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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q


(Mark One) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
[x] THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2002

OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________ to __________

Commission File Number: 033-78954

SCOTSMAN HOLDINGS, INC.
(Exact name of Registrant as specified in its Charter)


Delaware 52-1862719
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

8211 Town Center Drive 21236
Baltimore, Maryland (Zip Code)
(Address of principal executive offices)

(410) 931-6000
(Registrant's telephone number, including area code)

None
(Former name,former address and former fiscal year-if changed since last report)


Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No __

As of August 12, 2002, 6,194,799 shares of common stock ("Common Stock")
of the Registrant were outstanding.








SCOTSMAN HOLDINGS, INC.

INDEX

FORM 10-Q


PART I - FINANCIAL INFORMATION Page
----

Safe Harbor Statement 1

Item 1. Financial Statements


Consolidated Balance Sheets at June 30, 2002 2
and December 31, 2001

Consolidated Statements of Operations for the three 3
and six months ended June 30, 2002 and 2001

Consolidated Statements of Cash Flows for the six 4
months ended June 30, 2002 and 2001

Notes to Consolidated Financial Statements 6


Item 2. Management's Discussion and Analysis of 10
Financial Condition and Results of Operations



PART II - OTHER INFORMATION


Item 6. Exhibits and Reports on Form 8-K 15






SAFE HARBOR STATEMENT - CAUTIONARY NOTICE REGARDING FORWARD-LOOKING STATEMENTS

Some of the statements in this Form 10-Q for the quarter ended June 30,
2002 constitute "forward-looking statements" within the meaning of Section 27A
of the Securities Act of 1933, as amended (the "Securities Act") and Section 21E
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). These
forward-looking statements involve known and unknown risks, uncertainties and
other factors, which may cause actual results to differ materially from future
results expressed or implied by these forward-looking statements. These factors
include, among others, the following: substantial leverage and our ability to
service debt; changing market trends in the mobile office industry; general
economic and business conditions including a prolonged or substantial recession;
our ability to finance fleet and branch expansion and to locate and finance
acquisitions; our ability to implement our business and growth strategy and
maintain and enhance our competitive strengths; our ability to obtain financing
for general corporate purposes; intense industry competition; availability of
key personnel; industry over-capacity; and changes in, or the failure to comply
with, government regulations. No assurance can be given as to future results and
neither we nor any other person assumes responsibility for the accuracy and
completeness of these forward-looking statements. Consequently, you should not
place undue reliance on these forward-looking statements, which speak only as of
the date hereof. We undertake no obligation to publicly release the result of
any revision to these forward-looking statements that may be made to reflect
events or circumstances after the date hereof or to reflect the occurrence of
unanticipated events.


1






PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

SCOTSMAN HOLDINGS, INC. AND SUBSIDIARY
Consolidated Balance Sheets
June 30,
2002 December 31,
(Unaudited) 2001
----------- -----------
Assets (In thousands)


Cash $ 560 $ 586
Trade accounts receivable, net of allowance for
doubtful accounts of $1,317 in 2002 and $1,298 in 2001 69,198 74,336
Prepaid expenses and other current assets 23,978 25,628
Rental equipment, net of accumulated depreciation of
$191,039 in 2002 and $178,046 in 2001 860,421 866,867
Property and equipment, net 75,163 73,782
Deferred financing costs, net 26,894 10,696
Goodwill 168,378 168,378
Other intangible assets, net 3,309 3,679
Other assets 21,615 21,034
--------- ---------
$1,249,516 $1,244,986
========= =========
Liabilities and stockholders' equity (deficit)

Accounts payable and accrued expenses $ 49,310 $ 50,297
Rents billed in advance 20,004 25,796
Long-term debt 1,019,316 1,022,972
Deferred income taxes 152,551 147,200
--------- ---------

Total liabilities 1,241,181 1,246,265
--------- ---------

Stockholders' equity (deficit):
Common stock, $.01 par value. Authorized 10,000,000
shares; issued 9,507,407 shares in 2002 and 2001 95 95
Additional paid-in capital 233,926 233,926
Cumulative foreign currency translation adjustment (10) (1,505)
Retained earnings 70,262 62,065
--------- ---------

304,273 294,581

Less treasury stock, - 3,312,608 common shares in 2002 and
3,310,808 common shares in 2001, at cost (295,938) (295,860)
--------- ---------

Total stockholders' equity (deficit) 8,335 (1,279)
--------- ---------
$1,249,516 $1,244,986
========= =========
See accompanying notes to consolidated financial statements.



2





SCOTSMAN HOLDINGS, INC. AND SUBSIDIARY
Consolidated Statements of Operations
Three and six months ended June 30, 2002 and 2001
(Unaudited)

Three months ended Six months ended
June 30, June 30,
----------------------- ----------------------
2002 2001 2002 2001
---- ---- ---- ----
(In thousands except share and per share amounts)
Revenues

Leasing $ 57,447 $ 59,538 $115,643 $117,767
Sales:
New units 20,582 22,728 41,265 36,295
Rental equipment 5,518 5,124 10,179 10,263
Delivery and installation 22,495 21,858 49,104 41,021
Other 10,055 10,649 19,773 19,917
------- ------- -------- --------
Total revenues 116,097 119,897 235,964 225,263
------- ------- ------- -------

Costs of sales and services
Leasing:
Depreciation and amortization 10,973 10,395 21,696 20,765
Other direct leasing costs 12,053 10,580 23,541 19,945
Sales:
New units 17,295 18,516 34,371 29,496
Rental equipment 4,213 3,902 7,938 7,873
Delivery and installation 18,174 16,680 40,180 32,016
Other 1,963 1,736 4,024 3,289
------ ------ ------- -------
Total costs of sales and services 64,671 61,809 131,750 113,384
------ ------ ------- -------

Gross profit 51,426 58,088 104,214 111,879
------ ------ ------- -------

Selling, general and administrative expenses 19,847 20,786 41,368 42,270
Other depreciation and amortization 3,316 4,797 6,650 9,303
Interest, including amortization of deferred
financing costs 21,361 21,928 42,532 45,138
Non-cash charge for casualty loss 1,500 1,500
------ ------ ------ ------
Total operating expenses 44,524 49,011 90,550 98,211
------ ------ ------ ------

Income before income taxes 6,902 9,077 13,664 13,668
Income tax expense 2,423 4,128 5,467 6,195
------- ------ ------- ------
Net Income $ 4,479 $ 4,949 $ 8,197 $ 7,473
======= ====== ======= ======

Earnings per common share $ .72 $ .80 $ 1.32 $ 1.21
======== ====== ======= =======
Earnings per common share, assuming dilution $ .69 $ .76 $ 1.25 $ 1.14
======== ====== ======= =======

Weighted average shares outstanding 6,194,799 6,196,620 6,195,575 6,196,647
========= ========= ========= =========

See accompanying notes to consolidated financial statements.


3






SCOTSMAN HOLDINGS, INC. AND SUBSIDIARY
Consolidated Statements of Cash Flows
Six months ended June 30, 2002 and 2001
(Unaudited)

2002 2001
---- ----
(In thousands)
Cash flows from operating activities:

Net income $ 8,197 $ 7,473
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 33,227 32,636
Provision for bad debts 1,819 1,705
Deferred income tax expense 5,351 6,155
Non-cash option compensation expense - 249
Gain on sale of rental equipment (2,241) (2,390)
Decrease (increase) in trade accounts receivable 3,319 (12,151)
(Decrease) increase in accounts payable and
accrued expenses, including reserve for casualty
loss in 2001 (987) 2,207
Other (4,076) (1,232)
------ ------

Net cash provided by operating activities 44,609 34,652
------ ------

Cash flows from investing activities:
Rental equipment additions (25,234) (67,658)
Proceeds from sales of rental equipment 10,179 10,263
Purchases of property and equipment, net (4,767) (7,701)
Net assets of business acquired -- (26,114)
------ ------

Net cash used in investing activities (19,822) (91,210)
------ ------



4



SCOTSMAN HOLDINGS, INC. AND SUBSIDIARY
Consolidated Statements of Cash Flows (continued)
Six months ended June 30, 2002 and 2001
(Unaudited)



2002 2001
---- ----
(In thousands)
Cash flows from financing activities:

Proceeds from debt 874,949 284,135
Repayment of debt (878,753) (227,351)
Amortization of bond discount 149 -
Increase in deferred financing costs (21,080) (415)
Payments to acquire treasury stock (78) (4)
--------- ---------

Net cash (used in) provided by financing activities (24,813) 56,365
--------- ---------

Net decrease in cash (26) (193)

Cash at beginning of period 586 2,549
--------- ---------

Cash at end of period $ 560 $ 2,356
========= =========

Supplemental cash flow information:
Cash paid for income taxes $ 465 $ 267
========= =========


Cash paid for interest $ 37,559 $ 48,237
========= =========


See accompanying notes to consolidated financial statements.

5



SCOTSMAN HOLDINGS, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Unaudited)
(Dollars in thousands, except share amounts)


(1) ORGANIZATION AND BASIS OF PRESENTATION

Scotsman Holdings, Inc. (Holdings or the Company) was organized in
November, 1993 for the purpose of acquiring Williams Scotsman, Inc.
(Scotsman). The Company conducts business solely as a holding company,
the only significant asset of which is the capital stock of Scotsman.
Therefore, any cash dividends to be paid on the Company's common stock,
or cash interest to be paid on notes of the Company are dependent upon
the cash flow of Scotsman.


(2) FINANCIAL STATEMENTS

The financial information for the six months ended June 30, 2002 and 2001
has not been audited. In the opinion of management, the unaudited
financial statements contain all adjustments (consisting only of normal,
recurring adjustments) necessary to present fairly the Company's
financial position as of June 30, 2002, the consolidated statement of
operations for the six and three months ended June 30, 2002 and 2001, and
the consolidated statement of cash flows for the six months ended June
30, 2002 and 2001. The results of operations for the periods ended June
30, 2002 is not necessarily indicative of the operating results expected
for the full year.

The balance sheet at December 31, 2001 has been derived from the audited
financial statements at that date, but does not include all of the
information and footnotes required by generally accepted accounting
principles for complete financial statements. Certain information and
footnote disclosure normally included in financial statements prepared in
accordance with generally accepted accounting principles have been
omitted. It is suggested that these financial statements be read in
conjunction with the financial statements and notes thereto included in
the Company's latest Form 10-K. Certain prior year amounts have been
reclassified to conform to current year presentation.


(3) NEW ACCOUNTING PRONOUNCEMENT

In May 2002, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 145, Rescission of FASB Statements No.
4, 44, and 64, Amendment of FASB Statement No. 13, and Technical
Corrections, effective for fiscal years beginning after May 15, 2002.
With the rescission of SFAS No. 4, gains and losses from the
extinguishment of debt should be classified as extraordinary items
only if they meet the criteria in APB Opinion No. 30.

The Company has adopted SFAS No. 145 effective January 1, 2002. As a
result, the $1.9 million of deferred financing costs relating to the
Company's former credit facility that was expensed during the six months
ended June 30, 2002 is included in interest expense.


6



SCOTSMAN HOLDINGS, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements (Continued)


(4) GOODWILL AND OTHER INTANGIBLE ASSETS

The Company has adopted SFAS No. 142 effective January 1, 2002. Under
SFAS No. 142 goodwill and certain identified intangibles with indefinite
lives are no longer amortized, rather they are subject to annual
impairment tests. The Company performed the first of these required tests
during the first quarter of 2002 and determined that goodwill is not
impaired. Prior to the adoption of this standard, goodwill was amortized
on a straight line basis over 20 to 40 years. Amortization expense for
the six months ended June 30, 2002 was $.4 million, which represents the
amortization related to the identified intangible assets still required
to be amortized under SFAS No. 142. These include covenants not to
compete and customer base, which are being amortized on a straight line
basis over periods of 24 to 228 months. Amortization expense relating to
these identified intangibles for each of the next five years is as
follows:

2002 $732
2003 650
2004 495
2005 484
2006 152

Under SFAS No. 142 assembled workforce is not considered to be an
intangible asset. The Company has reclassified this asset to goodwill.
The effect of the adoption of SFAS No. 142 as of June 30, 2002 and
December 31, 2001 is summarized in the following tables:




------------- June 30, 2002 ----------- ----------- December 31, 2001-----------
Gross Net Gross Net
Carrying Accumulated Book Carrying Accumulated Book
Amount Amortization Value Amount Amortization Value
-------- ------------ ------- -------- ------------ -------

Goodwill $183,164 $ 15,215 $167,949 $183,164 $ 15,215 $167,949

Intangible
assets with
indefinite
lives as of
January 1,
2002
---------------------

Assembled
workforce $ 801 $ 372 $ 429 $ 801 $ 372 $ 429



7




SCOTSMAN HOLDINGS, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements (Continued)


(4) GOODWILL AND OTHER INTANGIBLE ASSETS (continued)

------------- June 30, 2002 ------------ ----------- December 31, 2001-----------
Gross Net Gross Net
Carrying Accumulated Book Carrying Accumulated Book
Amount Amortization Value Amount Amortization Value
-------- ------------ ------- -------- ------------ -------

Intangible
assets with
finite lives
as of January 1,
2002
---------------------

Non-
compete

agreements $3,128 $1,460 $1,668 $3,128 $1,142 $1,986
Customer
base 2,000 359 1,641 2,000 307 1,693
------ ------ ------ ------ ------ ------
$5,128 $1,819 $3,309 $5,128 $1,449 $3,679
====== ====== ====== ====== ====== ======

As required by SFAS No. 142, the results for the prior year's quarters
have not been restated. A reconciliation of net income as if SFAS No. 142
had been adopted as of January 1, 2001 is presented below for the six and
three months ended June 30, 2001.



Six Months Three Months
Ended Ended
June 30, 2001 June 30, 2001
(In thousands) (In thousands)
-------------- --------------


Reported net income $ 7,473 $ 4,949
Add back:
Goodwill amortization (net of tax) 2,296 1,148
------- -------
Adjusted net income $ 9,769 $ 6,097
======= =======

Earnings per share:
Reported net income $ 1.21 $ 0.80
======= =======
Adjusted net income $ 1.58 $ 0.98
======= =======
Earnings per share, assuming dilution:
Reported net income $ 1.14 $ 0.76
======= =======
Adjusted net income $ 1.50 $ 0.93
======= =======



8



SCOTSMAN HOLDINGS, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements (Continued)


(5) EARNINGS PER SHARE

Earnings per common share is computed by dividing net earnings by the
weighted average number of common shares outstanding during the periods.

The following table sets forth the components of the weighted-average
shares outstanding for the basic and diluted earnings per share
computations:


Three months ended Six months ended
June 30, June 30,
--------------------------- -------------------------
2002 2001 2002 2001
---- ---- ---- ----

Weighted-average shares - basic earnings

per share 6,194,799 6,196,620 6,195,575 6,196,647

Effect of employee stock options 347,510 332,942 347,538 333,112
--------- --------- --------- ---------

Weighted-average shares - diluted earnings
per share 6,542,309 6,529,562 6,543,113 6,529,759
========= ========= ========= =========



(6) COMPREHENSIVE INCOME

Total comprehensive income was $9,692 and $7,560 for the six months ended
June 30, 2002 and 2001, respectively. Total comprehensive income was
$6,056 and $5,577 for the three months ended June 30, 2002 and 2001,
respectively, which consists of net income and the change in the foreign
currency translation adjustment.


9



Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.

Forward Looking Statements

The following discussion and analysis should be read in conjunction
with the unaudited condensed consolidated financial statements included
elsewhere in this report. The terms "company," "we," "our," and "us" refer to
Scotsman Holdings Inc. and its subsidiary. The following discussion and analysis
contains forward-looking statements that involve risks and uncertainties. Our
actual results could differ materially from those anticipated in these
forward-looking statements as a result of certain factors, including those
contained in our Annual Report on Form 10-K for the year ended December 31, 2001
under the headings "Business", "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and elsewhere in that report. See
the Safe Harbor Statement at the beginning of this report.

Critical Accounting Policies and Estimates

General. This discussion and analysis of our financial
condition and results of operations is based upon our unaudited consolidated
financial statements, which have been prepared in accordance with accounting
principles generally accepted in the United States. The preparation of these
financial statements requires us to make estimates and judgments that affect the
reported amounts of assets, liabilities, revenues and expenses, and related
disclosure of contingent liabilities. On an on-going basis, we evaluate
estimates, including those related to depreciation of rental equipment, bad
debts, contingencies and litigation, intangible assets, and income taxes. We
base our estimates on historical experience and on various other assumptions
that are believed to be reasonable under the circumstances, the results of which
form the basis for making judgments about the carrying values of assets and
liabilities that are not readily apparent from other sources. Actual results may
differ from these estimates under different assumptions or conditions.

In December 2001, the Securities and Exchange Commission issued a
statement regarding the selection and disclosure by public companies of critical
accounting policies and practices. The Commission indicated that a critical
accounting policy is one which is both important to the portrayal of a company's
financial condition and results, and requires management's most difficult,
subjective or complex judgments, often as a result of the need to make estimates
about the effect of matters that are inherently uncertain. We believe the
following critical accounting policies affect our more significant judgments and
estimates used in the preparation of the consolidated financial statements.

Depreciation of rental equipment. We depreciate rental equipment over
its estimated useful life, after giving effect to an estimated salvage value.
The useful life of our rental equipment is determined based on our estimate of
the period over which the asset will generate revenue, and the residual value is
determined based on our estimate of the minimum value we could realize from the
asset after this period. The lives and residual values are subject to periodic
evaluation and may be affected by, among other factors, changes in building
codes, legislation, regulations, local permitting and internal factors which may
include, but are not limited to, changes in equipment specifications or
maintenance policies. If these estimates change in the future, we may be
required to recognize increased or decreased depreciation expense for these
assets.

10


Allowance for doubtful accounts. We are required to estimate the
collectibility of our trade receivables. Accordingly, allowances for doubtful
accounts are maintained for estimated losses resulting from the inability of our
customers to make required payments. We evaluate a variety of factors in
assessing the ultimate realization of these receivables including the current
credit-worthiness of customers. The allowance for doubtful accounts is
determined based on historical collection results in addition to an ongoing
review of specific customers. If the financial condition of our customers were
to deteriorate, resulting in an impairment of their ability to make payments,
additional allowances may be required, resulting in decreased net income.

Contingencies. We are subject to proceedings, lawsuits, and other
claims related to environmental, product and other matters, and are required to
assess the likelihood of any adverse judgments or outcomes to these matters as
well as potential ranges of probable losses. A determination of the amount of
reserves required, if any, for these contingencies is made after analysis of
each individual matter. The required reserves may change in the future due to
new developments in each matter or changes in approach such as a change in
settlement strategy in dealing with these matters.

Goodwill and Intangible Impairment. We have significant intangible
assets related to goodwill and other acquired intangibles. The determination of
related estimated useful lives and whether or not these assets are impaired
involves significant judgments. Changes in strategy and/or market conditions
could significantly impact these judgments and require adjustments to recorded
asset balances.

Income Taxes. As part of the process of preparing our consolidated
financial statements, we are required to estimate income taxes in each of the
jurisdictions in which we operate. The process involves estimating actual
current tax expense along with assessing temporary differences resulting from
differing treatment of items for book and tax purposes. These timing differences
result in deferred tax assets and liabilities, which are included in our
consolidated balance sheet. We record a valuation allowance to reduce our
deferred tax assets to the amount that is more likely than not to be realized.
We have considered future taxable income and ongoing tax planning strategies in
assessing the need for the valuation allowance.


Results of Operations

Three Months Ended June 30, 2002 Compared with Three Months Ended June 30, 2001.

Revenues in the quarter ended June 30, 2002 were $116.1 million, a $3.8
million or 3.2% decrease from revenues of $119.9 million in the same period of
2001. The decrease primarily resulted from a $2.1 million or 3.5% decrease in
leasing revenue and a $2.1 million or 9.4% decrease in sales of new units. The
decrease in leasing revenue is the result of an approximate 4% decrease in the
average fleet utilization to 78%. The decrease in average fleet utilization and
sales of new units is attributable to the continued soft economy and related
business conditions.

Gross profit for the quarter ended June 30, 2002 was $51.4 million, a $6.7
million or 11.5% decrease from the second quarter 2001 gross profit of $58.1
million. This decrease is primarily a result of a 10.7% decrease in leasing
gross profit of $4.1 million, a 22.7% or $1.0 million decrease in new unit sales
gross profit, a 16.9% or $.9 million decrease in delivery and installation gross


11


profit, and a 9.0% or $.8 million decrease in other gross profit. The decreases
in leasing and new unit sales gross profits are a result of the decrease in
revenue described above. Additionally, leasing margins decreased from 64.8% in
the quarter ended June 30, 2001 to 59.9% in the same period in 2002. Excluding
depreciation and amortization, leasing margins decreased 3.2% from 82.2% in the
quarter ended June 30, 2001 to 79.0% in the same period in 2002. This margin
suppression was attributable to a decline in average fleet utilization combined
with fleet quality improvement initiatives. The decrease in the delivery and
installation gross profit is the result of competitive pressures, an unfavorable
mix of lower margin, modular building projects over the same period in 2001, and
additional redeployment costs incurred to move fleet within neighboring markets
in lieu of purchasing new rental equipment. The decrease in other gross profit
is attributable to a decrease in higher margin ancillary products, primarily
steps and charges for granting insurance waivers, related to the decrease in
average fleet utilization.

Selling, general and administrative (SG&A) expenses for the quarter ended
June 30, 2002 were $19.8 million, a $1.0 million or 4.5% decrease from the
second quarter of 2001 SG&A expenses of $20.8 million. The overall decreases in
SG&A expense are due to our continued cost control initiatives that commenced in
the second half of 2001, partially offset by increased insurance costs.

Interest expense decreased by approximately $.6 million or 2.6% to $21.4
million for the three months ended June 30, 2002 from $21.9 million in the same
period in 2001. This decrease is the result of a decrease of approximately 200
basis points in effective interest rates on our variable rate debt for the three
months, partially offset by (a) incremental bond interest expense on the
additional $150 million of senior notes and (b) the additional amortization of
deferred financing fees, both those incurred relating to the additional $150
million of senior notes and our new credit facility.

The decrease in the effective income tax rate was primarily due to goodwill,
which was not deductible for tax purposes, no longer being amortized. The impact
of the non-amortization increased net income by $1.1 million for the three
months ended June 30, 2002. See Note 4 Goodwill and Other Intangible Assets.

Six Months Ended June 30, 2002 Compared with Six Months Ended June 30, 2001.

Revenues in the six months ended June 30, 2002 were $236.0 million, a $10.7
million or 4.7% increase from revenues of $225.3 million in the same period of
2001. The increase primarily resulted from an $8.1 million or 19.7% increase in
delivery and installation revenue, a $5.0 million or 13.7% increase in sales of
new units, partially offset by a $2.1 million or 1.8% decrease in leasing
revenue. The decrease in leasing revenue is the result of an approximate 4%
decrease in the average fleet utilization to 78%. The decrease in average fleet
utilization is attributable to the continued soft economy and related business
conditions. The increase in delivery and installation revenue and sales of new
units is primarily attributable to several large school projects, the majority
of which occurred in the first quarter.

Gross profit for the six months ended June 30, 2002 was $104.2 million, a
$7.7 million or 6.9% decrease from the same period of 2001 of $111.9 million.
This decrease is primarily a result of a 8.6% decrease in leasing gross profit
of $6.6 million, and a 5.3% or $.9 million decrease in other gross profit. The
decrease in leasing gross profit is a result of the decrease in leasing revenue
described above and a decrease in leasing margins from 65.4% in the six months
ended June 30, 2001 to 60.9% in the same period in 2002. Excluding depreciation


12


and amortization, leasing margins decreased 3.5% from 83.1% in the six months
ended June 30, 2001 to 79.6% in the same period in 2002. This margin suppression
was attributable to a decline in average fleet utilization combined with fleet
quality improvement initiatives. The decrease in other gross profit is
attributable to a decrease in higher margin ancillary products, primarily steps
and charges for granting insurance waivers, related to the decrease in average
fleet utilization.

SG&A expenses for the six months ended June 30, 2002 were $41.4 million, a
$.9 million or 2.1% decrease from SG&A expenses of $42.3 million for the first
six months of 2001. The overall decreases in SG&A expense are due to our
continued cost control initiatives that commenced in the second half of 2001,
partially offset by increased insurance costs.

Interest expense decreased by approximately $2.6 million or 5.8% to $42.5
million for the six months ended June 30, 2002 from $45.1 million in the same
period in 2001. This decrease is the result of a decrease of approximately 290
basis points in effective interest rates on our variable rate debt for the six
months, partially offset by (a) incremental bond interest expense on the
additional $150 million of senior notes and (b) the additional amortization of
deferred financing fees, both those incurred relating to the additional $150
million of senior notes and our new credit facility.

The decrease in the effective income tax rate was primarily due to goodwill,
which was not deductible for tax purposes, no longer being amortized. The impact
of the non-amortization increased net income by $2.3 million for the six months
ended June 30, 2002. See Note 4 Goodwill and Other Intangible Assets.

Liquidity and Capital Resources

During the six months ended June 30, 2002 and 2001, our principal source of
funds consisted of cash flow from operating activities of $44.6 million and
$34.7 million, respectively. These were largely generated by the rental of units
from our lease fleet. In addition, financing activities were a major source of
funds for the six months ended June 30, 2001.

We believe that EBITDA provides the best indication of our financial
performance and provides the best measure of our ability to meet historical debt
service requirements. We define EBITDA as earnings before deducting interest,
income taxes, depreciation, and amortization. In 2001, EBITDA is adjusted to
exclude a $1.5 million noncash charge related to a casualty loss. We utilize
EBITDA when interpreting operating trends and results of operations of our core
business operations. Accordingly, we believe that EBITDA provides additional
information with respect to our overall operating performance and our ability to
incur and service debt, make capital expenditures and meet working capital
requirements. However, EBITDA should not be considered in isolation or as a
substitute to cash flow from operations, net income, or other measures of
performance prepared in accordance with generally accepted accounting principles
or as a measure of a company's profitability or liquidity. Our EBITDA decreased
by $6.1 million or 6.7% to $84.6 million for the first half of 2002 compared to
$90.7 million for the same period of 2001. This decrease in EBITDA is a result
of the decrease in gross profit described above.

Cash flow used in investing activities was $19.8 million and $91.2 million
for the six months ended June 30, 2002 and 2001, respectively. Our primary
capital expenditures are for the discretionary purchase of new units for the
lease fleet and units purchased through acquisitions. We seek to maintain our
lease fleet in good condition at all times and generally increase the size of

13


our lease fleet only in those local or regional markets experiencing economic
growth and established unit demand. The decline in cash flow used in investing
activities between the six months ended June 30, 2002 and June 30, 2001 is
primarily attributable to (a) a $42.4 million reduction in discretionary
purchases of new lease fleet units in response to the continued soft economy and
related business conditions and the resultant decline in our average fleet
utilization, and (b) the February 1, 2001 net asset acquisition for
approximately $26.1 million which added over 1,600 units at a value of
approximately $21.5 million.

Cash used in financing activities of $24.8 million for the six months ended
June 31, 2002 was primarily for deferred financing fees incurred relating to the
issuance of additional notes and our new credit facility. Cash provided by
financing activities of $56.3 million during the first six months of 2001 was
primarily from borrowings under our then existing revolving credit facility.

In February 2002, we issued $150.0 million of additional 9.875% senior notes
due 2007 under our existing indenture. Net proceeds from the issuance were used
to repay borrowings under our former revolving credit facility. On March 26,
2002, we entered into a new loan agreement that provides for a $460 million
revolving credit facility, a $210 million term loan, both maturing on December
31, 2006, and up to an additional $30 million in term or revolver commitments.
In May 2002, we borrowed an additional $30 million under term loans, the
proceeds from which were used to pay down revolver borrowings.

Availability under the Credit Agreement was $161.6 million at June 30, 2002.
We believe we will have sufficient liquidity under our new revolving line of
credit and from cash generated from operations to fund our operations for the
next 12 months.


14



PART II - OTHER INFORMATION


Item 6. Exhibits and Reports on Form 8-K

(a) Exhibits


99.1 Certification pursuant to 18 U.S.C. Section 1350 as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002 for Gerard E. Holthaus, Chief Executive Officer of the
Company

99.2 Certification pursuant to 18 U.S.C. Section 1350 as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002 for Gerard E. Keefe, Chief Financial Officer of the
Company



(b) Reports on Form 8-K

None



15



Exhibit Number

99.1-- Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002 for Gerard E. Holthaus,
Chief Executive Officer of the Company

In connection with the Quarterly Report of Scotsman Holdings, Inc. (the
"Company") on Form 10-Q for the period ending June 30, 2002 as filed
with the Securities and Exchange Commission on the date hereof (the
"Report"), I, Gerard E. Holthaus, Chief Executive Officer of the
Company certify to my knowledge, pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13
(a) or 15 (d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents,
in all material respects, the financial condition and result
of operations of the Company.


/s/ Gerard E. Holthaus
Gerard E. Holthaus
Chief Executive Officer

August 12, 2002



16



Exhibit Number

99.2-- Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002 for Gerard E. Keefe, Chief
Executive Officer of the Company

In connection with the Quarterly Report of Scotsman Holdings, Inc. (the
"Company") on Form 10-Q for the period ending June 30, 2002 as filed
with the Securities and Exchange Commission on the date here of (the
"Report"), I, Gerard E. Keefe, Chief Executive Officer of the Company
certify to my knowledge, pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13
(a) or 15 (d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in
all material respects, the financial condition and result of
operations of the Company.


/s/ Gerard E. Keefe
------------------------
Gerard E. Keefe
Chief Financial Officer

August 12, 2002


17



SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.


SCOTSMAN HOLDINGS, INC.



By: /s/ Gerard E. Keefe
-------------------------------
Gerard E. Keefe
Senior Vice President and
Chief Financial Officer

Dated: August 12, 2002



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