COMPANY, INC.

NOTES TO FINANCIAL STATEMENTS

1. GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

General -- Slavik, Butcher & Baecker Construction Company, Inc. (the
"Company") operates as a provider of general contractor construction services as
well as comprehensive roofing services to commercial, industrial, manufacturing,
construction and government customers. The Company also provides residential
roofing and remodeling services. The work is generally performed under
fixed-price contracts. The lengths of the Company's contracts vary, but
generally are less than one year. The Company's principal offices are located in
Rochester Hills, Michigan, and the majority of the Company's business is
transacted with customers in Michigan.

Interim Financial Information -- The interim financial statements as of
March 31, 1998 and for the nine months ended March 31, 1997 and 1998 are
unaudited and certain information and footnote disclosures normally included in
annual financial statements prepared in accordance with generally accepted
accounting principles have been omitted. In the opinion of management, all
adjustments, consisting only of normal recurring items, necessary to fairly
present the financial position, results of operations, and cash flows with
respect to the interim financial statements, have been included. The results of
operations for the interim period are not necessarily indicative of the results
for an entire fiscal year.

Cash and Cash Equivalents -- The Company considers all highly liquid
investments purchased with an original maturity of three months or less to be
cash equivalents.

Contract Receivables -- The Company carries contract receivables at the
amounts it deems to be collectible. Accordingly, the Company provides allowances
for contract receivables it deems to be uncollectible based on management's best
estimates. Recoveries are recognized in the period they are received. The
ultimate amount of contract receivables that become uncollectible could differ
from those estimated.

Credit Policy -- In the normal course of business, the Company provides
credit to its customers and does not generally require collateral. The Company
principally deals with recurring customers, state and local governments and well
known local companies whose reputation is known to the Company. Credit checks
are performed periodically on its customers' financial condition. The Company
generally has the ability to file liens against the property if it is not paid
on a timely basis.

Property and Equipment -- Property and equipment is stated at cost less
accumulated depreciation. Property and equipment are reviewed for impairment and
a provision recorded, if necessary, whenever events or circumstances indicate
that the carrying amount of an asset may not be recoverable. Routine repairs and
maintenance are expensed as incurred; significant improvements are capitalized
at cost and are amortized over the remaining useful life of the related asset.
Depreciation is recorded using accelerated and straight-line methods over the
estimated useful lives of the related assets. Amortization of assets under
capitalized leases is computed using the straight-line method over the shorter
of the estimated useful lives of the respective assets or the lease agreement.
Depreciation and amortization is provided over the following estimated useful
lives:

<TABLE>
<S> <C>
Construction equipment...................................... 5 years
Vehicles.................................................... 5 years
Office equipment............................................ 5 years
Leasehold improvements...................................... 31 years
Equipment under capitalized leases.......................... 5 years
</TABLE>

F-101
<PAGE> 183
SLAVIK, BUTCHER & BAECKER CONSTRUCTION COMPANY, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

Estimates made with respect to uncompleted projects are subject to change
as the project progresses and better estimates of project costs become
available. Revisions in cost and profit estimates during the course of the work
are reflected in the period in which the facts requiring revision become known.
Where a loss is forecast for a contract, the full amount of the anticipated loss
is recognized in the period in which it is determined that a loss will occur,
regardless of the stage of completion.

Income Taxes -- The Company reports income taxes pursuant to Statement of
Financial Accounting Standards (SFAS) No. 109, Accounting for Income Taxes.
Under SFAS No. 109, income taxes are provided for the tax effects of
transactions reported in the financial statements and consist of taxes currently
due plus deferred taxes related to certain income and expenses recognized in
different periods for financial and income tax reporting purposes. Deferred tax
assets and liabilities represent the future tax consequences of those
differences. Deferred taxes are also recognized for operating losses and tax
credits that are available to offset future taxable income and income taxes,
respectively. A valuation allowance is provided if it is more likely than not
that some portion or all of the deferred tax assets will not be realized.

New Accounting Pronouncement -- In June 1997, SFAS No. 130, Reporting
Comprehensive Income, was issued. SFAS No. 130 establishes standards for
reporting and display of comprehensive income and its components. SFAS No. 130
is effective for fiscal years beginning after December 15, 1997. The Company has
not adopted SFAS No. 130, but does not believe that the effects, if any, that
SFAS No. 130 will have on its financial statements would be significant.

2. CONTRACT RECEIVABLES

Contract receivables consist of the following:

<TABLE>
<CAPTION>
JUNE 30,
1997
--------
<S> <C>
Completed contracts:
Current accounts.......................................... $439,501
Retention................................................. 18,097
Contracts in progress:
Current accounts.......................................... 463,171
Retention................................................. 52,142
--------
Subtotal.................................................... 972,911
Less allowance for doubtful accounts...................... 33,246
--------
Contract receivables, net......................... $939,665
========
</TABLE>

F-102
<PAGE> 184
SLAVIK, BUTCHER & BAECKER CONSTRUCTION COMPANY, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

3. CONTRACTS IN PROGRESS

Information relative to contracts in progress is summarized as follows:

<TABLE>
<CAPTION>
JUNE 30,
1997
----------
<S> <C>
Costs incurred on uncompleted contracts..................... $1,890,329
Estimated earnings.......................................... 146,494
----------
Total............................................. 2,036,823
Less billings to date..................................... 1,721,843
----------
Net underbillings................................. $ 314,980
==========
</TABLE>

Included in the accompanying balance sheets under the following captions:

<TABLE>
<CAPTION>
JUNE 30,
1997
--------
<S> <C>
Costs and estimated earnings in excess of billings.......... $359,624
Billings in excess of costs and estimated earnings.......... (44,644)
--------
Total............................................. $314,980
========
</TABLE>

4. PROPERTY AND EQUIPMENT

Property and equipment consist of the following:

<TABLE>
<CAPTION>
JUNE 30,
1997
--------
<S> <C>
Construction equipment...................................... $221,869
Vehicles.................................................... 400,348
Office equipment............................................ 100,874
Leasehold improvements...................................... 59,671
--------
Subtotal.................................................... 782,762
Less accumulated depreciation............................. 474,184
--------
Property and equipment, net....................... $308,578
========
</TABLE>

Included in property and equipment are the following assets under
capitalized leases:

<TABLE>
<CAPTION>
JUNE 30,
1997
--------
<S> <C>
Equipment................................................... $106,034
Less: accumulated depreciation............................ 57,771
--------
Leased equipment, net............................. $ 48,263
========
</TABLE>

F-103
<PAGE> 185
SLAVIK, BUTCHER & BAECKER CONSTRUCTION COMPANY, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

5. LONG-TERM DEBT AND NOTES PAYABLE

A summary of long-term debt is as follows:

<TABLE>
<CAPTION>
JUNE 30,
1997
--------
<S> <C>
Note payable to a financial institution, due April 1999,
bearing interest at 11.5%, with monthly principal and
interest payments of $830. Secured by a vehicle. ......... $14,264
Note payable to a financial institution, due March 2001,
bearing interest at 9.25%, with monthly principal and
interest payments of $606. Secured by a vehicle. ......... 22,983
Various loans payable to a bank, due through fiscal year
2000, bearing interest at rates ranging from 8.75% to
10.25%. Secured by vehicles. ............................. 31,583
-------
Total............................................. 68,830
Less: current portion....................................... 31,937
-------
Long-term debt, net of current portion............ $36,893
=======
</TABLE>

The Company has a revolving line of credit facility from a bank. Borrowings
under this facility are bearing interest at a variable rate based on the
lender's index rate (10% at June 30, 1997). Outstanding borrowings at June 30,
1997 were $75,000 and were secured by contract receivables and equipment. Total
available unused line as of June 30, 1997 was $175,000.

The Company has an additional unused line of credit with a bank of
$100,000, available at 1 3/4% above the lender's prime rate.

Aggregate maturities of long-term debt for years ending June 30 are as
follows:

<TABLE>
<S> <C>
1998........................................................ $31,937
1999........................................................ 23,752
2000........................................................ 11,974
2001........................................................ 1,167
-------
Total............................................. $68,830
=======
</TABLE>

6. CAPITALIZED LEASE OBLIGATION

The Company has entered into a lease arrangement for a certain vehicle
which expires July 31, 2000 with interest at 9.75%. The asset has been
capitalized and the obligation has been recorded as a capitalized lease
obligation. As of June 30, 1997, approximate future minimum lease payments
(excluding interest) under this capitalized lease obligation were as follows for
years ending June 30:

<TABLE>
<S> <C>
1998........................................................ $20,124
1999........................................................ 20,978
2000........................................................ 33,541
-------
Present value of net future minimum lease payments.......... 74,643
Less: current portion of capitalized lease obligations.... 20,124
-------
Long-term portion of capitalized lease obligations.......... $54,519
=======
</TABLE>

7. INCOME TAXES

The Company's provision for income taxes for the year ended June 30, 1997
consists of deferred federal income tax expense of $39,958.

F-104
<PAGE> 186
SLAVIK, BUTCHER & BAECKER CONSTRUCTION COMPANY, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

The difference between the statutory federal income tax rate and the
Company's effective tax rate is as follows:

<TABLE>
<CAPTION>
JUNE 30,
1997
--------
<S> <C>
Statutory federal tax rate.................................. 34%
Nondeductible meals and entertainment....................... 2
Nondeductible officers' life insurance...................... 2
Other....................................................... 1
--
39%
==
</TABLE>

Components of the Company's deferred tax liabilities are as follows:

<TABLE>
<CAPTION>
JUNE 30,
1997
--------
<S> <C>
Deferred tax assets:
Net operating loss carryforwards.......................... $ 21,169
Allowance for doubtful accounts........................... 11,304
Other..................................................... 2,125
--------
Total............................................. 34,598
--------
Deferred tax liabilities:
Contracts in progress..................................... 145,008
Operating versus capital lease treatment.................. 10,673
Other..................................................... 4,420
--------
Total............................................. 160,101
--------
Net deferred tax liability........................ $125,503
========
</TABLE>

8. FAIR VALUE OF FINANCIAL INSTRUMENTS

Other financial instruments which potentially subject the Company to
significant concentrations of credit risk consist primarily of contract
receivables. The Company's customers are concentrated in the Michigan market.
The Company believes this concentration of credit risk is mitigated by the
diversity of industries represented by the Company's customer base.

9. MAJOR CUSTOMERS

At June 30, 1997, $130,251, $111,462, $134,350 and $164,891, respectively,
were due from four customers of the Company. For the year ended June 30, 1997,
sales of 17% of total sales were made to one customer of the Company.

10. 401(K) PROFIT SHARING PLAN

F-105
<PAGE> 187
SLAVIK, BUTCHER & BAECKER CONSTRUCTION COMPANY, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

plan. Discretionary matching amounts may be contributed at the Company's option.
During the year ended June 30, 1997, the Company contributed $28,979.

11. RELATED PARTY TRANSACTIONS

The Company leases its facilities under a long-term lease arrangement
(expiring March 2000) with an entity owned by the Company's stockholders. The
following are the Company's commitments with respect to this lease for the years
ending June 30:

<TABLE>
<S> <C>
1998........................................................ $ 78,000
1999........................................................ 78,000
2000........................................................ 78,000
--------
Total............................................. $234,000
========
</TABLE>

The Company paid rents of $78,000 related to this lease during the year
ended June 30, 1997.

In addition, the Company paid $273,400 in consulting fees during the year
ended June 30, 1997 to its stockholders.

12. COMMITMENTS AND CONTINGENCIES

The Company has entered into a long-term lease arrangement (expiring
November 1999) for warehouse facilities. The following are the Company's
commitments with respect to this lease for years ending June 30:

<TABLE>
<S> <C>
1998........................................................ $18,456
1999........................................................ 18,456
2000........................................................ 7,690
-------
Total............................................. $44,602
=======
</TABLE>

13. SUBSEQUENT EVENT

F-106
<PAGE> 188

INDEPENDENT AUDITORS' REPORT

To the Stockholder of
Five K Industries, Inc. and Subsidiary:

We have audited the accompanying consolidated balance sheet of Five K
Industries, Inc. and subsidiary (the "Company") as of March 31, 1998, and the
related consolidated statements of operations, stockholder's equity and cash
flows for the year then ended. 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 audit.

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

In our opinion, such financial statements present fairly, in all material
respects, the consolidated financial position of Five K Industries, Inc. and
subsidiary as of March 31, 1998 and the results of their operations and their
cash flows for the year then ended in conformity with generally accepted
accounting principles.

DELOITTE & TOUCHE LLP

Atlanta, Georgia
April 30, 1998
(May 19, 1998 as to Note 12)

F-107
<PAGE> 189

INDEPENDENT AUDITORS' REPORT

To the Stockholder of
Five K Industries, Inc. and Subsidiary:

We have audited the accompanying consolidated balance sheet of Five K
Industries, Inc. and subsidiary (the "Company") as of March 31, 1997, and the
related consolidated statements of operations, stockholder's equity and cash
flows for each of the two years in the period ended March 31, 1997. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

In our opinion, such financial statements present fairly, in all material
respects, the consolidated financial position of the Company as of March 31,
1997, and the results of their operations and their cash flows for each of the
two years in the period ended March 31, 1997 in conformity with generally
accepted accounting principles.

BEARDEN & SMITH, P.C.

Atlanta, Georgia
April 28, 1997

F-108
<PAGE> 190

FIVE K INDUSTRIES, INC. AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
MARCH 31,
-----------------------
1997 1998
---------- ----------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents................................. $ 312,292 $ 696,417
Contract receivables, net of an allowance for doubtful
accounts of $29,481 and $18,500, respectively.......... 1,752,465 1,715,404
Costs and estimated earnings in excess of billings........ 57,838 16,850
Other receivables......................................... 28,193 11,236
Due from related parties.................................. -- 25,000
Inventories............................................... 3,694 35,700
Refundable income taxes................................... 217,297 --
---------- ----------
Total current assets.............................. 2,371,779 2,500,607
PROPERTY AND EQUIPMENT, net................................. 287,401 374,120
DEFERRED TAX ASSETS......................................... 5,730 --
OTHER ASSETS................................................ 97,862 97,349
---------- ----------
TOTAL............................................. $2,762,772 $2,972,076
========== ==========

LIABILITIES AND STOCKHOLDER'S EQUITY
CURRENT LIABILITIES:
Accounts payable.......................................... $ 563,341 $ 427,628
Accrued expenses and other current liabilities............ 372,361 376,535
Income taxes payable...................................... 228,581
Billings in excess of costs and estimated earnings........ 263,904 121,314
Current portion of long-term debt......................... -- 40,114
Deferred tax liabilities.................................. 441,750 360,346
---------- ----------
Total current liabilities......................... 1,641,356 1,554,518
LONG-TERM DEBT, net of current portion...................... -- 46,378
DEFERRED TAX LIABILITIES.................................... -- 15,334
---------- ----------
Total............................................. 1,641,356 1,616,230
---------- ----------
COMMITMENTS AND CONTINGENCIES (Note 11)
STOCKHOLDER'S EQUITY:
Common stock, 100,000 shares authorized, $1.00 par value,
7,800 shares outstanding............................... 7,800 7,800
Additional paid-in capital................................ 30,031 30,031
Retained earnings......................................... 1,083,585 1,318,015
---------- ----------
Total............................................. 1,121,416 1,355,846
---------- ----------
TOTAL............................................. $2,762,772 $2,972,076
========== ==========
</TABLE>

See notes to consolidated financial statements.

F-109
<PAGE> 191

FIVE K INDUSTRIES, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
YEARS ENDED MARCH 31,
--------------------------------------
1996 1997 1998
----------- ---------- -----------
<S> <C> <C> <C>
CONTRACT REVENUES EARNED................................. $10,402,374 $9,360,861 $11,091,546
COSTS OF CONTRACT REVENUES EARNED........................ 8,053,314 6,520,807 7,879,086
----------- ---------- -----------
GROSS PROFIT............................................. 2,349,060 2,840,054 3,212,460
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES............. 2,225,794 2,652,257 2,775,241
----------- ---------- -----------
INCOME FROM OPERATIONS................................... 123,266 187,797 437,219
OTHER INCOME (EXPENSE):
Interest income........................................ 14,104
Interest expense....................................... (5,149) (3,010) (5,094)
Other income, net...................................... 30,848 16,625 22,650
----------- ---------- -----------
INCOME BEFORE INCOME TAXES............................... 148,965 201,412 468,879
INCOME TAX PROVISION..................................... 44,000 80,000 209,449
----------- ---------- -----------
NET INCOME..................................... $ 104,965 $ 121,412 $ 259,430
=========== ========== ===========
</TABLE>

See notes to consolidated financial statements.

F-110
<PAGE> 192

FIVE K INDUSTRIES, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY

<TABLE>
<CAPTION>
COMMON STOCK ADDITIONAL
--------------- PAID-IN RETAINED
AMOUNT SHARES CAPITAL EARNINGS TOTAL
------ ------ ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
BALANCE, APRIL 1, 1995........................ $7,800 7,800 $30,031 $ 894,708 $ 932,539
Net income.................................. 104,965 104,965
Distributions to owner...................... -- -- -- (6,250) (6,250)
------ ----- ------- ---------- ----------
BALANCE, MARCH 31, 1996....................... 7,800 7,800 30,031 993,423 1,031,254
Net income.................................. 121,412 121,412
Distributions to owner...................... -- -- -- (31,250) (31,250)
------ ----- ------- ---------- ----------
BALANCE, MARCH 31, 1997....................... 7,800 7,800 30,031 1,083,585 1,121,416
Net income.................................. 259,430 259,430
Distributions to owner...................... -- -- -- (25,000) (25,000)
------ ----- ------- ---------- ----------
BALANCE, MARCH 31, 1998....................... $7,800 7,800 $30,031 $1,318,015 $1,355,846
====== ===== ======= ========== ==========
</TABLE>

See notes to consolidated financial statements.

F-111
<PAGE> 193

FIVE K INDUSTRIES, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
YEARS ENDED MARCH 31,
-----------------------------------
1996 1997 1998
----------- --------- ---------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income............................................... $ 104,965 $ 121,412 $ 259,430
Adjustments to reconcile net income to net cash provided
by (used in) operating activities:
Depreciation and amortization......................... 72,391 89,552 132,308
Loss (gain) on disposal of assets..................... (14,134) 11,621 --
Deferred taxes........................................ (211,786) 234,296 (60,340)
Changes in operating assets and liabilities:
Contract receivables, net............................. (1,137,937) 464,845 37,061
Costs and estimated earnings in excess of billings.... (6,254) (51,584) 40,988
Due from related parties.............................. (25,000)
Inventories........................................... (6,901) 8,217 (32,006)
Other receivables..................................... (30,156) 39,341 17,470
Accounts payable, accrued expenses, other current
liabilities and income taxes........................ 1,054,345 (995,807) 314,339
Billings in excess of costs and estimated earnings....... 115,271 109,410 (142,590)
----------- --------- ---------
Net cash provided by (used in) operating
activities..................................... (60,196) 31,303 541,660
----------- --------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment...................... (118,048) (92,057) (219,027)
Proceeds from sale of property and equipment............. 14,134 19,500 --
Other.................................................... -- (75,000) --
----------- --------- ---------
Net cash used in investing activities............ (103,914) (147,557) (219,027)
----------- --------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from the issuance of long-term debt............. 50,569 -- 108,792
Repayments of long-term debt............................. (59,667) (58,996) (22,300)
Distributions to stockholder............................. (6,250) (31,250) (25,000)
----------- --------- ---------
Net cash provided by (used in) financing
activities..................................... (15,348) (90,246) 61,492
----------- --------- ---------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS....... (179,458) (206,500) 384,125
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR............... 698,250 518,792 312,292
----------- --------- ---------
CASH AND CASH EQUIVALENTS, END OF YEAR..................... $ 518,792 $ 312,292 $ 696,417
=========== ========= =========
CASH PAYMENTS FOR (RECEIPTS FROM):
Interest................................................. $ 5,149 $ 3,010 $ 6,044
Taxes.................................................... $ 69,740 $ 288,101 $(153,822)
</TABLE>

See notes to consolidated financial statements.

F-112
<PAGE> 194

FIVE K INDUSTRIES, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

General -- Five K Industries, Inc. and subsidiary (collectively, the
"Company") operates as a provider of comprehensive roofing services to
commercial, industrial, manufacturing, construction and government customers.
The work is generally performed under fixed-price contracts. The length of the
Company's contracts varies, but generally are less than one year. The Company's
principal offices are located in Smyrna, Georgia and the majority of the
Company's business is transacted with customers in Georgia. A majority of the
Company's hourly employees are covered by collective bargaining agreements,
which expire June 30, 1998 and July 31, 2000.

Principles of Consolidation -- The consolidated financial statements
include all of the accounts of the Company. All significant intercompany
balances and transactions have been eliminated in consolidation.

Cash and Cash Equivalents -- The Company considers all highly liquid
investments purchased with an original maturity of three months or less to be
cash equivalents.

Contract Receivables -- The Company carries contract receivables at the
amounts it deems to be collectible. Accordingly, the Company provides allowances
for contract receivables it deems to be uncollectible based on management's best
estimates. Recoveries are recognized in the period they are received. The
ultimate amount of contract receivables that become uncollectible could differ
from those estimated.

Credit Policy -- In the normal course of business, the Company provides
credit to its customers and does not generally require collateral. The Company
principally deals with recurring customers whose reputation is known to the
Company. Advance payments and progress payments are generally required for
significant projects. The Company generally has the ability to file liens
against the property if it is not paid on a timely basis.

Inventories -- Inventories consist primarily of materials and supplies and
are valued at the lower of cost, using the first-in, first-out method, or
market.

Property and Equipment -- Property and equipment are stated at cost less
accumulated depreciation. Routine repairs and maintenance are expensed as
incurred; improvements are capitalized at cost and are amortized over the
remaining useful life of the related asset. Property and equipment are reviewed
for impairment and a provision recorded, if necessary, whenever events or
circumstances indicate that the carrying amount of an asset may not be
recoverable. Depreciation is recorded using accelerated methods over the
estimated useful lives of the related assets. Depreciation and amortization is
provided over the following estimated useful lives:

<TABLE>
<S> <C>
5 years
Vehicles....................................................
5 to 10 years
Leasehold improvements......................................
5 to 7 years
Machinery and equipment.....................................
5 to 7 years
Furniture and fixtures......................................
</TABLE>

Contract costs include all direct material and labor costs and those
indirect costs related to contract performance such as indirect labor, supplies,
and tools. Selling, general, and administrative costs are charged to expense as
incurred. Costs for materials incurred at the inception of a project, which are
not reflective of
F-113
<PAGE> 195
FIVE K INDUSTRIES, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

effort, are excluded from the percentage of completion calculation for purposes
of determining profits on uncompleted contracts.

Estimates made with respect to uncompleted projects are subject to change
as the project progresses and better estimates of project costs become
available. Revisions in cost and profit estimates during the course of the work
are reflected in the period in which the facts requiring revision become known.
Where a loss is forecast for a contract, the full amount of the anticipated loss
is recognized in the period in which it is determined that a loss will occur,
regardless of the stage of completion.

Reclassification -- Certain amounts in the 1996 and 1997 financial
statements have been reclassified to conform to the 1998 presentation.

2. CONTRACT RECEIVABLES

Contract receivables consist of the following:

<TABLE>
<CAPTION>
MARCH 31,
-----------------------
1997 1998
---------- ----------
<S> <C> <C>
Completed contracts, including retention.................... $ 200,550 $ 298,075
Contracts in progress:
Current accounts.......................................... 1,070,834 816,724
Retention................................................. 510,562 619,105
---------- ----------
1,781,946 1,733,904
Subtotal
Less: allowance for doubtful accounts....................... 29,481 18,500
---------- ----------
Contract receivables, net......................... $1,752,465 $1,715,404
========== ==========
</TABLE>

3. CONTRACTS IN PROGRESS

Information relative to contracts in progress is summarized as follows:

<TABLE>
<CAPTION>
MARCH 31,
-----------------------
1997 1998
---------- ----------
<S> <C> <C>
Costs incurred on uncompleted contracts..................... $2,883,371 $3,164,782
Estimated earnings.......................................... 1,469,633 1,082,867
---------- ----------
Total....................................................... 4,353,004 4,247,649
Less: billings to date...................................... 4,559,070 4,352,113
---------- ----------
Net over-billings................................. $ (206,066) $ (104,464)
========== ==========
</TABLE>

F-114
<PAGE> 196
FIVE K INDUSTRIES, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Included in the accompanying balance sheets under the following captions:

<TABLE>
<CAPTION>
MARCH 31,
---------------------
1997 1998
--------- ---------
<S> <C> <C>
Costs and estimated earnings in excess of billings.......... $ 57,838 $ 16,850
Billings in excess of costs and estimated earnings.......... (263,904) (121,314)
--------- ---------
Total............................................. $(206,066) $(104,464)
========= =========
</TABLE>

4. PROPERTY AND EQUIPMENT

Property and equipment consists of the following:

<TABLE>
<CAPTION>
MARCH 31,
---------------------
1997 1998
-------- ----------
<S> <C> <C>
Vehicles.................................................... $529,323 $ 712,126
Leasehold improvements...................................... 23,813 23,835
Machinery and equipment..................................... 214,138 250,340
Furniture and fixtures...................................... 33,352 33,352
-------- ----------
Subtotal.................................................... 800,626 1,019,653
Less: accumulated depreciation.............................. 513,225 645,533
-------- ----------
Property and equipment, net....................... $287,401 $ 374,120
======== ==========
</TABLE>

5. LINE OF CREDIT FACILITY AND LONG-TERM DEBT

On October 15, 1996, the Company entered into a line of credit agreement
(the "1996 Line of Credit") with a financial institution, which allowed the
Company to borrow up to $200,000. Interest was payable monthly at prime rate
plus 1% (prime rate at March 31, 1997 was 8.5%). The 1996 Line of Credit was
secured by the Company's accounts receivable. There were no borrowings on the
1996 Line of Credit as of March 31, 1997 and it matured on October 15, 1997.

On October 15, 1997, concurrent with the expiration of the 1996 Line of
Credit, the Company entered into another line of credit agreement (the "1997
Line of Credit") with terms and conditions similar to the 1996 Line of Credit.
There were no borrowings on the 1997 Line of Credit as of March 31, 1998 and it
matures on October 15, 1998.

A summary of the Company's long-term debt is as follows:

<TABLE>
<CAPTION>
MARCH 31,
1998
---------
<S> <C>
Note payable due on April 1, 1999, bearing interest at a
fixed rate of 9.25%. Note is payable in monthly
installments of $1,313 of principal and interest. Secured
by certain fixed assets................................... $16,179
Note payable due on October 15, 2000, bearing interest at a
fixed rate of 9.5%. Note is payable in monthly payments of
$2,567 of principal and interest. Secured by certain fixed
assets.................................................... 70,313
-------
Total............................................. 86,492
Less: current portion....................................... 40,114
-------
Total............................................. $46,378
=======
</TABLE>

F-115
<PAGE> 197
FIVE K INDUSTRIES, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Aggregate maturities of long-term debt for years ending March 31 are as
follows:

<TABLE>
<S> <C>
1999........................................................ $40,114
2000........................................................ 28,978
2001........................................................ 17,400
-------
Total............................................. $86,492
=======
</TABLE>

6. INCOME TAXES

The Company's provisions for income taxes consists of the following:

<TABLE>
<CAPTION>
YEARS ENDED MARCH 31,
-------------------------------
1996 1997 1998
-------- --------- --------
<S> <C> <C> <C>
Current:
Federal............................................. $225,250 $(104,550) $222,005
State............................................... 39,750 (18,450) 47,784
-------- --------- --------
265,000 (123,000) 269,789
-------- --------- --------
Deferred
Federal............................................. (187,850) 172,550 (51,289)
State............................................... (33,150) 30,450 (9,051)
-------- --------- --------
(221,000) 203,000 (60,340)
-------- --------- --------
$ 44,000 $ 80,000 $209,449
======== ========= ========
</TABLE>

The difference between the statutory federal income tax rate and the
Company's effective tax rate is as follows:

<TABLE>
<CAPTION>
YEARS ENDED MARCH 31,
-----------------------
1996 1997 1998
----- ----- -----
<S> <C> <C> <C>
Statutory federal tax rate.................................. 34.0% 34.0% 34.0%
State tax net of federal benefit............................ 4.0 4.0 4.0
Depreciation adjustment..................................... 0.0 0.0 3.6
Other -- permanent differences.............................. (8.5) 1.7 3.1
---- ---- ----
Effective tax rate.......................................... 29.5% 39.7% 44.7%
==== ==== ====
</TABLE>

F-116
<PAGE> 198
FIVE K INDUSTRIES, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Components of the Company's deferred tax liabilities are as follows:

<TABLE>
<CAPTION>
MARCH 31,
-------------------
1997 1998
-------- --------
<S> <C> <C>
Deferred tax assets:
Allowance for doubtful accounts........................... $ 11,203 $ 7,030
Alternative minimum tax carryforward...................... 47,282 --
Depreciation.............................................. 5,730 --
Contribution carryforward................................. 6,922 --
-------- --------
Total............................................. 71,137 7,030
-------- --------
Deferred tax liabilities:
Contracts in progress..................................... 507,157 367,376
Depreciation.............................................. -- 15,334
-------- --------
Total............................................. 507,157 382,710
-------- --------
Net deferred tax liability........................ $436,020 $375,680
======== ========
</TABLE>

7. FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company's financial instruments consist of cash and cash equivalents,
contract receivables, accounts and notes payable and debt. The carrying value of
these financial instruments approximates fair value because of their short
duration. The Company places its temporary cash investments with financial
institutions and limits the amount of credit exposure with any one financial
institution. The carrying value of debt approximates their fair value based on
current rates for borrowings of similar quality and terms.

Other financial instruments which potentially subject the Company to
significant concentrations of credit risk consist primarily of contract
receivables. The Company's customers are concentrated in the Georgia market. The
Company believes this concentration of credit risk is mitigated by the diversity
of industries represented by the Company's customer base.

8. EMPLOYEE BENEFIT PLANS

The Company has a 401(k) profit sharing plan covering substantially all
non-union employees. Each year, participants may contribute up to 15% of pretax
annual compensation as defined in the plan. Discretionary matching amounts may
be contributed at the Company's option. During the years ended March 31, 1996,
1997, and 1998, the Company contributed $49,000, $52,000, and $51,000,
respectively.

The Company contributes monthly to multi-employer defined benefit union
plans based upon hours worked by each eligible employee. Pension expense for
these plans was approximately $73,040, $65,180, and $70,740 for the years ended
March 31, 1996, 1997 and 1998, respectively.

9. RELATED PARTY TRANSACTIONS

The Company's headquarters and warehouse are leased from a relative of the
sole shareholder of the Company on a month-to-month basis. The monthly rental
for this lease is approximately $3,900.

10. COMMITMENTS AND CONTINGENCIES

The Company has entered into a noncancelable lease arrangement for a
certain vehicle. The future minimum lease payments are $22,028 which are due in
the year ending March 31, 1999.

F-117
<PAGE> 199
FIVE K INDUSTRIES, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

11. MAJOR CUSTOMERS

At March 31, 1997 and 1998, 12.0% and 26.3% of contracts receivable,
respectively, were due from two customers of the Company. For the years ended
March 31, 1996, 1997, and 1998, sales of 25.6%, 34.4%, and 24.0%, respectively,
of total sales were made to two customers of the Company.

12. SUBSEQUENT EVENT

On May 19, 1998, the Company signed a stock purchase agreement with General
Roofing Services, Inc. ("GRS") whereby GRS will acquire the Company for a
combination of cash and common shares of GRS concurrent with the consummation of
an initial public offering of the common stock of GRS, subject to certain
conditions including consummation of the offering.

* * * * *

F-118
<PAGE> 200

INDEPENDENT AUDITORS' REPORT

To the Stockholders of
Advanced Roofing, Inc.,
Advanced Leasing, Inc.,
K&M Warehouse, Inc. and
Hi-Rise Crane, Inc.:

We have audited the accompanying combined balance sheets of Advanced
Roofing, Inc., Advanced Leasing, Inc., K & M Warehouse, Inc. and Hi-Rise Crane,
Inc., all of which are under common ownership and common management, as of
December 31, 1996 and October 31, 1997, and the related combined statements of
operations, stockholders' equity and cash flows for each of the two years in the
period ended December 31, 1996 and for the ten-month period ended October 31,
1997. These financial statements are the responsibility of the companies'
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

In our opinion, such financial statements present fairly, in all material
respects, the combined financial position of Advanced Roofing, Inc., Advanced
Leasing, Inc., K & M Warehouse, Inc. and Hi-Rise Crane, Inc. as of December 31,
1996 and October 31, 1997, and the results of their combined operations and
their combined cash flows for each of the two years in the period ended December
31, 1996 and for the ten-month period ended October 31, 1997 in conformity with
generally accepted accounting principles.

DELOITTE & TOUCHE LLP

Miami, Florida
April 10, 1998,
(May 20, 1998 as to the first
paragraph of Note 12)

F-119
<PAGE> 201

ADVANCED ROOFING, INC. AND AFFILIATES

COMBINED BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 31, OCTOBER 31, MARCH 31,
1996 1997 1998
------------ ----------- -----------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents............................... $ 329,926 $ 211,224 $ 209,849
Contract receivables.................................... 1,614,524 1,200,826 1,671,793
Costs and estimated earnings in excess of billings...... 138,836 383,225 551,279
Other current assets, principally supplies.............. 113,233 69,698 118,464
Due from affiliates..................................... -- 181,013 212,812
---------- ---------- ----------
Total current assets............................ 2,196,519 2,045,986 2,764,197
PROPERTY AND EQUIPMENT, net............................... 1,854,496 2,175,025 2,062,833
---------- ---------- ----------
TOTAL........................................... $4,051,015 $4,221,011 $4,827,030
========== ========== ==========
LIABILITIES
CURRENT LIABILITIES:
Accounts payable........................................ $1,042,188 $ 585,693 $ 713,032
Accrued workers' compensation........................... 162,092 105,868 105,868
Other accrued expenses and current liabilities.......... 215,424 279,717 459,039
Billings in excess of costs and estimated earnings...... 165,500 156,100 249,600
Due to related parties.................................. 41,850 100,000 100,000
Note payable to bank.................................... 250,100 400,100 445,100
Current portion of long-term debt....................... 245,225 296,354 282,901
---------- ---------- ----------
Total current liabilities....................... 2,122,379 1,923,832 2,355,540
---------- ---------- ----------
LONG-TERM DEBT, net of current portion.................... 588,465 649,719 562,538
---------- ---------- ----------
COMMITMENTS AND CONTINGENCIES (Note 11)
STOCKHOLDERS' EQUITY:
Common stock............................................ 850 873 873
Additional paid-in capital.............................. 664,203 673,170 673,170
Retained earnings....................................... 780,129 1,078,428 1,339,920
---------- ---------- ----------
1,445,182 1,752,471 2,013,963
Less treasury stock, at cost............................ (105,011) (105,011) (105,011)
---------- ---------- ----------
Total stockholders' equity...................... 1,340,171 1,647,460 1,908,952
---------- ---------- ----------
TOTAL........................................... $4,051,015 $4,221,011 $4,827,030
========== ========== ==========
</TABLE>

See notes to combined financial statements.

F-120
<PAGE> 202

ADVANCED ROOFING, INC. AND AFFILIATES

COMBINED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
FOR THE
FOR THE YEAR ENDED TEN-MONTH FOR THE FIVE-MONTH PERIODS
DECEMBER 31, PERIOD ENDED ENDED MARCH 31,
------------------------- OCTOBER 31, ---------------------------
1995 1996 1997 1997 1998
----------- ----------- ------------ ------------ ------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
CONTRACT REVENUES EARNED.......... $12,077,920 $10,681,751 $10,202,701 $4,933,294 $5,068,342
COSTS OF CONTRACT REVENUES
EARNED.......................... 10,337,731 8,843,162 8,311,953 4,201,115 3,982,463
----------- ----------- ----------- ---------- ----------
GROSS PROFIT...................... 1,740,189 1,838,589 1,890,748 732,179 1,085,879
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES......... 1,218,750 1,316,394 1,205,377 676,401 755,651
----------- ----------- ----------- ---------- ----------
INCOME FROM OPERATIONS............ 521,439 522,195 685,371 55,778 330,228
OTHER (INCOME) EXPENSE:
Interest expense................ 24,052 80,198 99,527 37,093 59,871
Other (income) expense.......... (11,953) 3,172 13,531 17,015 (8,237)
----------- ----------- ----------- ---------- ----------
NET INCOME.............. $ 509,340 $ 438,825 $ 572,313 $ 1,670 $ 278,594
=========== =========== =========== ========== ==========
</TABLE>

See notes to combined financial statements.

F-121
<PAGE> 203

ADVANCED ROOFING, INC. AND AFFILIATES

COMBINED STATEMENTS OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
ADDITIONAL
COMMON PAID-IN RETAINED TREASURY
STOCK CAPITAL EARNINGS STOCK TOTAL
------ ---------- ---------- --------- ----------
<S> <C> <C> <C> <C> <C>
BALANCE, DECEMBER 31, 1994................ $850 $ 58,483 $ 530,787 $ 590,120
Net income.............................. 509,340 509,340
Purchase of treasury stock.............. $(105,011) (105,011)
Contributions from stockholders......... 605,720 605,720
Distributions to stockholders........... (470,839) (470,839)
---- -------- ---------- --------- ----------
BALANCE, DECEMBER 31, 1995................ 850 664,203 569,288 (105,011) 1,129,330
Net income.............................. 438,825 438,825
Distributions to stockholders........... (227,984) (227,984)
---- -------- ---------- --------- ----------
BALANCE, DECEMBER 31, 1996................ 850 664,203 780,129 (105,011) 1,340,171
Net income.............................. 572,313 572,313
Issuance of common stock................ 23 427 450
Contributions from stockholders......... 8,540 8,540
Distributions to stockholders........... (274,014) (274,014)
---- -------- ---------- --------- ----------
BALANCE, OCTOBER 31, 1997................. 873 673,170 1,078,428 (105,011) 1,647,460
Net income (unaudited).................. 278,594 278,594
Distributions to stockholders
(unaudited).......................... (17,102) (17,102)
---- -------- ---------- --------- ----------
BALANCE, MARCH 31, 1998 (unaudited)....... $873 $673,170 $1,339,920 $(105,011) $1,908,952
==== ======== ========== ========= ==========
</TABLE>

See notes to combined financial statements.

F-122
<PAGE> 204

ADVANCED ROOFING, INC. AND AFFILIATES

COMBINED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
FOR THE FOR THE FIVE-MONTH
FOR THE YEAR TEN-MONTH PERIODS ENDED
ENDED DECEMBER 31, PERIOD ENDED MARCH 31,
--------------------- OCTOBER 31, ---------------------
1995 1996 1997 1997 1998
--------- --------- ------------ --------- ---------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income............................................... $ 509,340 $ 438,825 $ 572,313 $ 1,670 $ 278,594
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization.......................... 165,951 261,092 282,161 138,505 146,283
(Gain) loss on disposal of assets...................... (8,482) 19,785 3,994
Changes in assets and liabilities:
Contracts receivable................................. 323,295 (920,195) 413,698 (660,857) (470,967)
Costs and estimated earnings in excess of billings... (670,589) 574,033 (244,389) (40,743) (168,054)
Other current assets................................. 7,499 (72,082) 43,535 28,043 (48,766)
Accounts due from affiliates......................... (181,013) (553) (31,799)
Accounts payable..................................... 372,980 8,655 (456,495) 126,448 127,339
Accrued workers' compensation and other accrued
expenses........................................... 130,336 (32,493) 8,069 339,554 179,320
Billings in excess of costs and estimated earnings... (159,124) 165,500 (9,400) 241,100 93,500
--------- --------- --------- --------- ---------
Net cash provided by operating activities.......... 679,688 414,853 448,264 177,161 105,450
--------- --------- --------- --------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment...................... (873,937) (599,376) (625,525) (112,463) (34,091)
Proceeds from the sale of equipment...................... 8,000 3,500
--------- --------- --------- --------- ---------
Net cash used in investing activities.............. (873,937) (591,376) (622,025) (112,463) (34,091)
--------- --------- --------- --------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from the issuance of long-term debt............. 434,070 446,191 350,240 44,033
Payments of long-term debt............................... (293,818) (172,464) (237,857) (124,800) (144,665)
Net borrowings on note payable to bank................... 250,000 150,000 45,000
Borrowings from related parties.......................... 100,000
Payments on borrowings from related parties.............. (8,865) (54,296) (41,850)
Contributions from stockholders.......................... 401,220 8,540 8,540
Distributions to stockholders............................ (266,339) (227,984) (274,014) (17,102)
--------- --------- --------- --------- ---------
Net cash provided by (used in) financing
activities....................................... 266,268 241,447 55,059 (116,260) (72,734)
--------- --------- --------- --------- ---------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS....... 72,019 64,924 (118,702) (51,562) (1,375)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD............. 192,983 265,002 329,926 145,465 211,224
--------- --------- --------- --------- ---------
CASH AND CASH EQUIVALENTS, END OF PERIOD................... $ 265,002 $ 329,926 $ 211,224 $ 93,903 $ 209,849
--------- --------- --------- --------- ---------
SUPPLEMENTARY DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest................................... $ 24,052 $ 80,198 $ 99,527 $ 37,093 $ 59,871
========= ========= ========= ========= =========
NONCASH FINANCING ACTIVITY:
During 1995, the Company issued notes payable in the
amount of $105,011 in exchange for ten shares of common
stock.
During 1995, the Company distributed property with a book
value of $204,500 to the stockholders.
During 1995, the Company's stockholders contributed
property with a book value of $204,500 to the Company.
</TABLE>

See notes to combined financial statements.

F-123
<PAGE> 205

ADVANCED ROOFING, INC. AND AFFILIATES

NOTES TO COMBINED FINANCIAL STATEMENTS
FOR EACH OF THE TWO YEARS IN THE PERIOD ENDED DECEMBER 31, 1996,
FOR THE TEN-MONTH PERIOD ENDED OCTOBER 31, 1997,
AND FOR THE FIVE-MONTH PERIODS ENDED MARCH 31, 1997 AND 1998 (UNAUDITED)

1. GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

General -- The accompanying combined financial statements include the
accounts of Advanced Roofing, Inc., Advanced Leasing, Inc., K&M Warehouse, Inc.
and Hi-Rise Crane, Inc. (collectively referred to herein as the "Company"), all
of which are under common ownership and common management and are presented on a
combined basis since they are managed as one entity. The Company operates as a
provider of comprehensive roofing services to commercial, industrial,
manufacturing, construction and government customers. The work is generally
performed under fixed-price contracts. The length of the Company's contracts
varies, but generally are less than one year. The Company's principal offices
are located in Fort Lauderdale, Florida and the majority of the Company's
business is transacted with customers in Florida.

The following represents the components of the Company's capital accounts
at October 31, 1997:

<TABLE>
<CAPTION>
ADDITIONAL
PAR SHARES COMMON PAID-IN TREASURY
COMPANY NAME VALUE AUTHORIZED STOCK CAPITAL STOCK
- ------------ ----- ---------- ------ ---------- --------
<S> <C> <C> <C> <C> <C>
Advanced Roofing, Inc.................... $ 1 1,000 $100 $ 400 $105,011
Advanced Leasing, Inc.................... 1 1,000 500 499,500
K&M Warehouse, Inc....................... 1 500 250 164,303
Hi-Rise Crane, Inc....................... 0.50 1,000 23 8,967
---- -------- --------
Total at October 31, 1997...... $873 $673,170 $105,011
==== ======== ========
</TABLE>

The Hi-Rise Crane, Inc. shares were issued during the ten-month period
ended October 31, 1997 and were the only shares issued by any of the entities
since December 31, 1994.

Principles of Combination -- The combined financial statements include the
accounts of Advanced Roofing, Inc., Advanced Leasing, Inc., K&M Warehouse, Inc.
and Hi-Rise Crane, Inc. All significant intercompany balances and transactions
have been eliminated in combination.

Interim Financial Information -- The interim financial statements as of
March 31, 1998 and for the five months ended March 31, 1997 and 1998 are
unaudited and certain information and footnote disclosures normally included in
annual financial statements prepared in accordance with generally accepted
accounting principles have been omitted. In the opinion of management, all
adjustments, consisting only of normal recurring items, necessary to fairly
present the financial position, results of operations, and cash flows with
respect to the interim financial statements have been included. The results of
operations for the interim period are not necessarily indicative of the results
for an entire fiscal year.

Cash and Cash Equivalents -- The Company considers all highly liquid
investments purchased with an original maturity of three months or less to be
cash equivalents.

Contract Receivables -- The Company carries contract receivables at the
amounts it deems to be collectible. Accordingly, the Company provides allowances
for contract receivables it deems to be uncollectible based on management's best
estimates. Recoveries are recognized in the period they are received. The
ultimate amount of contract receivables that become uncollectible could differ
from those estimated.

F-124
<PAGE> 206
ADVANCED ROOFING, INC. AND AFFILIATES

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

Credit Policy -- In the normal course of business, the Company provides
credit to its customers and does not generally require collateral. The Company
principally deals with recurring customers, state and local governments and
local companies whose reputation is known to the Company. Advance payments and
progress payments are generally required for significant projects. Credit checks
are performed for significant new customers that are not known to the Company.
The Company generally has the ability to file liens against the property if it
is not paid on a timely basis.

Inventories -- Inventories consist primarily of materials and supplies and
are valued at the lower of first-in, first-out cost or market.

Property and Equipment -- Property and equipment are stated at cost less
accumulated depreciation. Property and equipment are reviewed for impairment and
a provision recorded, if necessary, whenever events or circumstances indicate
that the carrying amount of an asset may not be recoverable. Routine repairs and
maintenance are expensed as incurred; improvements are capitalized at cost and
are amortized over the remaining useful life of the related asset. Depreciation
and amortization are recorded using the straight-line method over the estimated
useful lives of the related assets. Depreciation and amortization are provided
over the following estimated useful lives:

<TABLE>
<S> <C>
Buildings and improvements................................. 30 to 39 years
Office equipment........................................... 5 to 7 years
Service equipment and vehicles............................. 5 to 7 years
</TABLE>

Warranties -- The Company provides for future estimated warranty
obligations in the period in which the related revenue is recognized.

Estimates made with respect to uncompleted projects are subject to change
as the project progresses and better estimates of project costs become
available. Revisions in cost and profit estimates during the course of the work
are reflected in the period in which the facts requiring revision become known.
Where a loss is forecast for a contract, the full amount of the anticipated loss
is recognized in the period in which it is determined that a loss will occur,
regardless of the stage of completion.

Income Taxes -- The Company is an S Corporation for federal income tax
purposes. Accordingly, the current taxable income of the Company is taxable to
the shareholders who are responsible for the payment of taxes thereon. The tax
basis of assets and liabilities of the Company differ from the financial
statement basis principally due to the use of the completed contract method of
reporting revenues for income tax purposes and due to accelerated depreciation
of assets for tax purposes.

New Accounting Pronouncements -- In June 1997, SFAS No. 130, Reporting
Comprehensive Income, was issued. SFAS No. 130 establishes standards for the
reporting and display of comprehensive income and its components (revenues,
expenses, gains and losses) in a full set of general-purpose financial
statements. SFAS No. 130 requires that all items that are required to be
recognized under accounting standards as components

F-125
<PAGE> 207
ADVANCED ROOFING, INC. AND AFFILIATES

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

of comprehensive income be reported in a financial statement that is displayed
with the same prominence as other financial statements. SFAS No. 130 requires
that a company (a) classify items of other comprehensive income by their nature
in a financial statement and (b) display the accumulated balance of other
comprehensive income separately from retained earnings and additional paid-in
capital in the equity section of the balance sheet. SFAS No. 130 is effective
for fiscal years beginning after December 15, 1997. Reclassification of
financial statements for earlier periods provided for comparative purposes is
required. The Company has not determined the effects, if any, that SFAS No. 130
will have on its combined financial statements.

Year-End Change -- During the ten-month period ended October 31, 1997 the
Company changed its year-end to October 31.

2. CONTRACT RECEIVABLES

Contract receivables consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31, OCTOBER 31,
1996 1997
------------ -----------
<S> <C> <C>
Completed contracts:
Current accounts.......................................... $ 708,598 $ 653,726
Retention................................................. 2,500
---------- ----------
711,098 653,726
Contracts in progress:
Current accounts.......................................... 750,326 417,400
Retention................................................. 153,100 129,700
---------- ----------
Subtotal.................................................... 903,426 547,100
---------- ----------
Contract receivables........................................ $1,614,524 $1,200,826
========== ==========
</TABLE>

3. PROPERTY AND EQUIPMENT

Property, plant and equipment consist of the following as of:

<TABLE>
<CAPTION>
DECEMBER 31, OCTOBER 31,
1996 1997
------------ -----------
<S> <C> <C>
Land........................................................ $ 151,498 $ 151,498
Buildings and improvements.................................. 677,807 754,438
Office equipment............................................ 132,455 132,455
Service equipment and vehicles.............................. 1,878,035 2,404,094
---------- ----------
2,839,795 3,442,485
Less accumulated depreciation............................... 985,299 1,267,460
---------- ----------
$1,854,496 $2,175,025
========== ==========
</TABLE>

F-126
<PAGE> 208
ADVANCED ROOFING, INC. AND AFFILIATES

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

4. CONTRACTS IN PROGRESS

Information relative to contracts in progress is summarized as follows:

<TABLE>
<CAPTION>
DECEMBER 31, OCTOBER 31,
1996 1997
------------ -----------
<S> <C> <C>
Costs incurred on uncompleted contracts..................... $2,601,836 $1,759,125
Estimated earnings.......................................... 756,100 558,000
---------- ----------
Total............................................. 3,357,936 2,317,125
Less billings to date....................................... 3,384,600 2,090,000
---------- ----------
Net (over) under billings......................... $ (26,664) $ 227,125
========== ==========
</TABLE>

Included in the accompanying balance sheets under the following captions:

<TABLE>
<CAPTION>
DECEMBER 31, OCTOBER 31,
1996 1997
------------ -----------
<S> <C> <C>
Costs and estimated earnings in excess of billings.......... $138,836 $383,225
Billings in excess of costs and estimated earnings.......... 165,500 156,100
-------- --------
Total............................................. $(26,664) $227,125
======== ========
</TABLE>

5. 401(K) PROFIT SHARING PLAN

The Company has a 401(k) profit sharing plan covering substantially all
employees. Each year, participants may contribute up to 15% of pretax annual
compensation, not to exceed $9,000 and $9,500 in 1996 and 1997, respectively, as
defined in the plan. The Company shall contribute and allocate to each
participant's account an amount equal to the amount withheld from the
compensation of such participant pursuant to his or her salary savings
agreement. Discretionary matching amounts may be contributed at the Company's
option, not to exceed 25% of the participant's contributions. The Company's
contributions were $44,979, $30,839, and $25,931 for the years ended December
31, 1995 and 1996 and the ten-month period ended October 31, 1997, respectively.

6. RELATED PARTY TRANSACTIONS

During 1995, the Company entered into an agreement to purchase ten shares
of issued and outstanding common stock of Advanced Roofing, Inc. from the spouse
of a deceased former shareholder under the terms of a Stockholders' Agreement
dated January 16, 1992. In exchange for the stock, the Company issued notes
payable in the amount of $105,011. The notes bear an interest rate of 10% and
are payable in twenty-four equal monthly installments of $4,846 from 1995
through 1997. The amounts payable under the Stockholders' Agreement was $41,850
at December 31, 1996. No amount was outstanding at October 31, 1997.

During 1997, the Company borrowed $100,000 from a relative of one of the
Company's shareholders. The note bears an interest rate of 10%; interest is
payable monthly with the principal payable in a lump-sum payment in 1998. The
note is secured by an airplane and related equipment owned by one of the
Company's shareholders and guaranteed by that same shareholder.

During the ten-month period ended October 31, 1997, the Company made cash
advances to certain affiliates totaling $181,013. The entire balance was
outstanding at October 31, 1997.

F-127
<PAGE> 209
ADVANCED ROOFING, INC. AND AFFILIATES

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

7. LONG-TERM DEBT

A summary of long-term debt is as follows:

<TABLE>
<CAPTION>
DECEMBER 31, OCTOBER 31,
1996 1997
------------ -----------
<S> <C> <C>
Mortgage note bearing an annual interest rate of 10%,
interest and principal payable in equal monthly
installments of $5,286 from 1995 through 2005; secured by
certain real estate....................................... $362,186 $338,705
Mortgage note bearing an annual interest rate of 9%,
interest and principal payable in equal monthly
installments of $1,282 from 1994 through 2003; secured by
certain real estate....................................... 77,631 70,389
Various equipment and automobile notes bearing interest
rates ranging from 7.75% to 9.00%, interest and principal
payable in equal monthly payments due from 1995 through
2000; secured by certain equipment and automobiles........ 393,873 536,975
-------- --------
Total long-term debt.............................. 833,690 946,069
Less current portion........................................ 245,225 296,354
-------- --------
Long-term debt, net of current portion............ $588,465 $649,715
======== ========
</TABLE>

The annual aggregate maturities of long-term debt are as follows:

<TABLE>
<CAPTION>
OCTOBER 31,
- -----------
<S> <C>
1998........................................................ $296,354
1999........................................................ 236,167
2000........................................................ 138,197
2001........................................................ 53,989
2002........................................................ 59,508
Thereafter.................................................. 161,854
--------
Total............................................. $946,069
========
</TABLE>

8. NOTE PAYABLE TO BANK

The Company has a revolving credit facility with a financial institution
for direct borrowings, bearing one percentage point above the lender's prime
interest rate (8.5% and 8.25% for 1997 and 1996, respectively) and maturing in
yearly intervals, with the next maturity date of April 26, 1998. The credit
facility is generally renewed annually and is guaranteed by the stockholders and
secured by substantially all of Advanced Roofing, Inc.'s assets. Amounts payable
under the revolving credit facility were $250,100 and $400,100 at December 31,
1996 and October 31, 1997, respectively.

9. MAJOR CUSTOMERS

At October 31, 1997, $89,498 was due from one customer of the Company. For
the ten-month period ended October 31, 1997, sales of 21% of total sales were
made to this customer.

10. FAIR VALUE OF FINANCIAL INSTRUMENTS

F-128
<PAGE> 210
ADVANCED ROOFING, INC. AND AFFILIATES

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

temporary cash investments with financial institutions and limits the amount of
credit exposure with any one financial institution. The carrying value of debt
and capitalized lease obligations approximates their fair value based on current
rates for borrowings of similar quality and terms.

11. COMMITMENTS AND CONTINGENCIES

12. SUBSEQUENT EVENT

On May 20, 1998, the Company signed a stock purchase agreement with General
Roofing Services, Inc. ("GRS") whereby GRS will acquire the Company for a
combination of cash and common shares of GRS concurrent with the consummation of
an initial public offering of the common stock of GRS, subject to certain
conditions including the consummation of the Offering. The assets and operations
related to K&M Warehouse, Inc. and Hi-Rise Crane, Inc. ("Hi-Rise"), together
with certain portions of Advanced Leasing, Inc. (consisting primarily of the
assets related to Hi-Rise) will not be acquired in connection with the proposed
transaction with GRS.

Additionally, in January 1998, one of the Company's stockholders
relinquished control of Hi-Rise. In connection therewith, 45% of Hi-Rise's stock
was transferred to an unrelated third party and 10% of the stock was transferred
to an officer of the Company.

* * * * * *

F-129
<PAGE> 211

INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholders of
Blackmore and Buckner Roofing, Inc.:

We have audited the accompanying balance sheet of Blackmore and Buckner
Roofing, Inc. (the "Company") as of December 31, 1997, and the related
statements of operations, stockholders' equity, and cash flows for the year then
ended. 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 audit.

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

In our opinion, the 1997 financial statements present fairly, in all
material respects, the financial position of the Company at December 31, 1997,
and the results of its operations and its cash flows for the year then ended in
conformity with generally accepted accounting principles.

DELOITTE & TOUCHE LLP

Atlanta, Georgia
April 23, 1998
(May 12, 1998 as to Note 11)

F-130
<PAGE> 212

INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholders of
Blackmore and Buckner Roofing, Inc.:

We have audited the accompanying balance sheet of Blackmore and Buckner
Roofing, Inc. (the "Company") as of December 31, 1996, and the related
statements of operations, stockholders' equity, and cash flows for the years
ended December 31, 1996 and December 31, 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 audit.

In our opinion, the above-mentioned financial statements present fairly, in
all material respects, the financial position of the Company at December 31,
1996, and the results of its operations and its cash flows for each of the two
years in the period ended December 31, 1996 in conformity with generally
accepted accounting principles.

BLUE & CO., LLC

Indianapolis, Indiana
January 29, 1997

F-131
<PAGE> 213

BLACKMORE AND BUCKNER ROOFING, INC.

BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 31, DECEMBER 31, MARCH 31,
1996 1997 1998
------------ ------------ -----------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents............................... $ 66,884 $ 238,524 $ 246,957
Contract receivables.................................... 2,453,687 1,532,800 778,602
Cost and estimated earnings in excess of billings....... 66,993 233,135 271,678
Inventories............................................. 83,327 80,208 75,734
Prepaid expenses and other current assets............... 13,460 20,060 24,480
---------- ---------- ----------
Total current assets............................ 2,684,351 2,104,727 1,397,451
PROPERTY AND EQUIPMENT, NET............................... 334,096 361,396 342,734
OTHER ASSETS.............................................. 72,213 85,250 90,168
---------- ---------- ----------
$3,090,660 $2,551,373 $1,830,353
========== ========== ==========

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable........................................ $ 586,427 $ 345,532 $ 291,104
Accrued payroll and withholdings........................ 363,581 323,391 159,644
Accrued expenses........................................ 200,189 131,081 95,332
Billings in excess of costs and estimated earnings...... 497,601 362,752 122,156
Current maturities of long-term debt.................... 19,286 22,645 22,838
---------- ---------- ----------
Total current liabilities....................... 1,667,084 1,185,401 691,074
LONG-TERM DEBT, net of current portion.................... 58,610 85,073 76,912
---------- ---------- ----------
Total liabilities............................... 1,725,694 1,270,474 767,986
---------- ---------- ----------
STOCKHOLDERS' EQUITY:
Common stock, $1 stated value, 40,000 shares authorized,
37,851, 29,014 and 29,014 shares issued,
respectively......................................... 37,851 29,014 29,014
Additional paid-in capital.............................. 501,265 370,352 370,352
Retained earnings....................................... 880,600 881,533 663,001
Treasury stock, 4,716 shares in 1996.................... (54,750)
---------- ---------- ----------
Total stockholders' equity...................... 1,364,966 1,280,899 1,062,367
---------- ---------- ----------
$3,090,660 $2,551,373 $1,830,353
========== ========== ==========
</TABLE>

See notes to financial statements.

F-132
<PAGE> 214

BLACKMORE AND BUCKNER ROOFING, INC.

STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEARS ENDED DECEMBER 31, MARCH 31,
------------------------------------ -----------------------
1995 1996 1997 1997 1998
---------- ---------- ---------- ---------- ----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
CONTRACT AND SERVICE
REVENUES EARNED.................... $7,210,134 $7,704,410 $7,738,719 $1,401,394 $1,061,435
COST OF CONTRACT AND SERVICE REVENUES
EARNED............................. 5,794,958 5,948,466 6,320,994 1,273,060 896,081
---------- ---------- ---------- ---------- ----------
GROSS PROFIT......................... 1,415,176 1,755,944 1,417,725 128,334 165,354
SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES........................... 1,161,527 1,326,300 1,219,461 205,840 215,422
---------- ---------- ---------- ---------- ----------
INCOME (LOSS) FROM OPERATIONS........ 253,649 429,644 198,264 (77,506) (50,068)
OTHER INCOME (EXPENSE):
Interest income.................... 2,518 11,306 17,331 5,559
Interest expense................... (12,433) (8,438) (6,958) (1,557) (3,108)
Other income (expense), net........ 15,879 (1,025) 6,016 (1,357) (2,646)
---------- ---------- ---------- ---------- ----------
NET INCOME (LOSS).......... $ 259,613 $ 431,487 $ 214,653 $ (80,420) $ (50,263)
========== ========== ========== ========== ==========
</TABLE>

See notes to financial statements.

F-133
<PAGE> 215

BLACKMORE AND BUCKNER ROOFING, INC.

STATEMENTS OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
COMMON STOCK ADDITIONAL TREASURY STOCK
---------------- PAID-IN ----------------- RETAINED
SHARES AMOUNT CAPITAL SHARES AMOUNT EARNINGS TOTAL
------ ------- ---------- ------ -------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCES, JANUARY 1, 1995............ 37,851 $37,851 $ 501,265 4,716 $(54,750) $ 404,878 $ 889,244
Distributions to shareholders...... (71,240) (71,240)
Net income......................... 259,613 259,613
------ ------- --------- ------ -------- --------- ----------
BALANCES, DECEMBER 31, 1995.......... 37,851 37,851 501,265 4,716 (54,750) 593,251 1,077,617
Distributions to stockholders...... (144,138) (144,138)
Net income......................... 431,487 431,487
------ ------- --------- ------ -------- --------- ----------
BALANCES, DECEMBER 31, 1996.......... 37,851 37,851 501,265 4,716 (54,750) 880,600 1,364,966
Purchase of treasury stock......... 4,121 (85,000) (85,000)
Distributions to stockholders...... (213,720) (213,720)
Retirement of treasury stock....... (8,837) (8,837) (130,913) (8,837) 139,750
Net income......................... 214,653 214,653
------ ------- --------- ------ -------- --------- ----------
BALANCES, DECEMBER 31, 1997.......... 29,014 29,014 370,352 881,533 1,280,899
Net loss (unaudited)............... (50,263) (50,263)
Distributions to stockholders
(unaudited)...................... (168,269) (168,269)
------ ------- --------- ------ -------- --------- ----------
BALANCES, MARCH 31, 1998
(unaudited)........................ 29,014 $29,014 $ 370,352 $ 663,001 $1,062,367
====== ======= ========= ====== ======== ========= ==========
</TABLE>

See notes to financial statements.

F-134
<PAGE> 216

BLACKMORE AND BUCKNER ROOFING, INC.

STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEARS ENDED DECEMBER 31, MARCH 31,
----------------------------------- ----------------------
1995 1996 1997 1997 1998
--------- ----------- --------- ---------- ---------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)...................... $ 259,613 $ 431,487 $ 214,653 $ (80,420) $ (50,263)
Adjustments to reconcile net income
(loss) to net cash provided by (used
in) operating activities:
Depreciation......................... 99,120 82,321 88,776 20,197 18,662
Gain on disposal of assets........... (9,807) (900)
Life insurance premiums paid in
excess of increase in cash
surrender value of officers' life
insurance......................... (576) (2,456) (2,139) (2,273)
Changes in operating assets and
liabilities:
Contract receivables.............. 191,137 (1,275,210) 920,887 1,090,507 754,198
Costs and estimated earnings in
excess of billings.............. 53,936 (47,297) (166,142) (74,990) (38,543)
Inventories....................... 11,425 25,158 3,119 2,532 4,474
Other current assets.............. (16,540) 17,813 (6,600) (3,172) (4,420)
Accounts payable and accrued
expenses........................ (27,979) 360,925 (350,193) (440,773) (253,924)
Billings in excess of costs and
estimated earnings.............. (209,658) 270,778 (134,849) 34,785 (240,596)
--------- ----------- --------- ---------- ---------
Net cash provided by (used in)
operating activities......... 351,247 (135,501) 567,195 546,527 187,315
--------- ----------- --------- ---------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment.... (85,519) (19,071) (116,076) (9,849)
Proceeds from sale of property and
equipment............................ 13,473 900
Increase in cash surrender value of
officers' life insurance............. (9,906) (10,581) (10,581) (2,495) (2,645)
--------- ----------- --------- ---------- ---------
Net cash used in investing
activities................... (81,952) (28,752) (126,657) (12,344) (2,645)
--------- ----------- --------- ---------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments of long-term debt........... (19,414) (20,222) (20,178) (5,135) (7,968)
Distributions to stockholders.......... (71,240) (144,138) (213,720) (120,396) (168,269)
Purchase of treasury stock............. (35,000)
--------- ----------- --------- ---------- ---------
Net cash used in financing
activities................... (90,654) (164,360) (268,898) (125,531) (176,237)
--------- ----------- --------- ---------- ---------
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS......... 178,641 (328,613) 171,640 408,652 8,433
CASH AND CASH EQUIVALENTS, BEGINNING OF
PERIOD................................. 216,856 395,497 66,884 66,884 238,524
--------- ----------- --------- ---------- ---------
CASH AND CASH EQUIVALENTS, END OF
PERIOD................................. $ 395,497 $ 66,884 $ 238,524 $ 475,536 $ 246,957
========= =========== ========= ========== =========
Cash payments for:
Interest............................... $ 12,433 $ 8,438 $ 6,958 $ 1,557 $ 3,108
========= =========== ========= ========== =========
</TABLE>

See notes to financial statements.

F-135
<PAGE> 217

BLACKMORE AND BUCKNER ROOFING, INC.

NOTES TO FINANCIAL STATEMENTS

1. GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

General -- Blackmore and Buckner Roofing, Inc. (the "Company") is a roofing
contractor headquartered in Indianapolis, Indiana. The principal activities of
the Company include installing commercial and residential roofing, repair work
on existing and newly constructed buildings, and metal fabrication. The Company
performs these construction activities primarily in Indiana for commercial
enterprises.

A majority of the Company's hourly employees are covered by collective
bargaining agreements, which expire May 31, 1998 and May 31, 1999.

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

Cash and Cash Equivalents -- The Company considers all highly liquid
investments purchased with an original maturity of three months or less to be
cash equivalents.

Contract Receivables -- The Company carries contract receivables at the
amounts it deems to be collectible. Accordingly, the Company provides allowances
for contract receivables it deems to be uncollectible based on management's best
estimates. Recoveries are recognized in the period they are received. The
ultimate amount of contract receivables that become uncollectible could differ
from those estimated.

Credit Policy -- In the normal course of business, the Company provides
credit to its customers and does not generally require collateral. The Company
principally deals with recurring customers, local school districts, and
well-known companies whose reputation is known to the Company. Advance payments
and progress payments are generally required for significant projects. Credit
checks are performed for significant new customers that are not known to the
Company. The Company generally has the ability to file liens against the
property if it is not paid on a timely basis.

Inventories -- Inventories consist primarily of materials and supplies and
are valued at the lower of cost, using the first-in, first-out method, or
market.

Property and Equipment -- Property and equipment is stated at cost less
accumulated depreciation. Property and equipment are reviewed for impairment and
a provision is provided, if necessary, whenever events or circumstances indicate
that the carrying amount of an asset may not be recoverable. Routine repairs and
maintenance are expensed as incurred; improvements are capitalized at cost and
are amortized over the remaining useful life of the related asset. Depreciation
is recorded using the straight-line method over the estimated useful life of the
related assets. Depreciation is provided over the following estimated useful
lives:

<TABLE>
<S> <C>
Buildings................................................... 10-31 years
Shop and general equipment.................................. 2-7 years
Office equipment............................................ 5-10 years
Trucks, trailers and vehicles............................... 3-5 years
Fabrication equipment....................................... 10 years
</TABLE>

F-136
<PAGE> 218
BLACKMORE AND BUCKNER ROOFING, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

Warranties -- The Company provides for future estimated warranty
obligations in the period in which the related revenue is recognized.

Revenue and Cost Recognition -- The Company performs repair work under
time-and-material contracts and installation work generally under fixed-price
contracts. Revenues from time-and-material contracts are recognized currently as
the work is performed. Revenue from fixed price contracts is recognized under
the percentage-of-completion method measured by the ratio of contract costs
incurred to date to estimated total contract costs.

Contract costs include all direct material and labor costs and those
indirect costs relating to contract performance such as indirect labor, supplies
and tools. Selling, general and administrative costs are charged to expense as
incurred. Costs for materials incurred at the inception of a project, which are
not reflective of effort, are excluded from the percentage of completion
calculation for purposes of determining profits on uncompleted contracts.

Estimates made with respect to uncompleted projects are subject to change
as the project progresses and better estimates of project costs become
available. Revisions in cost and profit estimates during the course of work are
reflected in the period in which the facts requiring the revision become known.
Where a loss is forecast for a contract, the full amount of the anticipated loss
is recognized in the period in which it is determined that a loss will occur,
regardless of the stage of completion.

Income Taxes -- The Company is an S Corporation for federal income tax
purposes. The current taxable income of the Company is taxable to the
shareholders who are responsible for the payment of taxes thereon. Accordingly,
the accompanying financial statements do not include any provision for federal
and state income taxes.

Reclassification -- Certain amounts in the 1995 and 1996 financial
statements have been reclassified to conform to the 1997 presentation.

2. CONTRACT RECEIVABLES

Contract receivables include the following:

<TABLE>
<CAPTION>
DECEMBER 31,
-----------------------
1996 1997
---------- ----------
<S> <C> <C>
Completed contracts:
Current accounts.......................................... $ 593,996 $ 851,246
Contracts in progress:
Current accounts.......................................... 1,766,182 526,072
Retention................................................. 93,509 155,482
---------- ----------
$2,453,687 $1,532,800
========== ==========
</TABLE>

F-137
<PAGE> 219
BLACKMORE AND BUCKNER ROOFING, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

3. CONTRACTS IN PROGRESS

Information relative to contracts in progress, earnings thereon and related
billings includes the following:

<TABLE>
<CAPTION>
DECEMBER 31,
-------------------------
1996 1997
----------- -----------
<S> <C> <C>
Costs incurred on uncompleted contracts..................... $ 3,103,306 $ 3,563,178
Estimated earnings.......................................... 884,365 477,665
----------- -----------
Total....................................................... 3,987,671 4,040,843
Less: billings to date...................................... (4,418,279) (4,170,460)
----------- -----------
Net over billings................................. $ (430,608) $ (129,617)
=========== ===========
</TABLE>

Included in the accompanying balance sheets under the following captions:

<TABLE>
<CAPTION>
DECEMBER 31,
---------------------
1996 1997
--------- ---------
<S> <C> <C>
Costs and estimated earnings in excess of billings.......... $ 66,993 $ 233,135
Billings in excess of costs and estimated earnings.......... (497,601) (362,752)
--------- ---------
Total............................................. $(430,608) $(129,617)
========= =========
</TABLE>

4. PROPERTY AND EQUIPMENT

Property and equipment consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
-------------------------
1996 1997
----------- -----------
<S> <C> <C>
Land........................................................ $ 107,381 $ 107,381
Buildings................................................... 351,657 351,657
Shop and general equipment.................................. 431,954 468,685
Office equipment............................................ 114,297 138,841
Trucks, trailers and vehicles............................... 333,967 372,567
Fabrication equipment....................................... 143,459 159,660
----------- -----------
1,482,715 1,598,791
Accumulated depreciation.................................... (1,148,619) (1,237,395)
----------- -----------
$ 334,096 $ 361,396
=========== ===========
</TABLE>

F-138
<PAGE> 220
BLACKMORE AND BUCKNER ROOFING, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

5. LONG-TERM DEBT

A summary of long-term debt is as follows:

<TABLE>
<CAPTION>
DECEMBER 31,
-------------------------
1996 1997
----------- -----------
<S> <C> <C>
Note payable to bank under equipment line-of-credit due
October 2000 bears interest at prime plus 1 1/4% (9.5% and
9.75% at December 31, 1996 and 1997, respectively) Note is
payable in monthly principal payments of $744 plus
interest.................................................. $ 34,226 $ 27,120

Note payable to U.S. Small Business Administration due
October 2003 bears interest at 5.2%. Note is payable in
monthly payments of $560 of principal and interest........ 38,151 33,313

Note payable to former stockholder due August 2002 bears
interest at 8.5%. Note is payable in monthly payments of
$1,026 of principal and interest.......................... 47,285

Note payable to former stockholder repaid in 1997........... 5,519
----------- -----------
77,896 107,718
Current maturities.......................................... (19,286) (22,645)
----------- -----------
$ 58,610 $ 85,073
=========== ===========
</TABLE>

Aggregate annual maturities of long-term debt for the years ending December
31, are as follows:

<TABLE>
<S> <C>
1998........................................................ $ 22,645
1999........................................................ 23,679
2000........................................................ 25,130
2001........................................................ 17,075
2002........................................................ 14,253
Thereafter.................................................. 4,936
--------
$107,718
========
</TABLE>

The Company has a $500,000 line-of-credit with a bank which is available
for its current working capital needs, through July 1998, and a $85,000
line-of-credit to be used for capital expenditures. No amounts were outstanding
under the working capital line of credit at December 31, 1996 and 1997. The
Company had outstanding borrowings of $34,226 and $27,120 under the equipment
line of credit at December 31, 1996 and 1997, respectively. These credit
facilities require monthly interest payments at the bank's prime rate (8.25% and
8.5% at December 31, 1996 and December 31, 1997, respectively) plus 3/4% and
1 1/4%, respectively.

The credit facilities are secured by contract receivables, equipment, and
mortgages on certain commercial properties, and are personally guaranteed by
several of the Company's stockholders. The loan agreements place restrictive
covenants on the Company, including maintenance of certain collateral ratios, a
specified minimum amount of working capital and net worth, as defined. The
credit facilities also contain acceleration clauses in the event the Company
enters into a merger agreement or a transfer of ownership occurs. The note
payable to the U.S. Small Business Administration is secured under the same
terms as the line-of-credit facilities.

F-139
<PAGE> 221
BLACKMORE AND BUCKNER ROOFING, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

6. FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company's financial instruments consist of cash and cash equivalents,
contract receivables, accounts and notes payable and debt. The carrying value of
these financial instruments approximates fair value because of their short
duration or current interest rates. The Company places its temporary cash
investments with financial institutions and limits the amount of credit exposure
with any one financial institution. The carrying value of debt obligations
approximates their fair value based on current rates for borrowings of similar
quality and terms.

Other financial instruments, which potentially subject the Company to
significant concentrations of credit risk, consist primarily of contract
receivables. The Company's customers are concentrated in the Indiana market. The
Company believes this concentration of credit risk is mitigated by the diversity
of industries represented by the Company's customer base.

7. MAJOR CUSTOMERS

At December 31, 1996 and 1997, 51% and 28% of contract receivables,
respectively, were due from two customers of the Company. For the years ended
December 31, 1995, 1996 and 1997, sales of 27%, 41% and 26%, respectively, of
total sales were made to two customers of the Company.

8. PENSION PLANS

Substantially all of the Company's nonmanagement employees are covered by
collective bargaining agreements. The Company's contributions to various
union-sponsored multi-employer pension plans were $113,492, $159,631 and
$214,842 in 1995, 1996 and 1997, respectively. Information on the Company's
portion of the accumulated plan benefits and the plans' net assets, if any, is
not determinable. Under the Employee Retirement Income Security Act of 1974, as
amended in 1980, an employer, upon withdrawing from a multi-employer pension
plan, is obligated for its proportionate share of the plan's unfunded vested
benefits. The Company has no intention of withdrawing from the plans.

In 1990, the Company adopted a Simplified Employee Pension ("SEP") plan
which covers all non-union employees who meet certain age and employment
criteria. Contributions to the plan are at the discretion of the Board of
Directors. The Company's liability for benefits is limited to the amount funded
to the plan. Contributions to the SEP plan were $92,371, $99,077 and $112,023 in
1995, 1996 and 1997, respectively.

9. STOCKHOLDERS' EQUITY

Common Stock -- At December 31, 1996 and 1997, the Company's common stock
consists of 40,000 shares authorized ($1 stated value), 37,851 and 29,014 shares
issued and outstanding, respectively, including shares held in treasury. All
common shares have equal voting, dividend, participation and liquidation rights.

Treasury Stock -- The Company purchased 4,121 shares of common stock on
August 1, 1997 for $85,000. The Company paid cash of $35,000 and issued a note
payable to a former stockholder in the amount of $50,000.

On December 31, 1997, the Company retired 8,837 shares of treasury stock at
a cost of $139,750. The shares were originally issued at one dollar per share.
Additional paid-in capital was reduced for the amount in excess of the original
$8,837 purchase price of the common stock, or $130,913.

10. CONTINGENCY

The Company is currently involved in arbitration to recover costs incurred
in connection with a warranty replacement. Although it is not possible to
predict the outcome of the arbitration, in the opinion of

F-140
<PAGE> 222
BLACKMORE AND BUCKNER ROOFING, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

management, resolution will not have a material effect on the financial
position, results of operations or cash flows of the Company.

11. SUBSEQUENT EVENT

On May 12, 1998, the Company signed a stock purchase agreement with General
Roofing Services, Inc. ("GRS") whereby GRS will acquire the Company for a
combination of cash and common shares of GRS concurrent with the consummation of
an initial public offering of the common stock of GRS, subject to certain
conditions including consummation of the offering.

F-141
<PAGE> 223

INDEPENDENT AUDITORS' REPORT

To the Stockholders of
Register Contracting Company, Inc.:

We have audited the accompanying balance sheets of Register Contracting
Company, Inc. (the "Company"), as of September 30, 1996 and 1997, and the
related statements of operations, stockholders' equity and cash flows for each
of the three years in the period ended September 30, 1997. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

In our opinion, such financial statements present fairly, in all material
respects, the financial position of Register Contracting Company, Inc. as of
September 30, 1997 and 1996 and the results of its operations and its cash flows
for each of the three years in the period ended September 30, 1997 in conformity
with generally accepted accounting principles.

DELOITTE & TOUCHE LLP

Jacksonville, Florida
October 31, 1997
(May 8, 1998 as to Note 11)

F-142
<PAGE> 224

BALANCE SHEETS

<TABLE>
<CAPTION>
SEPTEMBER 30,
----------------------- MARCH 31,
1996 1997 1998
---------- ---------- -----------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents................................ $ 549,829 $ 594,137 $ 489,396
Contract receivables, net of an allowance for doubtful
accounts of $20,916, $20,916, and $35,916,
respectively.......................................... 612,910 1,139,133 1,342,682
Costs and estimated earnings in excess of billings....... 109,739 15,352 116,654
Due from related parties................................. 122,619 103,412 85,223
Inventories.............................................. 73,981 71,079 88,165
Prepaid expenses and other current assets................ 20,276 35,670 33,622
Deferred tax assets...................................... 2,862
---------- ---------- ----------
Total current assets............................. 1,498,354 1,961,645 2,155,742
PROPERTY AND EQUIPMENT, net................................ 438,530 476,332 549,253
OTHER ASSETS............................................... 22,000 46,000 46,000
---------- ---------- ----------
TOTAL............................................ $1,949,884 $2,483,977 $2,750,995
========== ========== ==========

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable......................................... $ 551,941 $ 540,846 $ 590,038
Accrued expenses......................................... 252,890 344,664 359,160
Billings in excess of costs and estimated earnings....... 94,268 174,671 255,582
Current portion of long-term debt........................ 21,723 44,558 44,895
Accrued bonuses.......................................... 213,684 145,000
Income taxes payable..................................... 5,605 107,441
Deferred tax liabilities................................. 93,929 68,777
---------- ---------- ----------
Total current liabilities........................ 1,020,356 1,425,864 1,463,452
LONG-TERM DEBT, net of current portion..................... 10,406 54,795 132,010
DEFERRED TAX LIABILITIES................................... 12,730 22,739 22,739
---------- ---------- ----------
Total............................................ 1,043,492 1,503,398 1,618,201
---------- ---------- ----------
COMMITMENTS AND CONTINGENCIES (Note 5)
STOCKHOLDERS' EQUITY:
Common stock, $10 par value; 10,000 shares authorized;
1902, 1992 and 1992 shares issued and outstanding..... 19,020 19,920 19,920
Additional paid-in capital............................... 45,291 72,932 72,932
Retained earnings........................................ 842,081 887,727 1,039,942
---------- ---------- ----------
Total............................................ 906,392 980,579 1,132,794
---------- ---------- ----------
TOTAL............................................ $1,949,884 $2,483,977 $2,750,995
========== ========== ==========
</TABLE>

See notes to financial statements.

F-143
<PAGE> 225

STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEARS ENDED SEPTEMBER 30, MARCH 31,
------------------------------------ -----------------------
1995 1996 1997 1997 1998
---------- ---------- ---------- ---------- ----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
CONTRACT REVENUES EARNED............. $6,532,709 $6,187,007 $6,831,850 $3,043,586 $4,169,021
COSTS OF CONTRACT REVENUES EARNED.... 5,871,215 5,173,719 5,791,836 2,536,567 3,443,424
---------- ---------- ---------- ---------- ----------
GROSS PROFIT......................... 661,494 1,013,288 1,040,014 507,019 725,597
SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES........................... 591,763 803,940 1,002,174 431,272 516,888
---------- ---------- ---------- ---------- ----------
INCOME FROM OPERATIONS............... 69,731 209,348 37,840 75,747 208,709
OTHER INCOME (EXPENSE):
Interest income.................... 7,531 16,665 26,131 9,046 10,884
Interest expense................... (19,738) (17,083) (9,038) (4,099) (8,014)
Other income....................... 3,100 67,337 73,267 6,872 12,275
---------- ---------- ---------- ---------- ----------
INCOME BEFORE INCOME TAXES........... 60,624 276,267 128,200 87,566 223,854
INCOME TAX PROVISION................. 18,848 88,730 82,554 56,042 71,639
---------- ---------- ---------- ---------- ----------
NET INCOME................. $ 41,776 $ 187,537 $ 45,646 $ 31,524 $ 152,215
========== ========== ========== ========== ==========
</TABLE>

See notes to financial statements.

F-144
<PAGE> 226

STATEMENTS OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
COMMON STOCK ADDITIONAL
---------------- PAID-IN RETAINED
SHARES AMOUNT CAPITAL EARNINGS TOTAL
------ ------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
BALANCE, OCTOBER 1, 1994..................... 1,800 $18,000 $ 612,768 $ 630,768
Issuance of common stock................... 102 1,020 $45,291 46,311
Net income................................. 41,776 41,776
----- ------- ------- ---------- ----------
BALANCE, SEPTEMBER 30, 1995.................. 1,902 19,020 45,291 654,544 718,855
Net income................................. 187,537 187,537
----- ------- ------- ---------- ----------
BALANCE, SEPTEMBER 30, 1996.................. 1,902 19,020 45,291 842,081 906,392
Issuance of common stock................... 90 900 27,641 28,541
Net income................................. 45,646 45,646
----- ------- ------- ---------- ----------
BALANCE, SEPTEMBER 30, 1997.................. 1,992 19,920 72,932 887,727 980,579
Net income (Unaudited)..................... 152,215 152,215
----- ------- ------- ---------- ----------
BALANCE, MARCH 31, 1998
(Unaudited)................................ 1,992 $19,920 $72,932 $1,039,942 $1,132,794
===== ======= ======= ========== ==========
</TABLE>

See notes to financial statements.

F-145
<PAGE> 227

STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEARS ENDED SEPTEMBER 30, MARCH 31,
-------------------------------- --------------------
1995 1996 1997 1997 1998
--------- -------- --------- --------- --------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income................................................ $ 41,776 $187,537 $ 45,646 $ 31,524 $152,215
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization........................... 90,081 92,781 97,405 41,823 48,702
Loss (gain) on disposal of assets....................... 5,803 (48,759) (11,999) (2,690)
Deferred taxes.......................................... 19,442 29,195 (86,782) 12,895 71,640
Changes in operating assets and liabilities:
Contract receivables, net............................. 247,563 145,671 (526,223) (278,859) (203,549)
Costs and estimated earnings in excess billings....... 208,685 (88,686) 94,387 (66,400) (101,302)
Due from related parties.............................. (2,592) (6,587) 26,290 18,268 18,189
Inventories........................................... (44,416) (8,434) 2,902 (3,435) (17,086)
Other current assets.................................. 36,129 (2,618) (15,394) (9,039) 2,048
Accounts payable and accrued expenses................. (345,147) 73,063 80,679 121,467 63,688
Billings in excess of costs and estimated earnings.... 125,032 (150,641) 80,403 36,176 80,911
Accrued bonuses....................................... (29,850) 213,684 (68,684)
Income taxes payable.................................. (1,706) 5,605 101,836 50,437 (107,442)
--------- -------- --------- --------- --------
Net cash provided by (used in) operating
activities........................................ 350,800 228,127 102,834 (47,833) (60,670)
--------- -------- --------- --------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment....................... (51,762) (106,760) (60,331) (59,000) (121,623)
Proceeds from sale of property and equipment.............. 56,901 41,833 4,000
Loans to related parties.................................. (100,000) (3,242) (19,377)
Receipts on loans to related parties...................... 7,138 12,294
Deposits.................................................. (24,000)
--------- -------- --------- --------- --------
Net cash used in investing activities............... (144,624) (53,101) (49,581) (55,000) (121,623)
--------- -------- --------- --------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from the issuance of long-term debt.............. 1,500 53,740 106,593
Repayments of long-term debt.............................. (76,855) (52,231) (37,486) (22,170) (29,041)
Repayment of loan to stockholders......................... (34,023) (15,318)
Net change in line of credit.............................. 140,750 (140,000)
Proceeds from issuance of stock........................... 46,311 28,541 28,541
--------- -------- --------- --------- --------
Net cash provided by (used in) financing
activities........................................ 77,683 (207,549) (8,945) 60,111 77,552
--------- -------- --------- --------- --------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS........ 283,859 (32,523) 44,308 (42,722) (104,741)
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR................ 298,493 582,352 549,829 549,829 594,137
--------- -------- --------- --------- --------
CASH AND CASH EQUIVALENTS, END OF YEAR...................... $ 582,352 $549,829 $ 594,137 $ 507,107 $489,396
========= ======== ========= ========= ========
SUPPLEMENTAL SCHEDULE OF NON-CASH FINANCING AND INVESTING
ACTIVITIES:
Equipment acquired through non-cash financing........... $ 25,008 $ 104,710
CASH PAYMENTS FOR:
Interest.................................................. $ 19,738 $ 17,083 $ 9,038 $ 4,098 $ 8,012
Taxes..................................................... $ 55,000 $ 12,500 $ 91,000
</TABLE>

See notes to financial statements.

F-146
<PAGE> 228

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

General -- Register Contracting Company, Inc. ("RCCI" or the "Company") was
incorporated on September 15, 1981 and is engaged in the business of general
contracting and commercial roofing throughout the southeastern United States
with the majority of its contracts in Florida. The work is generally performed
under fixed-price contracts. The lengths of the Company's contracts vary, but
are typically less than one year.

Interim Financial Information -- The interim financial statements as of
March 31, 1998 and for the six months ended March 31, 1997 and 1998 are
unaudited and certain information and footnote disclosures normally included in
annual financial statements prepared in accordance with generally accepted
accounting principles have been omitted. In the opinion of management all
adjustments, consisting only of normal recurring items, necessary to fairly
present the financial position, results of operations, and cash flows with
respect to the interim financial statements have been included. The results of
operations for the interim period are not necessarily indicative of the results
for an entire fiscal year.

Cash and Cash Equivalents -- The Company considers all highly liquid
investments purchased with an original maturity of three months or less to be
cash equivalents.

Contract Receivables -- The Company carries contract receivables at the
amounts it deems to be collectible. Accordingly, the Company provides allowances
for contract receivables it deems to be uncollectible based on management's best
estimates. Recoveries are recognized in the period they are received. The
ultimate amount of contract receivables that become uncollectible could differ
from those estimated.

Inventories -- Inventories consist primarily of materials and supplies and
are valued at the lower of cost or market using the first-in, first-out method.

Property and Equipment -- Property and equipment are stated at cost less
accumulated depreciation. Property and equipment are reviewed for impairment and
a provision recorded, if necessary, whenever events or circumstances indicate
that the carrying amount of an asset may not be recoverable. Routine repairs and
maintenance are expensed as incurred; improvements are capitalized at cost and
are amortized over the remaining useful life of the related asset. Depreciation
is recorded using straight-line methods over the estimated useful lives of the
related assets. Depreciation is provided over the following estimated useful
lives:

<TABLE>
<S> <C>
Building improvements....................................... 15 to 39 years
Service equipment........................................... 5 to 7 years
Furniture and equipment..................................... 5 to 7 years
Computer equipment.......................................... 5 years
Vehicles.................................................... 5 years
</TABLE>

Warranties -- The Company provides for future estimated warranty
obligations in the period in which the related revenue is recognized.

F-147
<PAGE> 229
REGISTER CONTRACTING COMPANY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Estimates made with respect to uncompleted projects are subject to change
as the project progresses and better estimates of project costs become
available. Revisions in cost and profit estimates during the course of the work
are reflected in the period in which the facts requiring revision become known.
Where a loss is forecast for a contract, the full amount of the anticipated loss
is recognized in the period in which it is determined that a loss will occur,
regardless of the stage of completion.

New Accounting Pronouncements -- Effective October 1, 1997, the Company
adopted Statement of Financial Accounting Standards No. 130, Reporting
Comprehensive Income. There are no significant differences between comprehensive
income and net income as reported in the Company's statements of operations.

2. CONTRACT RECEIVABLES

Contract receivables consist of the following:

<TABLE>
<CAPTION>
SEPTEMBER 30,
---------------------
1996 1997
-------- ----------
<S> <C> <C>
Completed contracts, including retention.................... $128,183 $ 821,008
Contracts in progress:
Current accounts.......................................... 294,312 234,365
Retention................................................. 211,331 104,676
-------- ----------
Subtotal.................................................... 633,826 1,160,049
Less: allowance for doubtful accounts....................... (20,916) (20,916)
-------- ----------
Contract receivables, net......................... $612,910 $1,139,133
======== ==========
</TABLE>

F-148
<PAGE> 230
REGISTER CONTRACTING COMPANY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

3. CONTRACTS IN PROGRESS

Information relative to contracts in progress is summarized as follows:

<TABLE>
<CAPTION>
SEPTEMBER 30,
-------------------------
1996 1997
----------- -----------
<S> <C> <C>
Costs incurred on uncompleted contracts.................... $ 1,884,145 $ 701,714
Estimated earnings......................................... 321,836 185,726
----------- -----------
Total...................................................... 2,205,981 887,440
Less: billings to date..................................... (2,190,510) (1,046,759)
----------- -----------
Net under (over) billings........................ $ 15,471 $ (159,319)
=========== ===========
</TABLE>

Included in the accompanying balance sheets under the following captions:

<TABLE>
<CAPTION>
SEPTEMBER 30,
--------------------
1996 1997
-------- ---------
<S> <C> <C>
Costs and estimated earnings in excess of billings.......... $109,739 $ 15,352
Billings in excess of costs and estimated earnings.......... (94,268) (174,671)
-------- ---------
Total............................................. $ 15,471 $(159,319)
======== =========
</TABLE>

4. PROPERTY AND EQUIPMENT

Property and equipment consist of the following:

<TABLE>
<CAPTION>
SEPTEMBER 30,
-----------------------
1996 1997
---------- ----------
<S> <C> <C>
Land........................................................ $ 96,266 $ 103,803
Building and improvements................................... 254,622 254,622
Service equipment and vehicles.............................. 607,043 690,156
Office equipment............................................ 86,415 89,451
---------- ----------
Subtotal.................................................... 1,044,346 1,138,032
Less: accumulated depreciation.............................. (605,816) (661,700)
---------- ----------
Property and equipment, net....................... $ 438,530 $ 476,332
========== ==========
</TABLE>

F-149
<PAGE> 231
REGISTER CONTRACTING COMPANY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

5. LONG-TERM DEBT

A summary of long-term debt is as follows:

<TABLE>
<CAPTION>
SEPTEMBER 30,
-------------------
1996 1997
-------- --------
<S> <C> <C>
$250,000 unsecured line of credit; interest is payable
monthly and accrues at the prime rate plus 1% (9.5% at
September 30, 1997); matures December 31, 1997; renewable
annually.................................................. $ 1,000 $ 1,000
Vehicle loans; interest accrues at various fixed rates
ranging from 7% to 9.14%; original maturities are from 24
to 36 months; collateralized by vehicles with a net book
value of $112,102, and $24,486 at September 30, 1996 and
1997, respectively........................................ 31,129 98,353
-------- --------
Total............................................. 32,129 99,353
Less: current portion....................................... (21,723) (44,558)
-------- --------
$ 10,406 $ 54,795
======== ========
</TABLE>

Aggregate maturities of long-term debt for years ending September 30 are as
follows:

<TABLE>
<S> <C>
1998........................................................ $44,558
1999........................................................ 38,140
2000........................................................ 16,655
-------
Total............................................. $99,353
=======
</TABLE>

6. INCOME TAXES

The Company's provisions for income taxes consists of the following:

<TABLE>
<CAPTION>
SEPTEMBER 30,
----------------------------
1995 1996 1997
------- ------- --------
<S> <C> <C> <C>
Current:
Federal................................................ $56,295 $144,586
State.................................................. 3,240 24,750
------- --------
59,535 169,336
------- --------
Deferred:
Federal................................................ $15,146 23,474 (78,008)
State.................................................. 3,702 5,721 (8,774)
------- ------- --------
18,848 29,195 (86,782)
------- ------- --------
$18,848 $88,730 $ 82,554
======= ======= ========
</TABLE>

The difference between the statutory federal income tax rate and the
Company's effective tax rate is as follows:

<TABLE>
<CAPTION>
SEPTEMBER 30,
-----------------------------
1995 1996 1997
------- ------- ---------
<S> <C> <C> <C>
Statutory federal tax rate.............................. 34.0% 34.0% 34.0%
State tax, net of federal benefit....................... 4.2 4.2 4.2
Other................................................... (7.2) (6.2) 26.2
------- ------- ---------
Effective rate.......................................... 31.0% 32.0% 64.4%
======= ======= =========
</TABLE>

F-150
<PAGE> 232
REGISTER CONTRACTING COMPANY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Deferred taxes have been recorded using the enacted tax rates expected to
apply to taxable income in the periods in which the deferred tax liabilities are
expected to be settled. The settlement of such deferred tax liability in 1997
was at a rate exceeding that previously recorded resulting in an effective rate
for 1997 in excess of the statutory rate.

Construction contracts are reported for tax purposes on the
completed-contract method and for financial statement purposes on the
percentage-of-completion method. Accelerated depreciation is used for tax
reporting, and straight-line depreciation is used for financial statement
reporting.

Components of the Company's deferred tax liabilities are as follows:

<TABLE>
<CAPTION>
SEPTEMBER 30,
------------------
1996 1997
-------- -------
<S> <C> <C>
Deferred tax assets:
Net operating loss carryforwards.......................... $ 16,929
Allowance for doubtful accounts........................... 5,856 $ 6,685
Vacation accrual.......................................... 3,516 3,516
Other..................................................... 24,717 49,823
-------- -------
Total............................................. 51,018 60,024
-------- -------
Deferred tax liabilities:
Contracts in progress..................................... 144,947 57,162
Depreciation.............................................. 12,730 22,739
-------- -------
Total............................................. 157,677 79,901
-------- -------
Net deferred tax liability........................ $106,659 $19,877
======== =======
</TABLE>

7. FAIR VALUE OF FINANCIAL INSTRUMENTS

8. MAJOR CUSTOMERS

At September 30, 1997, approximately $329,000 was due from one customer of
the Company. Total revenues under this contract represented 52% of the Company's
total contract revenues for the year ended September 30, 1997.

9. EMPLOYEE PROFIT SHARING PLAN

The Company sponsored a non-contributory employee profit sharing plan
adopted on September 27, 1984. Under the plan, employees who are 21 years of age
or older and who have been employed at least one year and completed at least
1,000 hours of service were eligible to participate. The plan provided for
discretionary contributions by the Company up to the maximum amount permitted
under the Internal

F-151
<PAGE> 233
REGISTER CONTRACTING COMPANY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Revenue Code. The Company's board of directors determines amounts to be
contributed to the plan on an annual basis which is largely determined by the
Company's performance over the preceding year. Contributions accrued for the
year ended September 30, 1996 were $25,000. There were no contributions for the
years ended September 30, 1995 or 1997. The Company terminated the plan
effective September 30, 1997, at which time the net assets of the plan were
disbursed to participants.

10. RELATED PARTY TRANSACTIONS

The Company has subcontracted with Gary Register, General Contractor, Inc.,
a company 100% owned and operated by a shareholder of RCCI. The costs related to
these subcontracts are reflected in "Cost of Contract Revenues Earned" and
amounted to $44,841, $214,473 and $7,545 for the years ended September 30, 1995,
1996, and 1997, respectively.

In April 1995, the Company loaned $100,000 to Gibbs and Register, Inc., a
company owned in part by shareholders of RCCI. This note is scheduled to be paid
off in January 1999, and earns interest at 10% compounded monthly. Interest
income related to this loan was $5,078, $10,563, and $9,363 for the years ended
September 30, 1995, 1996 and 1997, respectively. Through September 30, 1997,
principal payments received relating to this note amounted to $28,709.

Gibbs and Register, Inc. was issued performance bonds under RCCI's surety
policy during 1995, 1996 and 1997.

11. SUBSEQUENT EVENT

On May 8, 1998, the Company signed a stock purchase agreement with General
Roofing Services, Inc. (GRS) whereby GRS will acquire the Company for cash
concurrent with the consummation of an initial public offering of the common
stock of GRS, subject to certain conditions including consummation of the
offering.

* * * * * *

F-152
<PAGE> 234

- ------------------------------------------------------
- ------------------------------------------------------
NO DEALER, SALESPERSON OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS IN CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS, AND, IF GIVEN
OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED BY THE COMPANY OR ANY OF THE UNDERWRITERS. THIS PROSPECTUS DOES
NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF ANY OFFER TO BUY ANY
SECURITY OTHER THAN THE SHARES OF COMMON STOCK OFFERED BY THIS PROSPECTUS, NOR
DOES IT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF ANY OFFER TO BUY THE
SHARES OF COMMON STOCK BY ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR
SOLICITATION IS NOT AUTHORIZED, OR IN WHICH THE PERSON MAKING SUCH OFFER OR
SOLICITATION IS NOT QUALIFIED TO DO SO, OR TO ANY PERSON TO WHOM IT IS UNLAWFUL
TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR
ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION
THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO
THE DATE HEREOF.
---------------------
TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary.................... 3
Summary Pro Forma Combined Financial
Data................................ 7
Summary Individual Founding Company
Historical Financial Data........... 9
Risk Factors.......................... 11
The Company........................... 18
Use of Proceeds....................... 21
Capitalization........................ 22
Dividend Policy....................... 23
Dilution.............................. 23
Selected Historical and Pro Forma
Financial Data...................... 25
Management's Discussion and Analysis
of Financial Condition and Results
of Operations....................... 28
Business.............................. 54
Management............................ 63
Certain Transactions.................. 68
Security Ownership of Certain
Beneficial Owners and Management.... 70
The Combination....................... 71
Description of Capital Stock.......... 74
Shares Eligible for Future Sale....... 76
Underwriting.......................... 78
Legal Matters......................... 79
Experts............................... 79
Available Information................. 80
Index to Financial Statements......... F-1
</TABLE>

---------------------
UNTIL , 1998, ALL DEALERS EFFECTING TRANSACTIONS IN THE REGISTERED
SECURITIES, WHETHER OR NOT PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED
TO DELIVER A PROSPECTUS. THIS IS IN ADDITION TO THE OBLIGATION OF DEALERS TO
DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR
UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.
- ------------------------------------------------------
- ------------------------------------------------------

- ------------------------------------------------------
- ------------------------------------------------------
4,000,000 SHARES

GENERAL ROOFING SERVICES, INC.

COMMON STOCK
-------------------------
PROSPECTUS
-------------------------
THE ROBINSON-HUMPHREY COMPANY

BANCAMERICA ROBERTSON STEPHENS

RAYMOND JAMES & ASSOCIATES, INC.
, 1998

- ------------------------------------------------------
- ------------------------------------------------------
<PAGE> 235

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The following table sets forth an itemized statement of certain estimated
expenses incurred in connection with the issuance and distribution of the
securities being registered, other than underwriting discounts and commissions:

<TABLE>
<S> <C>
Securities and Exchange Commission registration fee......... $20,355.00
NASD filing fee............................................. 7,400.00
Nasdaq National Market listing fee..........................
Blue Sky fees and expenses..................................
Printing and engraving expenses.............................
Legal fees and expenses.....................................
Accounting fees and expenses................................
Registrar and Transfer Agent's fees and expenses............
Miscellaneous...............................................
----------
Total............................................. $
==========
</TABLE>

All amounts except the Securities and Exchange Commission registration fee,
the NASD filing fee and Nasdaq National Market listing fee are estimated.

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS

The Company has authority under the Florida General Corporation Act to
indemnify all directors and officers to the extent provided in such statute. The
Company's Articles of Incorporation provide that the Company shall indemnify its
directors to the fullest extent permitted by law either now or hereafter. The
Company has also entered into an agreement with each of its directors and
certain of its officers wherein it has agreed to indemnify each of them to the
fullest extent permitted by law.

At present, there is no pending litigation or proceeding involving a
director or officer of the Company as to which indemnification is being sought,
nor is the Company aware of any threatened litigation that may result in claims
for indemnification by any officer or director.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES

None.

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) Exhibits:

<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBITS
- ------- --------
<C> <C> <S>
1.1 -- Underwriting Agreement among the Registrant, The
Robinson-Humphrey Company, LLC, BancAmerica Robertson
Stephens and Raymond James & Associates, Inc.**
2.1 -- Stock Purchase Agreement dated May 12, 1998, by and among
the Registrant, Harrington-Scanlon Roofing Company, Inc., a
Kansas corporation, and its stockholders**
2.2 -- Stock Purchase Agreement dated May 8, 1998, by and among the
Registrant, Register Contracting Company, Inc., a Florida
corporation, Register & Childers Roof Repairs, Inc., a
Florida corporation, and their stockholders**
2.3 -- Stock Purchase Agreement dated May 13, 1998, by and among
the Registrant, S & B Roofing Services, Inc., a Michigan
corporation and its stockholders**
</TABLE>

II-1
<PAGE> 236

<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBITS
- ------- --------
<C> <C> <S>
2.4 -- Stock Purchase Agreement dated May 13, 1998, by and among
the Registrant, Anthony Roofing, Ltd., an Illinois
corporation, and its stockholders**
2.5 -- Stock Purchase Agreement dated May 12, 1998, by and among
the Registrant, Specialty Associates, Inc., a Wisconsin
corporation, SAI Wholesale Distributors, Inc., a Wisconsin
corporation, and their stockholders**
2.6 -- Stock Purchase Agreement dated May 13, 1998, by and among
the Registrant, Cyclone Roofing Company, a North Carolina
corporation, and its sole stockholder**
2.7 -- Stock Purchase Agreement dated May 19, 1998, by and among
the Registrant, Five-K Industries, Inc., a Georgia
corporation, and its sole stockholder**
2.8 -- Stock Purchase Agreement dated May 20, 1998, by and among
the Registrant, Advanced Roofing, Inc., a Florida
corporation, and its stockholders**
2.9 -- Stock Purchase Agreement dated May 12, 1998, by and among
the Registrant, Blackmore and Buckner Roofing, Inc., an
Indiana corporation, and its stockholders**
2.10 -- Stock Purchase Agreement dated May 13, 1998, by and among
the Registrant, Wright-Brown Roofing Company, a Michigan
corporation, and its stockholders**
2.11 -- Stock Purchase Agreement dated May 13, 1998, by and among
the Registrant, C.E.I. West Roofing Company, Inc., a
Colorado corporation, and its stockholders**
2.12 -- Stock Purchase Agreement dated May 13, 1998, by and among
the Registrant, C.E.I. Roofing, Inc., a Texas corporation,
and its stockholders**
2.13 -- Stock Purchase Agreement dated May 13, 1998, by and among
the Registrant, C.E.I. Florida, Inc., a Florida corporation,
and its stockholders**
2.14 -- Stock Purchase Agreement dated as of May 25, 1998, by and
among the Registrant, GRI of South Florida, Inc., a Florida
corporation, and its shareholder, GRI of West Florida, Inc.,
a Florida corporation, and its shareholder, GRI of Orlando,
Inc., a Florida corporation, and its shareholder, Dakota
Leasing, Inc., a Florida corporation, and its shareholder,
and General Roofing Acquisition Corp., a Florida
corporation, and its shareholder**
3.1 -- Articles of Incorporation of Registrant
3.2 -- Bylaws of Registrant**
4.1 -- Specimen Certificate for the Common Stock**
5.1 -- Opinion of Baker & McKenzie**
10.1 -- Employment Agreement dated as of February 16, 1998 between
the Registrant and Gregg E. Wallick**
10.2 -- Employment Agreement dated as of February 16, 1998 between
the Registrant and Eric B. Levine**
10.3 -- Employment Agreement dated as of February 16, 1998 between
the Registrant and Dale E. Eby**
10.4 -- Employment Agreement dated as of February 16, 1998 between
the Registrant and William A. Abberger III**
10.5 -- Indemnification Agreement dated May 26, 1998 between the
Registrant and Gregg E. Wallick**
10.6 -- Indemnification Agreement dated May 26, 1998 between the
Registrant and Eric B. Levine**
10.7 -- Indemnification Agreement dated May 26, 1998 between the
Registrant and Dale E. Eby**
10.8 -- Indemnification Agreement dated May 26, 1998 between the
Registrant and William A. Abberger III**
10.9 -- Indemnification Agreement dated May 26, 1998 between the
Registrant and Angela Pettus**
10.10 -- Indemnification Agreement dated May 26, 1998 between the
Registrant and Robert Brooker**
10.11 -- 1998 Stock Option and Restricted Stock Purchase Plan adopted
May 26, 1998**
10.12 -- Bank of America Commitment Letter**
</TABLE>

II-2
<PAGE> 237

<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBITS
- ------- --------
<C> <C> <S>
21.1 -- List of Subsidiaries of the Company**
23.1 -- Consent of Baker & McKenzie (included in Exhibit 5.1)**
23.2 -- Consents of Independent Auditors
23.3 -- Consent of Scott & Stringfellow, Inc., independent
appraisers**
24.1 -- Powers of Attorney (as set forth on the signature page of
the Registration Statement)**
27.1 -- Financial Data Schedules (for SEC use only)**
99.1 -- Consent of Francis X. Maguire, Proposed Director of the
Registrant**
99.2 -- Consent of Charles "Red" Scott, Proposed Director of the
Registrant**
99.3 -- Consent of David C. Willis, Proposed Director of the
Registrant**
99.4 -- Consent of Robert G. Shuler, Proposed Director of the
Registrant**
99.5 -- Consent of John C. Cook, Proposed Director of the
Registrant**
99.6 -- Consent of Joel A. Thompson, Proposed Director of the
Registrant**
99.7 -- Consent of Thomas E. Brown, Jr., Proposed Director of the
Registrant**
99.8 -- Consent of J. Patrick Millinor, Jr., Proposed Director of
the Registrant**
</TABLE>

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

* To be filed by amendment.

** Previously Filed.

(b) Financial Statement Schedules:

None.

ITEM 17. UNDERTAKINGS

The undersigned Registrant hereby undertakes:

(1) That for purposes of determining any liability under the
Securities Act, the information omitted from the form of prospectus filed
as part of the 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 the registration statement as of the time it was declared
effective.

(2) That 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 the
time shall be deemed to be the initial bona fide offering thereof.

(3) To provide to the Underwriters at the closing specified in the
Underwriting Agreement certificates in such denominations and registered in
such names as required by the Underwriters to permit prompt delivery to
each purchaser.

(4) That insofar as indemnification for liabilities arising under the
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions described in Item 14 hereof, 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 Act 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 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 of whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.

II-3
<PAGE> 238

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant has caused this amendment to the Form S-1 Registration Statement to
be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Pompano Beach, Florida, on the 31st day of July, 1998.

GENERAL ROOFING SERVICES, INC.

By: /s/ GREGG E. WALLICK
------------------------------------
Gregg E. Wallick
President and Chief Executive
Officer

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>

/s/ GREGG E. WALLICK President, Chief Executive July 31, 1998
- ----------------------------------------------------- Officer, Chairman of the
Gregg E. Wallick Board
(Principal Executive
Officer)

/s/ DALE E. EBY* Chief Financial Officer July 31, 1998
- ----------------------------------------------------- Treasurer and Assistant
Dale E. Eby Secretary
(Principal Financial and
Accounting Officer)

/s/ ERIC B. LEVINE* Senior Vice President of July 31, 1998
- ----------------------------------------------------- Corporate Development
Eric B. Levine

/s/ WILLIAM A. ABBERGER III* Senior Vice President of July 31, 1998
- ----------------------------------------------------- Operations
William A. Abberger III

*By: /s/ GREGG E. WALLICK
-------------------------------------------------
GREGG E. WALLICK
Attorney-in-fact
</TABLE>

II-4
<PAGE> 239

EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT
- ------- -------
<C> <C> <S>
3.1 -- Articles of Incorporation of Registrant
23.2 -- Consents of Independent Auditors
</TABLE>

<PAGE> 1
Exhibit 3.1

ARTICLES OF INCORPORATION

GENERAL ROOFING SERVICES, INC.

ARTICLE I

NAME
----

The name of this Corporation is General Roofing Services, Inc.
(hereinafter called the "Corporation"). The address of the principal office and
the mailing address of the Corporation is 951 South Andrews Avenue, Pompano
Beach, Florida 33069.

ARTICLE II

NATURE OF BUSINESS
------------------

This Corporation is being formed for the following purposes:

A. To engage in any and all lawful business or activity permitted under
the laws of the United States and the State of Florida.

B. To generally have and exercise all powers, rights and privileges
necessary and incident to carrying out properly the objects herein mentioned.

C. To do anything and everything necessary, suitable, convenient or
proper for the accomplishment of any of the purposes or the attainment of any or
all of the objects hereinbefore enumerated or incidental to the purposes and
powers of this Corporation or which at any time appear conductive thereto or
expedient.

ARTICLE III

CAPITAL STOCK
-------------

The aggregate number of shares of all classes of capital stock which
this Corporation shall have authority to issue is 100,000,000 shares, consisting
of (i) 90,000,000 shares of common stock, par value $0.01 per share (the "Common
Stock"), and (ii) 10,000,000 shares of preferred stock, par value $0.01 per
share (the "Preferred Stock"). The designations and the preferences, limitations
and relative rights of the Preferred Stock and the Common Stock of the
Corporation are as follows:

A. PROVISIONS RELATING TO THE PREFERRED STOCK

1. The Preferred Stock may be issued from time to time in one
or more classes or series, the shares of each class or series to have such
designations and powers, preferences and rights, and qualifications, limitations
and restrictions thereof as are stated and expressed herein and in the
resolution or resolutions providing for the issuance of such class or series
adopted by the Board of Directors of the Corporation (the "Board") as
hereinafter prescribed.

<PAGE> 2

2. Authority is hereby expressly granted to and vested in the
Board to authorize the issuance of the Preferred Stock from time to time in one
or more classes or series, to determine and take necessary proceedings fully to
effect the issuance and redemption of any such Preferred Stock, and, with
respect to each class or series of the Preferred Stock, to fix and state by the
resolution or resolutions from time to time adopted providing for the issuance
thereof the following:

(a) whether or not the class or series is to have voting
rights, full or limited, or is to be without voting rights;

(b) the number of shares to constitute the class or series and
the designations thereof;

(c) the preferences and relative, participating, optional or
other special rights, if any, and the qualifications, limitations or
restrictions thereof, if any, with respect to any class or series;

(d) whether or not the shares of any class or series shall be
redeemable, and, if redeemable, the redemption price or prices, the time or
times at which and the terms and conditions upon which such shares shall be
redeemable and the manner of redemption;

(e) whether or not the shares of a class or series shall be
subject to the operation of retirement or sinking funds to be applied to the
purchase or redemption of such shares for retirement, and if such retirement or
sinking fund or funds are established, the annual amount thereof and the terms
and provisions relative to the operation thereof;

(f) the dividend rate, whether dividends are payable in cash,
stock of the Corporation or other property, the conditions upon which and the
times when such dividends are payable, the preference to or the relation to the
payment of the dividends payable on any other class or classes or series of
stock, whether or not such dividend shall be cumulative or noncumulative, and,
if cumulative, the date or dates from which such dividends shall accumulate;

(g) the preferences, if any, and the amounts thereof which the
holders of any class or series thereof shall be entitled to receive upon the
voluntary or involuntary dissolution of, or upon any distribution of the assets
of, the Corporation;

(h) whether or not the shares of any class or series shall be
convertible into, or exchangeable for, the shares of any other class or classes
or of any other series of the same or any other class or classes of stock of the
Corporation and the conversion price or prices or ratio or ratios or the rate or
rates at which such conversion or exchange may be made, with such adjustments,
if any, as shall be stated and expressed or provided for in such resolution or
resolutions; and

(i) such other special rights and protective provisions with
respect to any class or series as the Board may deem advisable.

The shares of each class or series of the Preferred Stock may vary from
the shares of any other series thereof in any or all of the foregoing respects.
The Board may increase the number of shares of the Preferred Stock designated
for any existing class or series by a resolution adding to such class or series
authorized and unissued shares of the Preferred Stock not designated for any
other class or series. The Board may decrease the number of shares of the
Preferred Stock designated for any existing class or series by a resolution,
subtracting from such series unissued shares of the Preferred Stock designated
for such class or series, and the shares so subtracted shall become authorized,
unissued and undesignated shares of the Preferred Stock.

B. PROVISIONS RELATING TO THE COMMON STOCK. The Common Stock shall be
subject to the express terms of the Preferred Stock and any class or series
thereof.

<PAGE> 3

1. Except as otherwise required by law or as may be provided
by the resolutions of the Board authorizing the issuance of any class or series
of Preferred Stock, as hereinabove provided, all rights to vote and all voting
power shall be vested exclusively in the holders of the Common Stock.

2. Subject to the rights of the holders of the Preferred
Stock, the holders of the Common Stock shall be entitled to receive when, as and
if declared by the Board, out of funds legally available therefor, dividends
payable in cash, stock or otherwise.

3. Upon any liquidation, dissolution or winding-up of the
Corporation, whether voluntary or involuntary, and after the holders of the
Preferred Stock shall have been paid in full the amounts to which they shall be
entitled (if any) or a sum sufficient for such payment in full shall have been
set aside, the remaining net assets of the Corporation, if any, shall be divided
among and paid ratably to the holders of the Common Stock in accordance with
their respective rights and interests, to the exclusion of the holders of the
Preferred Stock.

C. GENERAL PROVISIONS

1. Except as may be provided by the resolutions of the Board
authorizing the issuance of any class or series of Preferred Stock, as
hereinabove provided, cumulative voting by any shareholder is hereby expressly
denied.

2. No shareholder of the Corporation shall have, by reason of
its holding shares of any class or series of stock of the Corporation, any
preemptive or preferential rights to purchase or subscribe for any other shares
of any class or series of the Corporation now or hereafter to be authorized, and
any other equity securities, or any notes, debentures, warrants, bonds, or other
securities convertible into or carrying options or warrants to purchase shares
of any class, now or hereafter to be authorized, whether or not the issuance of
any such shares, or such notes, debentures, bonds or other securities would
adversely affect the dividend, voting or other rights of such shareholder.

ARTICLE IV

TERM OF EXISTENCE
-----------------

This Corporation shall have perpetual existence unless sooner dissolved
in accordance with the laws of the State of Florida.

ARTICLE V

INITIAL REGISTERED OFFICE AND AGENT
-----------------------------------

The street address of the initial registered office of the Corporation
is 1201 Hays Street, Tallahassee, Florida 32301, and the name of the initial
registered agent of this Corporation at that address is Corporation Service
Company.

ARTICLE VI

DIRECTORS
---------

A. NUMBER AND TERM OF DIRECTORS

The Corporation's Board shall consist of not less than three directors,
with the exact number to be fixed from time to time by resolution of the Board.
The number of directors may be decreased at any time and

<PAGE> 4

from time to time by a majority of the directors then in office, but only to
eliminate vacancies existing by reason of the death, resignation, removal or
expiration of the term of one or more directors. No decrease in the number of
directors shall have the effect of shortening the term of any incumbent
director.

B. DIRECTOR VACANCIES; REMOVAL

Whenever any vacancy on the Corporation's Board shall occur due to
death, resignation, retirement, disqualification, removal, increase in the
number of directors, or otherwise, only a majority of directors in office,
although less than a quorum of the entire Board, may fill the vacancy or
vacancies for the balance of the unexpired term or terms, at which time a
successor or successors shall be duly elected by the shareholders of the
Corporation and qualified. Shareholders of the Corporation shall not, and shall
have no power to, fill any vacancy on the Board. Shareholders of the Corporation
may remove a director from office prior to the expiration of his or her term,
with or without cause by an affirmative vote of at least a majority of the
combined voting power of the outstanding shares of capital stock of the
Corporation entitled to vote for the election of directors, voting together as a
single class.

C. SHAREHOLDER NOMINATIONS OF DIRECTOR CANDIDATES

Only persons who are nominated in accordance with the
following procedures shall be eligible for election as directors of the
Corporation. Nominations of persons for election to the Board at an annual or
special meeting of shareholders may be made by or at the direction of the Board
by any nominating committee or person appointed by the Board or by any
shareholder of the Corporation entitled to vote for the election of directors at
the meeting who complies with the notice procedures set forth in this Article
VI, Paragraph C, provided, however, that nominations of persons for election to
the Board at a special meeting may be made only if the election of directors is
one of the purposes described in the special meeting notice required by Section
607.0705 of the Florida Business Corporation Act. Nominations of persons for
election at annual meetings, other than nominations made by or at the direction
of the Board, shall be made pursuant to timely notice in writing to the
Secretary of the Corporation. To be timely, a shareholder's notice must be
delivered to or mailed and received at the principal executive offices of the
Corporation, not less than one hundred twenty (120) days nor more than one
hundred eighty (180) days prior to the first anniversary of the date of the
Corporation's notice of annual meeting provided with respect to the previous
year's annual meeting; provided, however, that if no annual meeting was held in
the previous year or the date of the annual meeting has been changed to be more
than thirty (30) calendar days earlier than or sixty (60) calendar days after
such anniversary, such notice by the shareholder to be timely must be so
received not later than the close of business on the tenth (10th) day following
the date on which notice of the date of the annual meeting is given to
shareholders or made public, whichever first occurs. Such shareholder's notice
to the Secretary shall set forth (a) as to each person whom the shareholder
proposes to nominate for election or re-election as a director, (i) the name,
age, business address and residence address of the proposed nominee, (ii) the
principal occupation or employment of the proposed nominee, (iii) the class and
number of shares of capital stock of the Corporation which are beneficially
owned by the proposed nominee, and (iv) any other information relating to the
person that is required to be disclosed in solicitations for proxies for
election of directors pursuant to Rule 14a under the Securities Exchange Act of
1934, as amended; and (b) as to the shareholder giving the notice, (i) the name
and record address of the shareholder, and (ii) the class and number of shares
of capital stock of the Corporation which are beneficially owned by the
shareholder. The Corporation may require any proposed nominee to furnish such
other information as may reasonably be required by the Corporation to determine
the eligibility of such proposed nominee to serve as director of the
Corporation. No person shall be eligible for election as a director of the
Corporation unless nominated in accordance with the procedures set forth herein.
The Chairman of the meeting shall, if the facts warrant, determine and declare
to the meeting that a nomination was not made in accordance with the foregoing
procedure, and if he should so determine, he shall so declare to the meeting and
the defective nomination shall be disregarded.

<PAGE> 5

ARTICLE VII

SHAREHOLDER MEETINGS
--------------------

A. CALL OF SPECIAL SHAREHOLDERS MEETING

Except as otherwise required by law, special meetings of
shareholders of the Corporation may be called only by the Chairman of the Board
or the Chief Executive Officer of the Corporation or by the Board pursuant to a
resolution approved by a majority of the entire Board. Only business within the
purpose or purposes described in the special meeting notice required by Section
607.0705 of the Florida Business Corporation Act may be conducted at a special
shareholders' meeting.

B. ADVANCE NOTICE OF SHAREHOLDER PROPOSED BUSINESS FOR
ANNUAL MEETING

At an annual meeting of the shareholders, only such business
shall be conducted as shall have been properly brought before the meeting. To be
properly brought before an annual meeting, business must be either (a) specified
in the notice of meeting (or any supplement thereto) given by or at the
direction of the Board, (b) otherwise properly brought before the meeting by or
at the direction of the Board, or (c) otherwise properly brought before the
meeting by a shareholder. In addition to any other applicable requirements, for
business to be properly brought before an annual meeting by a shareholder, the
shareholder must have given timely notice thereof in writing to the Secretary of
the Corporation. To be timely, a shareholder's notice must be delivered to or
mailed and received at the principal executive offices of the Corporation, not
less than one hundred twenty (120) days nor more than one hundred eighty (180)
days prior to the first anniversary of the date of the Corporation's notice of
annual meeting provided with respect to the previous year's annual meeting;
provided, however, that if no annual meeting was held in the previous year or
the date of the annual meeting has been changed to be more than thirty (30)
calendar days earlier than or sixty (60) calendar days after such anniversary,
such notice by the shareholder to be timely must be so received not later than
the close of business on the tenth (10th) day following the date on which notice
of the date of the annual meeting is given to shareholders or made public,
whichever first occurs. Such shareholder's notice to the Secretary of the
Corporation shall set forth as to each matter the shareholder proposes to bring
before the annual meeting (i) a brief description of the business desired to be
brought before the annual meeting and the reasons for conducting such business
at the annual meeting, (ii) the name and record address of the shareholder
proposing such business, (iii) the class and number of shares of capital stock
of the Corporation which are beneficially owned by the shareholder, and (iv) any
material interest of the shareholder in such business. The Chairman of an annual
meeting shall, if the facts warrant, determine and declare to the meeting that
business was not properly brought before the meeting in accordance with the
requirements of this Article VII, Paragraph B, and if he should so determine, he
shall so declare to the meeting and any such business not properly brought
before the meeting shall not be transacted. Notwithstanding anything in the
Bylaws to the contrary, no business shall be conducted at the annual meeting
except in accordance with the procedures set forth in this Article VII,
Paragraph B; provided, however, that nothing in this Article VII, Paragraph B
shall be deemed to preclude discussion by any shareholder of any business
properly brought before the annual meeting in accordance with said procedure.

ARTICLE VIII

INDEMNIFICATION
---------------

This Corporation shall indemnify any and all of its directors,
officers, employees or agents or former directors, officers, employees or agents
or any person or persons who may have served at its request as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise in which it owns shares of capital stock or of which
it is a creditor, to the full extent permitted by law in existence now or
hereafter. Said indemnification shall include, but not be limited to, the
expenses, including

<PAGE> 6

the cost of any judgments, fines, settlements and counsel's fees, actually and
necessarily paid or incurred in connection with any action, suit or proceedings,
whether civil, criminal, administrative or investigative, and any appeals
thereof, to which any such person or his legal representative may be made a
party or may be threatened to be made a party, by reason of his being or having
been a director, officer, employee or agent as herein provided. The foregoing
right of indemnification shall not be exclusive of any other rights to which any
director, officer, employee or agent may be entitled as a matter of law or which
he may be lawfully granted.

ARTICLE IX

INCORPORATOR
------------

The name and address of the person signing these Articles of
Incorporation is:

Michael H. Hoffman
Baker & McKenzie
701 Brickell Avenue, Suite 1600
Miami, Florida 33131

IN WITNESS WHEREOF, the undersigned incorporator has executed these
Articles of Incorporation on this 7th day of May, 1998.

/s/ Michael H. Hoffman
--------------------------------
Michael H. Hoffman

<PAGE> 7

ARTICLES OF AMENDMENT
TO
ARTICLES OF INCORPORATION
OF
GENERAL ROOFING SERVICES, INC.

Pursuant to the provisions of Section 607.1006 of the Florida Business
Corporation Act, the undersigned Florida profit corporation adopts the following
Articles of Amendment to its Articles of Incorporation:

1. The name of the corporation is General Roofing Services,
Inc. (the "Corporation").

2. In order to create three classes of the Corporation's Board
of Directors (the "Board"), Article VI of the Articles of Incorporation of the
Corporation is hereby amended by adding the following subsection D. to Article
VI:

"ARTICLE VI
DIRECTORS

D. CLASSIFICATION OF DIRECTORS.

The Board shall be divided into three classes as nearly equal
in number as possible, hereby designated as Class I, Class II and Class
III. The term of office of the initial Class I directors shall expire
at the 1999 annual meeting of the shareholders of the Corporation, the
term of office of the initial Class II directors shall expire at the
2000 annual meeting of the shareholders of the Corporation and the term
of office of the initial Class III directors shall expire at the 2001
annual meeting of the shareholders of the Corporation. For the purposes
hereof, the initial Class I, Class II and Class III directors shall be
those directors elected at the 1998 annual meeting of the shareholders
of the Corporation and designated as members of such Class. At each
annual meeting of the shareholders of the Corporation after the 1998
annual meeting, directors to replace those of a Class whose terms
expire at such annual meeting shall be elected to hold office until the
third succeeding annual meeting and until their respective successors
shall have been duly elected and shall qualify. If the number of
directors is hereafter increased, the directors then in office shall
select the class or classes to which the newly created directorships
shall be assigned so as to make all classes as nearly equal in number
as possible."

3. This Amendment to the Articles of Incorporation of the
Corporation shall be effective at the time of filing with the Secretary of State
of the State of Florida.

4. This Amendment to the Articles of Incorporation of the
Corporation was unanimously adopted and approved by the Board of Directors and
shareholders of the Corporation on July 30, 1998, and the number of votes cast
by the shareholders of the Corporation for the Amendment to the Articles of
Incorporation of the Corporation was sufficient for such approval.

IN WITNESS WHEREOF, the undersigned has executed these
Articles of Amendment this 30th day of July, 1998.

GENERAL ROOFING SERVICES, INC.

By: /s/ Gregg E. Wallick
-----------------------
Gregg E. Wallick
President and Chief Executive Officer

<PAGE> 1

Exhibit 23.2

INDEPENDENT AUDITORS' CONSENT

We consent to the use in this Registration Statement of General Roofing
Services, Inc. ("GRS") on Form S-1 of our report dated May 26, 1998, on the
financial statement of GRS appearing in the Prospectus, which is part of this
Registration Statement.

We also consent to the reference to us under the heading "Experts" in such
Prospectus.

DELOITTE & TOUCHE LLP
Miami, Florida

July 28, 1998

<PAGE> 2

INDEPENDENT AUDITORS' CONSENT

We consent to the use in this Registration Statement of General Roofing
Services, Inc. on Form S-1 of our report dated December 12, 1997, January 20,
1998 as to the final paragraph of Note 6, and February 16, 1998 as to Note 11
on the combined financial statements of GRI of South Florida, Inc., GRI of
Orlando, Inc., GRI of West Florida, Inc. and Dakota Leasing, Inc., appearing in
the Prospectus, which is part of this Registration Statement.

We also consent to the reference to us under the heading "Experts" in such
Prospectus.

DELOITTE & TOUCHE LLP
Miami, Florida

July 28, 1998

<PAGE> 3

INDEPENDENT AUDITORS' CONSENT

We consent to the use in this Registration Statement of General Roofing
Services, Inc. on Form S-1 of our report dated May 15, 1998, on the combined
financial statements of Harrington - Scanlon Roofing Company, Inc., appearing
in the Prospectus, which is part of this Registration Statement.

We also consent to the reference to us under the heading "Experts" in such
Prospectus.

DELOITTE & TOUCHE LLP
Dallas, Texas

July 28, 1998

<PAGE> 4

INDEPENDENT AUDITORS' CONSENT

We consent to the use in this Registration Statement of General Roofing
Services, Inc. on Form S-1 of our report dated April 10, 1998 and May 20, 1998
as to the first paragraph of Note 12, on the combined financial statements of
Advanced Roofing, Inc., Advanced Leasing, Inc., K&M Warehouse, Inc. and Hi-Rise
Crane, Inc. appearing in the Prospectus, which is part of this Registration
Statement.

We also consent to the reference to us under the heading "Experts" in such
Prospectus.

DELOITTE & TOUCHE LLP
Miami, Florida

July 28, 1998

<PAGE> 5

INDEPENDENT AUDITORS' CONSENT

We consent to the use in this Registration Statement of General Roofing
Services, Inc. on Form S-1 of our report dated April 27, 1998 and May 12, 1998
as to Note 12, on the combined financial statements of Specialty Associates,
Inc. and Affiliate, appearing in the Prospectus, which is part of this
Registration Statement.

We also consent to the reference to us under the heading "Experts" in such
Prospectus.

DELOITTE & TOUCHE LLP
Dallas, Texas

July 28, 1998

<PAGE> 6

INDEPENDENT AUDITORS' CONSENT

We consent to the use in this Registration Statement of General Roofing
Services, Inc. on Form S-1 of our report dated October 31, 1997 and May 8, 1998
as to Note 11, on the financial statements of Register Contracting Company,
Inc., appearing in the Prospectus, which is part of this Registration
Statement.

We also consent to the reference to us under the heading "Experts" in such
Prospectus.

DELOITTE & TOUCHE LLP
Jacksonville, Florida

July 28, 1998

<PAGE> 7

INDEPENDENT AUDITORS' CONSENT

We consent to the use in this Registration Statement of General Roofing
Services, Inc. on Form S-1 of our report dated May 8, 1998 and May 13, 1998 as
to Note 13, on the financial statements of Slavik, Butcher and Baecker
Construction Company, Inc., appearing in the Prospectus, which is part of this
Registration Statement.

We also consent to the reference to us under the heading "Experts" in such
Prospectus.

DELOITTE & TOUCHE LLP
Atlanta, Georgia

July 28, 1998

<PAGE> 8

INDEPENDENT AUDITORS' CONSENT

We consent to the use in this Registration Statement of General Roofing
Services, Inc. on Form S-1 of our report dated April 23, 1998 and May 13, 1998
as to Note 11, on the financial statements of Anthony Roofing, Ltd., appearing
in the Prospectus, which is part of this Registration Statement.

We also consent to the reference to us under the heading "Experts" in such
Prospectus.

DELOITTE & TOUCHE LLP
Dallas, Texas

July 28, 1998

<PAGE> 9

INDEPENDENT AUDITORS' CONSENT

We consent to the use in this Registration Statement of General Roofing
Services, Inc. on Form S-1 of our report dated April 30, 1998 and May 19, 1998
as to Note 12, on the financial statements of Five-K Industries, Inc. and
Subsidiary, appearing in the Prospectus, which is part of this Registration
Statement.

We also consent to the reference to us under the heading "Experts" in such
Prospectus.

DELOITTE & TOUCHE LLP
Atlanta, Georgia

July 28, 1998

<PAGE> 10

INDEPENDENT AUDITORS' CONSENT

We consent to the use in this Registration Statement of General Roofing
Services, Inc. on Form S-1 of our report dated April 29, 1998 and May 13, 1998
as to Note 12, on the financial statements of Wright-Brown Roofing Company,
appearing in the Prospectus, which is part of this Registration Statement.

We also consent to the reference to us under the heading "Experts" in such
Prospectus.

DELOITTE & TOUCHE LLP
Atlanta, Georgia

July 28, 1998

<PAGE> 11

INDEPENDENT AUDITORS' CONSENT

We consent to the use in this Registration Statement of General Roofing
Services, Inc. on Form S-1 of our report dated May 19, 1998, on the financial
statements of Cyclone Roofing Company, appearing in the Prospectus, which is
part of this Registration Statement.

We also consent to the reference to us under the heading "Experts" in such
Prospectus.

DELOITTE & TOUCHE LLP
Atlanta, Georgia

July 28, 1998

<PAGE> 12

INDEPENDENT AUDITORS' CONSENT

We consent to the use in this Registration Statement of General Roofing
Services, Inc. on Form S-1 of our report dated April 23, 1998 and May 12, 1998
as to Note 11, on the financial statements of Blackmore and Buckner Roofing,
Inc., appearing in the Prospectus, which is part of this Registration
Statement.

We also consent to the reference to us under the heading "Experts" in such
Prospectus.

DELOITTE & TOUCHE LLP
Atlanta, Georgia

July 28, 1998

<PAGE> 13

INDEPENDENT AUDITORS' CONSENT

We consent to the use in this Registration Statement of General
Roofing Services, Inc. on Form S-1 of our report on the 1995, 1996 and 1997
combined financial statements of C.E.I. Roofing, Inc., C.E.I. Florida, Inc. and
C.E.I. West Roofing Company, Inc., dated February 18, 1998, except for Note
13, as to which the date is May 13, 1998, appearing in the Prospectus, which is
part of this Registration Statement.

We also consent to the reference to us under the heading "Experts" in
such Prospectus.

BELEW AVERITT LLP
Dallas, Texas

July 28, 1998

<PAGE> 14

INDEPENDENT AUDITORS' CONSENT

We consent to the use in this Registration Statement of General Roofing
Services, Inc. on Form S-1 of our report on the 1996 and 1995 financial
statements of Anthony Roofing, Ltd., dated May 22, 1998, appearing in the
Prospectus, which is part of this Registration Statement.

We also consent to the reference to us under the heading "Experts" in
such Prospectus.

DUGAN & LOPATKA CPAs, PC
Wheaton, Illinois

July 28, 1998

<PAGE> 15

INDEPENDENT AUDITORS' CONSENT

We hereby consent to the use in the Registration Statement of General Roofing
Services, Inc. on Form S-1 of our report dated April 28, 1997 related to the
consolidated financial statements of Five-K Industries, Inc. and Subsidiary,
appearing in the Prospectus, which is part of the Registration Statement.

We also consent to the reference to us under the heading "Experts" in such
Prospectus.

BEARDEN & SMITH, P.C.
Atlanta, Georgia

July 28, 1998

<PAGE> 16

INDEPENDENT AUDITOR'S CONSENT

We consent to the use in this Registration Statement of General Roofing
Services, Inc. on Form S-1 of our report on the 1996 and 1995 financial
statements of Blackmore and Buckner Roofing, Inc. dated January 29, 1997,
appearing in the Prospectus, which is part of this Registration Statement.

We also consent to the reference to us under the heading "Experts" in
such Prospectus.

/s/ Blue & Co., LLC
- --------------------------------
Blue & Co., LLC
Indianapolis, IN

July 28, 1998