SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                    Form 10-Q
               QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934


                 For the quarterly period ended January 31, 2000


  Commission      Registrant; State of Incorporation;            IRS EMPLOYER
  File Number     Address; and Telephone Number               Identification No.

  333-52529       MMH HOLDINGS, INC.                              39-1924039
                  (a Delaware Corporation)
                  315 W. Forest Hill Avenue
                  Oak Creek, Wisconsin  53154
                  (414) 764-6200

  333-52527       MORRIS MATERIAL HANDLING, INC.                  39-1716155
                  (a Delaware Corporation)
                  315 W. Forest Hill Avenue
                  Oak Creek, Wisconsin  53154
                  (414) 764-6200

Indicate  by check mark  whether  the  registrants  (1) have  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
registrants  were required to file such  reports),  and (2) have been subject to
such filing requirements for the past 90 days.

                                    Yes X No

Indicate the number of shares  outstanding  of each of the  issuers'  classes of
common stock, as of the latest practicable date (March 20, 2000):

MMH Holdings, Inc.                 Nonvoting  common  stock,  $.01  Par  Value,
                                   4,350 shares outstanding.  Voting common
                                   stock, $.01 Par Value,
                                   10,169 shares outstanding.

Morris Material Handling, Inc.     Common stock, $.01 Par Value, 100 shares
                                   outstanding. MMH Holdings, Inc. holds all of
                                   the outstanding common stock of
                                   Morris Material Handling, Inc.

<PAGE>

                               MMH HOLDINGS, INC.
                         MORRIS MATERIAL HANDLING, INC.

                                      INDEX


  Introduction                                                                2


  Part I -Financial Information:

  Item 1.      Financial Statements

  MMH Holdings, Inc.

   Condensed Balance Sheets                                                   4
   Condensed Statements of Operations and Comprehensive Income (Loss)         5
   Condensed Statements of Cash Flows                                         6
   Statements of Preferred Stock and Shareholders' Equity                     7


 Morris Material Handling, Inc.


   Condensed Balance Sheets                                                   8
   Condensed Statements of Operations and Comprehensive Income (Loss)         9
   Condensed Statements of Cash Flows                                        10
   Statements of Shareholder's Equity                                        11


 Notes to Financial Statements of
   MMH Holdings, Inc. and
   Morris Material Handling, Inc.                                            12

 Item 2. Management's Discussion and Analysis of
   Financial Condition and Results of Operations of
    MMH Holdings, Inc. and Morris Material
    Handling, Inc.                                                           27

 Item 3. Quantitative and Qualitative Disclosures about Market Risk          37

Part II - Other Information:

  Item 1.   Legal Proceedings                                                38
  Item 2.   Changes in Securities                                            38
  Item 3.   Defaults upon Senior Securities                                  38
  Item 4.   Submission of Matters to a Vote of Security Holders              38
  Item 5.   Other Information                                                38
  Item 6.   Exhibits and Reports on Form 8-K                                 38

Introduction

MMH  Holdings,  Inc.  ("Holdings")  is  a  holding  company  whose  sole  direct
subsidiary  is  Morris  Material   Handling,   Inc.  ("MMH"),   a  manufacturer,
distributor  and  service  provider  of   "through-the-air"   material  handling
equipment with operations in the United States,  United  Kingdom,  South Africa,
Singapore,  Canada,  Australia,  Thailand,  Chile and Mexico. Unless the context
requires  otherwise,  references  to the  "Company" in this combined 10-Q are to
MMH, its  subsidiaries  and their  predecessors.  For periods prior to March 30,
1998, references to the Company are to the  "through-the-air"  material handling
equipment business (the "MHE Business") of Harnischfeger  Corporation ("HarnCo")
and those subsidiaries and affiliates of HarnCo that were engaged therein.

This combined Form 10-Q is separately filed by MMH Holdings,  Inc. and by Morris
Material Handling,  Inc. The unaudited interim financial statements presented in

<PAGE>

this combined  report  (collectively,  the "Financial  Statements")  include the
financial  statements of Holdings,  as well as separate financial statements for
MMH. Information contained herein relating to any individual Registrant is filed
by such Registrant on its own behalf.

Certain  sections  of this Form 10-Q,  including  "Management's  Discussion  and
Analysis of Financial  Condition  and Results of  Operations,"  contain  various
forward looking  statements  within the meaning of Section 21E of the Securities
Exchange  Act of 1934,  which  represent  management's  expectations  or beliefs
concerning  future events.  The  Registrants  caution that those  statements are
further qualified by important factors that could cause actual results to differ
from those in the forward  looking  statements.  Factors that might cause such a
difference  include,   without  limitation,   general  economic  conditions  and
competition in the markets in which the Registrants'  operations are located and
are detailed  herein under  "Management's  Discussion  and Analysis of Financial
Condition and Results of  Operations - Cautionary  Factors."  Consequently,  all
forward-looking  statements  made  herein  are  qualified  by  these  cautionary
statements.  There  can be no  assurance  that the  actual  results,  events  or
developments referenced herein will occur or be realized.

<PAGE>

<TABLE>

                               MMH HOLDINGS, INC.
                            CONDENSED BALANCE SHEETS
                             (Dollars in Thousands)

                                     ASSETS
<CAPTION>

                                                                  January 31,   October 31,
                                                                          2000          1999
                                                                   ----------    -----------
                                                                            (Unaudited)
Current Assets
<S>                                                                  <C>         <C>
   Cash and cash equivalents                                         $     237   $   3,929
   Accounts receivable-net                                              62,982      64,481
   Inventories                                                          39,907      39,994
   Other current assets                                                  8,611       7,842
                                                                     ---------   ---------
                                                                       111,737     116,246

Property, Plant and Equipment
   Land and improvements                                                 3,354       3,349
   Buildings                                                            23,087      23,235
   Machinery and equipment                                              45,005      45,219
                                                                     ---------   ---------
                                                                        71,446      71,803

   Less accumulated depreciation                                       (31,685)    (30,829)
                                                                     ---------   ---------
                                                                        39,761      40,974
                                                                     ---------   ---------
Other Assets
   Goodwill                                                             41,190      42,844
   Debt financing costs                                                 15,859      16,398
   Other                                                                10,452      10,374
                                                                     ---------   ---------
                                                                        67,501      69,616
                                                                     ---------   ---------
                                                                     $ 218,999   $ 226,836
                                                                     =========   =========

                         LIABILITIES AND SHAREHOLDERS' EQUITY

                                                                   January 31,   October 31,
                                                                          2000          1999
                                                                   ----------    -----------
                                                                            (Unaudited)
Current Liabilities
  Short-term notes payable and current
   portion of long-term obligations (Note 6)                         $     443   $     383
  Revolving Credit Facility Borrowings (Note 6)                         23,645      27,925
  Term Loans (Note 6)                                                   49,107      52,225
  Acquisition Facility Line Borrowings (Note 6)                         12,094      12,430
  Senior Notes (Note 6)                                                200,000     200,000
  Bank overdrafts                                                        2,759       1,367
  Trade accounts payable                                                18,392      26,757
  Employee compensation and benefits                                     8,165       8,020
  Advance payments and progress billings                                10,717       8,336
  Accrued warranties                                                     1,637       1,821
  Accrued interest                                                       7,345       1,804
  Income taxes payable                                                   4,371       2,205
  Other current liabilities                                             10,882       9,791
                                                                     ---------   ---------
                                                                       349,557     353,064

Other Long-Term Obligations                                              2,655       2,784
Other Long-Term Liabilities                                              1,221       1,307
Minority Interest                                                          301         504
Commitments and Contingencie
Mandatorily Redeemable Preferred Stock                                 111,710     108,245
Shareholders' Equity                                                  (246,445)   (239,068)
                                                                     ---------   ---------
                                                                     $ 218,999   $ 226,836
                                                                     =========   =========
</TABLE>

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


<PAGE>

<TABLE>

                               MMH HOLDINGS, INC.
       CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
                                   (UNAUDITED)
                             (Dollars in Thousands)
<CAPTION>

                                             For the Three Months
                                               Ended January 31,
                                                 2000         1999
                                              -------    --------
Revenues
<S>                                           <C>        <C>
   Equipment and Part Sales                   $ 52,165   $ 53,065
   Service Sales                                14,554     14,855
                                              --------   --------
   Net Sales                                    66,719     67,920
   Other Income - Net                             --          102
                                              --------   --------

                                                66,719     68,022

Cost of Sales                                   50,872     50,614

Selling, General and Administrative Expenses    16,860     15,933
                                              --------   --------

Operating Income (Loss)                         (1,013)     1,475

Gain on Sale of a Business                       6,380       --

Interest Expense - Net                          (7,750)    (6,908)
                                              --------   --------

Loss Before Income Taxes and
   Minority Interest                            (2,383)    (5,433)

Benefit (Provision) for Income Taxes            (1,788)     2,453
Minority Interest                                   16          6
                                              --------   --------

Net Loss                                        (4,155)    (2,974)

Foreign Currency Translation Adjustments           243       (970)
                                              --------   --------

Comprehensive Income (Loss)                   $ (3,912)  $ (3,944)
                                              ========   ========
</TABLE>

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

<PAGE>

<TABLE>

                               MMH HOLDINGS, INC.
                       CONDENSED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
                             (Dollars in Thousands)
<CAPTION>

                                                             For the Three Months
                                                               Ended January 31,
                                                                2000        1999
                                                            --------   ---------
Operating Activities
<S>                                                        <C>         <C>
    Net income (loss)                                      $ (4,155)   $ (2,974)
    Add (deduct) - items not affecting
    cash provided by operating activities:
       Depreciation and amortization                          2,445       1,806
       Amortization of debt financing costs                     585         493
       Deferred income taxes - net                             --        (2,957)
       Gain on sale of business                              (6,380)       --
       Other                                                     (6)         (6)
    Changes in working  capital,
     excluding the effects of  acquisition  opening
     balance sheets:
       Accounts receivable                                      805      11,912
       Inventories                                           (1,229)        810
       Other current assets                                    (574)     (3,747)
       Trade accounts payable and bank overdrafts            (6,587)     (8,317)
       Advance payments and progress billings                 2,319      (1,349)
       Accrued interest                                       5,524       4,836
       Other current liabilities                              3,263      (2,909)
                                                           --------    --------
Net cash provided by (used for) operating activities         (3,990)     (2,402)
                                                           --------    --------

Investment and Other Transactions
    Fixed asset additions - net                                (334)     (1,634)
    Capitalized software                                       (624)       (276)
    Acquisition of businesses - net of cash acquired           --        (4,989)
    Net proceeds on divestiture of business                   9,115        --
    Other - net                                                  79         126
                                                           --------    --------
Net cash used for investment and other transactions           8,236      (6,773)
                                                           --------    --------

Financing Activities
    Changes in short-term debt
     and notes payable                                        1,920      10,354
    Repayments of Revolving Credit Facility borrowings       (6,200)     (1,200)
    Repayment of Term Loans                                  (3,100)       --
    Proceeds from/(repayments of)
     Acquisition Facility Line borrowings                      (336)      1,235
    Repayments of long-term debt                                (87)       (337)
    Payment of  fees for amendment
       of Credit Facility                                      (133)       --
                                                           --------    --------
Net cash provided by (used for)
   financing activities                                      (7,936)     10,052
                                                           --------    --------
Effect of Exchange Rate Changes on
 Cash and Cash Equivalents                                       (2)        (51)
                                                           --------    --------
Increase (decrease) in Cash
  and Cash Equivalents                                       (3,692)        826
Cash and Cash Equivalents
    Beginning of Period                                       3,929       2,534
                                                           --------    --------
    End of Period                                          $    237    $  3,360
                                                           ========    ========
</TABLE>

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

<PAGE>
<TABLE>


                                                          MMH HOLDINGS, INC.
                                         STATEMENTS OF PREFERRED STOCK AND SHAREHOLDERS' EQUITY
                                               FOR THE THREE MONTHS ENDED JANUARY 31, 2000
                                                             (UNAUDITED)
                                                       (Dollars in Thousands)
<CAPTION>

                                                              Preferred Stock
                                     -----------------------------------------------------------------------------------------------
                                           Series A                    Series B                 Series C
                                     -----------------------------------------------------------------------------------------------
                                     Shares       Carrying     Shares          Carrying     Shares        Carrying
                                     Outstanding  Value        Outstanding     Value        Outstanding   Value          Total
                                     -----------------------------------------------------------------------------------------------

<S>                                  <C>        <C>               <C>        <C>               <C>         <C>            <C>
Balance at October 31, 1999          68,741     $  67,443         5,750      $   5,808         34,633      $  34,994      $ 108,245

Net loss                               --            --            --             --             --             --             --

Change in
foreign currency translation           --            --            --             --             --             --             --

Preferred stock dividends              --           2,062          --              176           --            1,082          3,320

Issuance of non-voting common shares   --            --            --             --             --             --             --

Amortization of
preferred stock discount               --             145          --             --             --             --              145
                                    -----------------------------------------------------------------------------------------------
Balance at January 31, 2000          68,741     $  69,650         5,750      $   5,984         34,633      $  36,076      $ 111,710
                                    ===============================================================================================
</TABLE>

<TABLE>
<CAPTION>

                                      Common Stock          Parent           Accumulated
                                    -------------------     Investment/      Other                       Total
                                    Shares        Par       Additional       Comprehensive  Retained     Shareholders'
                                    Outstanding   Value     Paid-in-Capital  Loss           Earnings     Equity
                                    ------------------------------------------------------------------------------------------------

<S>                                  <C>            <C>      <C>            <C>            <C>            <C>
Balance at October 31, 1999          12,099         $--      $(121,860)     $  (3,428)     $ (113,780)     $(239,068)

Net loss                               --            --            --             --           (4,155)        (4,155)

Change in
foreign currency translation           --            --            --             243             --             243

Preferred stock dividends              --            --            --             --           (3,320)        (3,320)

Issuance of non-voting common shares  2,420          --            --             --              --              --

Amortization of
preferred stock discount               --            --            --             --             (145)          (145)
                                     -----------------------------------------------------------------------------------------------
Balance at January 31, 2000          14,519          $--      $(121,860)     $  (3,185)    $ (121,400)     $(246,445)
                                     ===============================================================================================
</TABLE>

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

<PAGE>

<TABLE>

                       MORRIS MATERIAL HANDLING, INC.
                            CONDENSED BALANCE SHEETS
                             (Dollars in Thousands)

                                     ASSETS

<CAPTION>
                                                               January 31,  October 31,
                                                                    2000          1999
                                                               ----------   ----------
                                                                      (Unaudited)

Current Assets
<S>                                                             <C>         <C>
   Cash and cash equivalents                                    $     237   $   3,929
   Accounts receivable-net                                         62,982      64,481
   Inventories                                                     39,907      39,994
   Other current assets                                             8,611       7,842
                                                                ---------   ---------
                                                                  111,737     116,246
                                                                ---------   ---------

Property, Plant and Equipment
   Land and improvements                                            3,354       3,349
   Buildings                                                       23,087      23,235
   Machinery and equipment                                         45,005      45,219
                                                                ---------   ---------
                                                                   71,446      71,803

   Less accumulated depreciation                                  (31,685)    (30,829)
                                                                ---------   ---------
                                                                   39,761      40,974
                                                                ---------   ---------

Other Assets
   Goodwill                                                        41,190      42,844
   Debt financing costs                                            15,859      16,398
   Other                                                           10,452      10,374
                                                                ---------   ---------
                                                                   67,501      69,616
                                                                ---------   ---------
                                                                $ 218,999   $ 226,836
                                                                =========   =========

                          LIABILITIES AND SHAREHOLDER'S EQUITY

 Current Liabilities
   Short-term notes payable
    portion of long-term obligations (Note 6)                   $     443   $     383
   Revolving Credit Facility Borrowings (Note 6)                   23,645      27,925
   Term Loans (Note 6)                                             49,107      52,225
   Acquisition Facility Line Borrowings (Note 6)                   12,094      12,430
   Senior Notes (Note 6)                                          200,000     200,000
   Bank overdrafts                                                  2,759       1,367
   Trade accounts payable                                          18,392      26,757
   Employee compensation andbenefits                                8,165       8,020
   Advance payments andprogress billings                           10,717       8,336
   Accrued warranties                                               1,637       1,821
   Accrued interest                                                 7,345       1,804
   Income taxes payable                                             4,371       2,205
   Other current liabilities                                       10,882       9,791
                                                                ---------   ---------
                                                                  349,557     353,064

 Other Long-Term Obligations                                        2,655       2,784
 Other Long-Term Liabilities                                        1,221       1,307
 Minority Interest                                                    301         504
 Commitments and Contingencies (Note 7)
 Shareholders' Equity                                            (134,735)   (130,823)
                                                                ---------   ---------
                                                                $ 218,999   $ 226,836
                                                                =========   =========
</TABLE>

The accompanying notes are an integral part of the financial statement

<PAGE>


<TABLE>

       CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
                                   (UNAUDITED)
                             (Dollars in Thousands)
<CAPTION>

                                                          For the Three Months
                                                             Ended January 31,
                                                         -----------------------
                                                            2000           1999
                                                         --------      ---------
Revenues
<S>                                                      <C>           <C>
   Equipment and Part Sales                              $ 52,165      $ 53,065
   Service Sales                                           14,554        14,855
                                                         --------      --------
   Net Sales                                               66,719        67,920
   Other Income - Net                                        --             102
                                                         --------      --------

                                                           66,719        68,022

Cost of Sales                                              50,872        50,614

Selling, General and Administrative Expenses               16,860        15,933
                                                         --------      --------

Operating Income (Loss)                                    (1,013)        1,475

Gain on Sale of a Business                                  6,380          --

Interest Expense - Net
   Third Party                                             (7,750)       (6,908)
                                                         --------      --------

Loss Before Income Taxes and
   Minority Interest                                       (2,383)       (5,433)

Benefit (Provision) for Income Taxes                       (1,788)        2,453
Minority Interest                                              16             6
                                                         --------      --------

Net Loss                                                   (4,155)       (2,974)

Foreign Currency Translation Adjustments                      243          (970)
                                                         --------      --------

Comprehensive Income (Loss)                              $ (3,912)     $ (3,944)
                                                         ========      ========
</TABLE>

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


<PAGE>


<TABLE>

                                            MORRIS MATERIAL HANDLING, INC.
                                          CONDENSED STATEMENTS OF CASH FLOWS
                                                     (UNAUDITED)
                                                (Dollars in Thousands)
<CAPTION>

                                                                                                              For the Three Months
                                                                                                                Ended January 31,
                                                                                                         ---------------------------
                                                                                                             2000             1999
                                                                                                         ---------        ----------
Operating Activities
<S>                                                                                                      <C>               <C>
    Net income (loss)                                                                                    $ (4,155)         $ (2,974)
    Add (deduct) - items not affecting cash provided by
     operating activities:
       Depreciation and amortization                                                                        2,445             1,806
       Amortization of debt financing costs                                                                   585               493
       Gain on sale of business                                                                            (6,380)             --
       Deferred income taxes - net                                                                           --              (2,957)
       Other                                                                                                   (6)               (6)
    Changes in working  capital,  excluding the effects of  acquisition  opening
     balance sheets:
       Accounts receivable                                                                                    805            11,912
       Inventories                                                                                         (1,229)              810
       Other current assets                                                                                  (574)           (3,747)
       Trade accounts payable and bank overdrafts                                                          (6,587)           (8,317)
       Advance payments and progress billings                                                               2,319            (1,349)
       Accrued interest                                                                                     5,524             4,836
       Other current liabilities                                                                            3,263            (2,909)
                                                                                                         --------          --------
Net cash provided by (used for) operating activities                                                       (3,990)           (2,402)
                                                                                                         --------          --------

Investment and Other Transactions
    Fixed asset additions - net                                                                              (334)           (1,634)
    Capitalized software                                                                                     (624)             (276)
    Acquisition of businesses - net of cash acquired                                                         --              (4,989)
    Net proceeds on divestiture of business                                                                 9,115              --
    Other - net                                                                                                79               126
                                                                                                         --------          --------
Net cash used for investment and other transactions                                                         8,236            (6,773)
                                                                                                         --------          --------

Financing Activities
    Changes in short-term debt and notes payable                                                            1,920            10,354
    Repayments of Revolving Credit Facility borrowings                                                     (6,200)           (1,200)
    Repayment of Term Loans                                                                                (3,100)             --
    Proceeds from/(repayments of) Acquisition Facility Line borrowings                                       (336)            1,235
    Repayments of long-term debt                                                                              (87)             (337)
    Payment of  fees for amendment of Credit Facility                                                        (133)             --
                                                                                                         --------          --------
Net cash provided by (used for) financing activities                                                       (7,936)           10,052
                                                                                                         --------          --------
Effect of Exchange Rate Changes on
 Cash and Cash Equivalents                                                                                     (2)              (51)
                                                                                                         --------          --------
Increase (decrease) in Cash and Cash Equivalents                                                           (3,692)              826
Cash and Cash Equivalents
    Beginning of Period                                                                                     3,929             2,534
                                                                                                         --------          --------
    End of Period                                                                                        $    237          $  3,360
                                                                                                         ========          ========
</TABLE>

The accompanying notes are an integral parto fo the financial statements.


<PAGE>


<TABLE>

                                           MORRIS MATERIAL HANDLING, INC.
                                          STATEMENTS OF SHAREHOLDER'S EQUITY
                                     FOR THE THREE MONTHS ENDED JANUARY 31, 1999
                                                     (UNAUDITED)
                                                (Dollars in Thousands)

<CAPTION>

                                                                            Parent         Accumulated
                                                   Common Stock            Investment/         Other                      Total
                                                Shares         Par         Additional      Comprehensive    Retained   Shareholder's
                                             Outstanding       Value     Paid-in-Capital       Loss         Earnings       Equity
                                             --------------------------  ---------------    ----------     ----------     ----------
<S>                <C> <C>                           <C>      <C>            <C>            <C>            <C>            <C>
Balance at October 31, 1999                          100      $    --        $ (33,392)     $  (3,428)     $ (94,003)     $(130,823)

Net loss                                              --           --               --             --         (4,155)        (4,155)

Change in foreign currency translation                --           --               --            243             --             243
                                               ---------      ---------      ---------      ---------      ---------      ----------
Balance at January 31, 2000                          100      $    --        $ (33,392)     $  (3,185)     $ (98,158)     $(134,735)
                                               =========      =========      =========      =========      =========      =========
</TABLE>

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

<PAGE>


MMH HOLDINGS, INC.
                         MORRIS MATERIAL HANDLING, INC.
                          NOTES TO FINANCIAL STATEMENTS
                                    UNAUDITED

(Dollar amounts in thousands unless indicated)

Note 1 - Basis of Presentation

On January 28, 1998, Harnischfeger Industries, Inc. ("HII") reached an agreement
with MHE  Investments,  Inc.  ("MHE  Investments")  an  affiliate  of  Chartwell
Investments  Inc.  ("Chartwell")  for the sale of an  approximately  80  percent
common ownership  interest in HII's Material  Handling  Equipment  Business (the
"MHE Business").  As more fully described in Note 2, the resulting  transactions
(the "Recapitalization"),  which closed on March 30, 1998 (the "Recapitalization
Closing"),  led  to  a  significant  change  in  the  capital  structure  and  a
reorganization of the underlying legal entities of the MHE Business. As a result
of the Recapitalization, MMH Holdings, Inc. ("Holdings"), a pre-existing company
engaged  in the  MHE  Business,  became  an  indirect  holding  company  for the
operating  entities engaged in the MHE Business.  Specifically,  Morris Material
Handling,   Inc.  ("MMH"  and  collectively  with  its  subsidiaries  and  their
predecessors,  the "Company"),  a newly formed wholly-owned direct subsidiary of
Holdings, directly or indirectly acquired the various operating entities engaged
in the  MHE  Business.  Holdings  was  recapitalized  in  order  to  effect  the
redemption of certain  shares of common stock of Holdings held by  Harnischfeger
Corporation ("HarnCo").  As a result of the reorganization of the legal entities
of the MHE Business,  Holdings and MMH became the successor companies to the MHE
Business.  The transactions  have been accounted for as a  recapitalization  and
accordingly,  the financial statements presented herewith reflect the underlying
historical accounting basis of the MHE Business.

For periods prior to the  Recapitalization  Closing,  the  financial  statements
presented represent the combined financial statements of the entities comprising
the  MHE  Business.  For  purposes  hereof,  it is  assumed  that  Holdings  has
historically  owned the capital  stock of MMH, that all of the assets of the MHE
Business were owned by  subsidiaries of MMH and that,  immediately  prior to the
consummation  of  the   Recapitalization,   the  historical  combined  financial
statements of Holdings were identical to those of the Company.

All significant  intercompany  balances and  transactions  have been eliminated.
Payables and receivables with HII and affiliates  prior to the  Recapitalization
are recorded as a component of parent investment.

The accompanying  unaudited  financial  statements should be read in conjunction
with the combined  1999 Annual  Report on Form 10-K of Holdings and the Company.
In the opinion of management,  all adjustments,  normal and recurring in nature,
necessary  for a fair  presentation  of  results  of  operations  and  financial
position have been included in the accompanying balance sheets and statements of
operations.  The results of  operations  for the three months ended  January 31,
2000 are not,  however,  indicative  of the results  which may be  expected  for
fiscal 2000.

Note 2 - Recapitalization Transaction

The   Recapitalization   was  effectuated  pursuant  to  the  January  28,  1998
Recapitalization  Agreement among MHE  Investments,  HarnCo and certain of HII's
affiliates. Pursuant to this agreement, HarnCo and other HII affiliates effected
a number  of  transactions  which  resulted  in  Holdings  owning,  directly  or
indirectly, the equity interests of all of the operating entities engaged in the
MHE  Business.  Holdings,  in turn,  formed MMH as a wholly owned  subsidiary to
directly or indirectly hold the various  operating  entities  engaged in the MHE
Business.

The principal  transactions  effected as part of the  Recapitalization  were the
following:  (i) MHE  Investments  acquired (x) 7,907 shares of Holdings'  common
stock  for  $25.1  million  and (y)  $28.9  million  liquidation  preference  of
Holdings'  12 1/2%  Series C Junior  Voting  Exchangeable  Preferred  Stock (the
"Series C Junior Voting Preferred  Stock") from HarnCo,  (ii) Holdings  redeemed
certain  shares of its common stock and Series C Junior Voting  Preferred  Stock

<PAGE>

held by HarnCo for $287 million in cash (including a $5 million  prepayment of a
potential  post-closing  redemption  price  adjustment) and  approximately  $4.8
million liquidation preference of Holdings' 12 1/4% Series B Junior Exchangeable
Preferred  Stock  (the  "Series B Junior  Preferred  Stock");  and (iii)  HarnCo
retained 2,261 shares of Holdings' common stock.

To finance the  Recapitalization,  Holdings  sold $60 million of Series A Units,
consisting  of $57.7  million  liquidation  preference of Holdings' 12% Series A
Senior Exchangeable  Preferred Stock (the "Series A Senior Preferred Stock") and
$2.3 million of Holdings'  non-voting common stock, to institutional  investors.
In addition, MMH issued $200 million of aggregate principal amount of its 9 1/2%
senior notes due 2008 (the "Note  Offering")  and entered into a senior  secured
credit  facility  (the  "New  Credit  Facility")  (See Note 6).  The New  Credit
Facility  consisted of a $70 million  Revolving  Credit Facility (the "Revolving
Credit  Facility"),   a  $30  million  acquisition  facility  (the  "Acquisition
Facility")  and a $35 million term loan.  MMH used a portion of the $200 million
aggregate  proceeds from the Note Offering and $55 million aggregate  borrowings
under the New  Credit  Facility  to redeem  certain of its  common  shares  from
Holdings and pay Holdings a dividend  which on a combined  basis totaled  $233.8
million.  Holdings,  in turn, used the proceeds from this  redemption,  together
with the proceeds of the sale of the Series A Units, to finance the cash portion
of the redemption price for HarnCo's shares.  The remainder of the proceeds were
used by  Holdings  and MMH (i) to make  loans to senior  management  to  acquire
indirect equity interests in Holdings, (ii) to fund certain transaction fees and
expenses and (iii) for general corporate purposes.

At January 31, 2000,  MHE  Investments  owns  approximately  54.5% of the common
stock of  Holdings  and $34.6  million  liquidation  preference  of the Series C
Junior Voting Preferred Stock and HarnCo owns approximately  15.6% of the common
stock of Holdings and $5.8 million liquidation preference of the Series B Junior
Preferred Stock. Certain indirect equity holders in MHE Investments own, through
Martin Crane L.L.C.,  approximately  25.0% of the common stock of Holdings.  The
remaining equity  interests are held by  institutional  investors and consist of
non-voting stock representing approximately 4.9% of the outstanding common stock
of Holdings  and $68.7  million  liquidation  preference  of the Series A Senior
Preferred Stock.

Note 3 - Liquidity and Capital Resources

The Company did not meet certain financial covenants contained in the New Credit
Facility for the quarter ended January 31, 2000 and and anticipates that it will
not meet them in the foreseeable  future.  The Company entered into an Amendment
and Waiver under the New Credit Facility, dated as of January 31, 2000, whereby,
among other  matters,  the lenders  waived  compliance  by the Company with such
financial covenants,  for the period from January 31, 2000 until 5:00 p.m. March
29, 2000 (the "January Waiver"). The January Waiver permits the Company, subject
to certain conditions,  to make additional borrowings under the Revolving Credit
Facility and issue  additional  letters of credit,  above levels in existence on
January 28, 2000,  in an  aggregate  amount of up to $12.0  million,  during the
waiver period.

Currently,  the Company is not generating  sufficient  funds from  operations to
satisfy working capital and debt service requirements, and as a result must rely
on  Revolving  Credit  Facility  borrowings  to continue  to operate.  While the
Company  anticipates  that cash generated from  operations and Revolving  Credit
Facility  borrowings  will be  sufficient  to enable it to satisfy its cash flow
needs  until  March  29,  2000,  there  can be no  assurance  that it will  have
sufficient  cash  flow  and  borrowings  available  to  enable  it to  meet  its
obligations until such date.

Until March 29, 2000 and thereafter, the Company may experience severe financial
and  operational  difficulties  resulting from its liquidity  situation that may
prevent it from continuing operations.

In addition,  at the time of expiration of the January Waiver,  the Company will
again  be in  default  under  certain  financial  covenants  of the  New  Credit
Facility.  As a result of these defaults,  the lenders ("Lenders") under the New
Credit  Facility  will be able to declare all amounts of  principal  and accrued
interest  outstanding under the New Credit Facility  immediately due and payable
(an "Acceleration"). If the Lenders so accelerate, the Company will then also be
in default under the indenture governing the Senior Notes (the "Indenture").  In
such event,  the Company  would not be able to cure such default and the trustee
under  the  Indenture  will be  able to  accelerate  the  Company's  outstanding
indebtedness  (including  accrued  interest)  evidenced by the Senior Notes. The
Company will not have  sufficient  funds to repay the  outstanding  indebtedness
under the New Credit Facility or the Senior Notes if either such indebtedness is
accelerated. As of the end of first quarter 2000, the Company had $298.0 million
of  indebtedness  outstanding,  including  $85.8  million  under the New  Credit
Facility (including accrued interest) and $206.3 million evidenced by the Senior
Notes (including accrued interest).

In the event that the Lenders do not cause an Acceleration to occur on March 29,
2000, the Company will  nonetheless be unable to meet certain of its obligations
as they become due after such date,  including a $9.5 million  interest  payment

<PAGE>

obligation under the Senior Notes due on April 1, 2000. As a result, the Lenders
and,  after  expiration of the  applicable  grace period,  the trustee under the
Indenture  will  have  the  right  to  accelerate   the  Company's   outstanding
indebtedness. In such event, the Company will not have sufficient funds to repay
New Credit Facility borrowings and the Senior Notes.

The Company is currently seeking, and is engaged in discussions  regarding,  its
strategic alternatives.  The Company has engaged in discussions with the Lenders
and  representatives  of the holders of Senior  Notes  concerning  the  possible
restructuring of the Company's capital  structure,  including a possible sale of
the Company to a third party in connection therewith.  There can be no assurance
that the Company will be able to successfully  pursue strategic  alternatives or
that the results of its  discussions  with its creditors will be successful.  As
discussed above, if the Company fails in the near future to resolve its critical
liquidity issues, the Company may be unable to continue as a going concern.

Note 4 - Acquisitions

During the three  months ended  January 31,  2000,  the Company did not make any
acquisitions.  During the three  months  ended  January  31,  1999,  the Company
completed one acquisition with an aggregate purchase price of $3.1 million,  net
of cash acquired,  including  approximately $1.0 million financed by the seller.
This  acquisition  was related to the  Company's  aftermarket  business  and was
accounted for as a purchase transaction with the purchase price allocated to the
fair value of  specific  assets  acquired  and  liabilities  assumed.  Resultant
goodwill of $1.8 million is being amortized over 40 years.  This acquisition was
partially  financed by the seller,  resulting in a deferred purchase price which
will be paid in 2004 and 2005.  During the three months ended  January 31, 1999,
the Company made final  consideration  payments of $1.5  million  related to two
1998 acquisitions.  In addition, with respect to a 1995 acquisition, the Company
was required to make a contingent  consideration  payment of $1.3 million in the
three months ended January 31, 1999. Additionally, a payment of $100 was made in
each of the three month  periods ended January 31, 2000 and 1999 toward a fiscal
1998 purchase which was partially  financed by the seller. On a pro forma basis,
the fiscal 1999  acquisition was not material to results of operations  reported
for the three months ended January 31, 1999 and accordingly, such information is
not presented.

Note 5 - Inventories

Inventories consisted of the following:
<TABLE>
<CAPTION>

                                                January 31,       October 31,
                                                    2000              1999
                                              ----------------- -----------------
<S>                                                   <C>              <C>
Raw material                                          $  5,864         $  8,771
Work-in-process                                         24,054           20,166
Finished parts                                          17,048           18,116
                                                      --------         --------
                                                        46,966           47,053
Less excess of current cost over
stated LIFO value                                       (7,059)          (7,059)
                                                      --------         --------
                                                      $ 39,907         $ 39,994
                                                      ========         ========
</TABLE>


Note 6 - Indebtedness

The New Credit  Facility and the Indenture  contain a number of covenants  that,
among other  things,  limit  Holdings' and its  subsidiaries'  ability to prepay
subordinated indebtedness, dispose of certain assets, create liens, make capital
expenditures,  make certain  investments or acquisitions and otherwise  restrict
corporate activities.  In addition, the New Credit Facility limits Holdings' and
its  subsidiaries  ability to incur  indebtedness  and the Indenture  limits the
Company's and its subsidiaries'  ability to incur  indebtedness.  The New Credit
Facility  also  requires  Holdings and its  subsidiaries  to comply with certain
financial ratios and borrowing  condition tests based on quarterly  measurements
of the latest twelve months results of operations,  under which Holdings and its
subsidiaries  are  required  to  achieve  and  maintain  certain  financial  and
operating  results. A breach of any of these covenants would result in a default
under the  Indenture or the New Credit  Facility,  or both.  In the event of any
such default,  the lenders under the New Credit  Facility  and/or the holders of
the Senior  Notes  could elect to declare  all  amounts  borrowed  under the New
Credit Facility  and/or the Senior Notes,  as applicable,  together with accrued
interest  thereon,  to be due and payable which would also result in an event of
default  under the surety  arrangement  which the  Company  entered  into at the
Recapitalization Closing.

The Company did not meet certain of the financial covenants under the New Credit
Facility for the period ended  January 31, 1999 and did not meet such  financial

<PAGE>


covenants and certain additional  financial covenants for the period ended April
30, 1999. On August 2, 1999, the Company obtained an amendment to the New Credit
Facility (the "Amendment")  which cured past financial  covenant  violations and
reset the financial covenants until April 2001. The Amendment increased the cash
availability  under the Revolving  Credit  Facility from $35.7 million under the
previous  waiver  agreement  to $40.7  million.  In  connection  with,  and as a
condition to, the Amendment,  certain of the current  indirect equity holders in
Holdings  purchased a $5.0 million  participation in the New Credit Facility and
received certain  non-voting equity interests in Holdings,  consisting of 25% of
the then outstanding common stock of Holdings.

As discussed  in Note 3, the Company was in  violation of its amended  financial
covenants  under the New Credit Facility as of January 31, 2000, and anticipates
being in violation of those covenants at subsequent quarterly  measurement dates
during  fiscal 2000.  Accordingly,  amounts  outstanding  at January 31, 2000 of
$78.5  million  under the New Credit  Facility  and $200 million of Senior Notes
have been classified as current liabilities in the accompanying balance sheets.

Note 7 - Commitments and Contingencies

To secure the performance of sales contracts related to MMH operations,  MMH was
contingently  liable to financial  institutions  and others for the following at
January 31, 2000: (i) $4.4 million of  outstanding  letters of credit and surety
bonds  under  the  New  Credit  Facility,  (ii)  $2.7  million  under  a  surety
arrangement for outstanding  surety bonds and (iii) $3.9 million of surety bonds
with other  institutions.  Prior to the  Recapitalization  Closing,  HII and its
affiliates ("HII Group")  provided credit support for the MHE Business.  As part
of the  Recapitalization,  HII  agreed  to  maintain  in  place  credit  support
(including   letters  of  credit  and  surety   bonds)  in   existence   at  the
Recapitalization  Closing  and  the  Company  agreed  to  reimburse  HII for any
payments made by the HII Group with respect to such credit  support.  At January
31, 2000,  approximately $26.7 million of HII Group letters of credit and surety
bonds remained outstanding.

As of the Recapitalization Closing, HarnCo retained certain income and other tax
liabilities relating to the MHE Business, all environmental liabilities relating
to  previously  shared  facilities,  any  liabilities  for  which  HarnCo or its
affiliates  have been named as potentially  responsible  parties with respect to
Superfund sites, and any liabilities  arising in connection with claims alleging
exposure to asbestos  (to the extent there is  insurance  coverage  therefor) in
connection  with  the  MHE  Business  prior  to  the  Recapitalization  Closing.
Additionally,  HarnCo retained all liability for medical and disability  benefit
claims for current United States  employees  made prior to the  Recapitalization
Closing and all claims with  respect to any of the HII benefit  plans for former
United States employees.

HarnCo has been and is  currently  a defendant  to a number of asbestos  related
lawsuits  and will likely be named in future such  actions.  Most suits  involve
multiple  defendants  including  asbestos  manufacturers.   MMH  has  agreed  to
indemnify HarnCo and its affiliates with respect to any liabilities in excess of
insurance  arising  in  connection  with  past and  future  asbestos  litigation
relating to the MHE Business.  HII's  insurance  program  included  coverage for
asbestos related claim activity through 1986, when coverage for asbestos related
claims ceased to be available.  HII's insurer has provided first dollar coverage
for policy periods through 1976. During the 1977 to 1985 policy periods, HII had
a variety of policies,  with  retention  levels  ranging from  $100,000 to $15.0
million and total  coverage  limits ranging from $12.5 million to $50.0 million.
To date,  HII's  insurer has paid all  indemnification  liabilities  relating to
asbestos  claims (which  amounts have not been material to the MHE Business) but
there can be no assurance  such insurers will continue to do so in the future or
that there will be  insurance  coverage for such  claims.  In  addition,  policy
primary  aggregate  levels were exhausted in certain years,  which would require
the  participation  of excess  insurers  for future  claim  activity.  Given its
experience to date with such claims,  the Company  believes that its exposure to
asbestos related claims is not material, but there can be no assurance that such
liability will not in fact be material.

All of the Company's  agreements  and  arrangements  with HII and its affiliates
(including  those  referred  to above and those  relating  to the  provision  of
services  and  materials  by HII and its  affiliates  to the  Company)  could be
materially  adversely  affected by the fact that on June 7, 1999 (the  "Petition
Date"), HII and certain of its United States affiliates (including HarnCo) filed
voluntary  petitions for relief under Chapter 11 of the United States Bankruptcy
Code (the  "Bankruptcy  Code") in the  United  States  Bankruptcy  Court for the
District  of  Delaware  (the  "HII  Bankruptcy").   Certain  provisions  of  the
Bankruptcy Code allow a debtor to avoid, delay and/or reduce its contractual and
other  obligations to third parties.  There can be no assurance that HII and its
affiliates  will not attempt to utilize  such  provisions  to cease  performance
under their agreements with the Company. The inability of the Company to receive
the benefits of one or more of these  agreements or the  termination  of ongoing
arrangements  between  the  Company  and  affiliates  of  HII  could  materially
adversely  affect the Company's  operations  and financial  performance.  In the
event that any of the  liabilities  retained  by HII and its  affiliates  remain
unsatisfied as of the Petition Date, the Company's right to indemnification  for
any such  amounts  it has paid on behalf of HII and its  affiliates  may also be
avoided, delayed or reduced.

<PAGE>


Each of HII and certain of its  affiliates on the one hand,  and the Company and
certain of its affiliates,  on the other hand, have  receivables and payables to
the other which may be affected by the HII Bankruptcy.

On October 28, 1996, a strong windstorm caused significant damage to the Belview
container-handling   terminal  at  the  Port  of  Waterford   in  Ireland.   One
container-handling  crane sold by the Company's  United  Kingdom  subsidiary was
destroyed  and another was  seriously  damaged.  The two cranes were sold to the
Waterford  Harbour  Commissioners  in 1992 and  commissioned for use in 1993. On
October 19, 1998, the Waterford Harbour  Commissioners  wrote to the Company and
provided a notice of arbitration,  asserting breach of contract,  negligence and
breach of duty against the  Company's  United  Kingdom  subsidiary in connection
with the  destroyed and damaged  cranes.  The  Waterford  Harbour  Commissioners
claimed direct damages of IR(pound)8.5  million ($11.5 million based on exchange
rates at January  31,  2000) and  unspecified  consequential  damages.  The port
operator,  Bell Lines,  Limited,  filed a similar  claim  against the  Company's
United  Kingdom  subsidiary  in October  1999,  asserting  unspecified  damages.
Management  intends to  vigorously  defend both  matters.  One of the  Company's
insurance  carriers  has agreed to provide  defense  coverage for one of the two
cranes  involved in the accident and limited  indemnification  if the Company is
unsuccessful in defending the claims. The Company is continuing to work with its
insurance broker to determine the availability of additional insurance coverage,
if any.  While the Company  believes that it will obtain a favorable  resolution
(either by successfully  defending the claim or by obtaining  insurance coverage
thereon),  no assurances  can be made as to the final outcome of the claims.  If
the  Company is found  liable  for the claims and is unable to obtain  insurance
coverage  therefor,  there could be a material  adverse  effect on the Company's
operations  and  financial  performance.  Based upon the current  status of this
matter, no related liability has been accrued at January 31, 2000.

The Company is a party to various other litigation  matters,  including  product
liability  and other claims,  which are normal in the course of its  operations.
Also,  as a  normal  part of its  operations,  the  Company  undertakes  certain
contractual  obligations  and warranties in connection with the sale of products
or services.  Although  the outcome of these  matters  cannot be predicted  with
certainty, management believes that the resolution of such matters will not have
a material adverse effect on the consolidated  results of operations,  financial
position or cash flows of the Company.

Under the terms of the Recapitalization Agreement, HarnCo retained all liability
for the only two open  environmental  clean-up  claims brought against HarnCo in
the Milwaukee,  Wisconsin  area. The Company and its management are not aware of
any  other  material  environmental  clean-up  claim  which  is  pending  or  is
threatened  against the  Company,  but there can be no  assurance  that any such
claim will not be asserted  against the Company in the future.  In addition,  as
noted above,  the Company's  right to  indemnification  against  HarnCo for such
liabilities  may be avoided,  delayed or reduced as a result of HarnCo's  filing
for bankruptcy protection.

Note 8 - Segment Information

The Company adopted SFAS No. 131, " Disclosures  about Segments of an Enterprise
and Related  Information"  during the fiscal year ended  October 31,  1999.  The
prior year's first quarter  segment  information has been restated to conform to
the  current  year  presentation.  Pursuant  to SFAS No.  131,  the  Company has
identified  its reportable  segments  based on the Company's  method of internal
reporting  which is utilized by its chief  operating  decision-maker,  the Chief
Executive Officer. The reportable operating segments are as follows:

         o Equipment and  Aftermarket  - Americas
         o Equipment and  Aftermarket - Other
         o Distribution and Service - North America
         o Engineered  Products and  Automation  -  Europe
         o Equipment  and  Aftermarket  -  Europe
         o Equipment and  Aftermarket - Asia Pacific
         o Equipment and Aftermarket - South Africa

Each segment has a manager who is directly  accountable to and maintains regular
contact with the Chief Executive Officer.  The Company evaluates  performance of
its segments based on operating  income,  determined on a basis  consistent with
amounts reported in the consolidated financial statements.

The Equipment and  Aftermarket - Americas  segment  designs and  manufactures  a
comprehensive line of engineered and standard overhead cranes,  hoists and other
component  products and repair parts at the Company's  facilities located in Oak
Creek and Windsor, Wisconsin. This segment also modernizes products manufactured

<PAGE>


by both the Company and its competitors.  This segment is the main  manufacturer
of the replacement parts sold by the Company's  Distribution and Service - North
America segment as well as the  manufacturer of component  products used in that
segment's standard cranes.  Repair parts and component products are purchased by
the Distribution and Service - North America segment at list price less standard
intercompany discounts.

The  Equipment  and   Aftermarket  -  Other  segment  is  the  Company's   brake
manufacturing operation in Canada. Approximately 35% of this segment's sales are
to other Company segments. The Company sold this operation in December 1999.

The  Distribution  and  Service  -  North  America  segment  is the  network  of
Company-owned  locations in key industrial markets in North America. The network
is the platform for the  Company's  sales  activities,  serving as  distribution
centers for its original  equipment and  replacement  parts as well as the focal
point for service  activities.  Some of the distribution  centers also fabricate
and assemble standard cranes using components  manufactured by the Equipment and
Aftermarket - Americas and the Equipment and Aftermarket - Europe segments.

The  Engineered  Products  and  Automation  -  Europe  segment  focuses  on  the
manufacture  of highly  engineered  ship-to-shore  and gantry  cranes for use in
container  handling and  automated  warehouse  units at the  Company's  facility
located  in  Loughborough,  England,  and  provides  software  support  for  the
automated warehouse units installed at customer locations.

The Equipment and  Aftermarket - Europe  segment  consists of standard crane and
hoist manufacturing in the Loughborough, England facility as well as the network
of Company-owned  distribution  centers in key industrial  markets in the United
Kingdom.  The Equipment and Aftermarket - Europe segment  provides  services for
the Engineered  Products and Automation  segment at prices consistent with those
charged to external  customers.  In addition,  this segment  distributes  hoists
through Distribution and Service - North America and Equipment and Aftermarket -
Asia  Pacific  and South  Africa at prices  consistent  with  those  charged  to
external customers.

The Equipment and Aftermarket - Asia Pacific and South Africa  segments  operate
in a manner similar to the Distribution and Service - North America segment. The
Asia Pacific segment includes operations in Australia,  Singapore,  Thailand and
Saudi Arabia.

Within North America,  certain centrally  incurred costs such as insurance costs
and computer  charges are  allocated to  operating  segments  based upon various
methods of  allocation.  In the United  Kingdom,  utilities,  property taxes and
insurance  costs are  allocated  to the segments  based upon varying  allocation
methods. Domestically, costs related to centralized accounting, marketing, human
resources, and IT functions are not allocated. Internationally,  these costs are
allocated amongst individual  segments in First Quarter 2000,  however, in First
quarter 1999, no allocation was done.

<PAGE>
<TABLE>

                                                            MMH HOLDINGS, INC.
                                                       MORRIS MATERIAL HANDLING, INC.
                                                             Operating Segments
                                                 For the Three Months Ended January 31, 2000
<CAPTION>

                                            --------------------------------------------------------------------------
                                                                   SALES
                                            --------------------------------------------------------------------------

                                             External           Intercompany              Total    Operating Income (Loss)
                                            -----------        --------------         -----------    ------------------

<S>                                            <C>                   <C>                 <C>                    <C>
       Equipment & Aftermarket - Americas      $11,196               $10,508             $21,704                $1,000
          Equipment & Aftermarket - Other          423                   111                 534                   (4)
                                            -----------        --------------         -----------    ------------------
            Total Equipment & Aftermarket       11,619                10,619              22,238                   996
   Distribution & Service - North America       40,424                   157              40,581                 1,883
                     Eliminations & Other            0              (10,776)            (10,776)                 (117)
                                            -----------        --------------         -----------    ------------------
                           Total Americas       52,043                     0              52,043                 2,762
                                            -----------        --------------         -----------    ------------------

Engineered Products & Automation - Europe        2,070                    17               2,087                   177
         Equipment & Aftermarket - Europe        6,937                 1,288               8,225                 (787)
                     Eliminations & Other            0                 (206)               (206)                 (197)
                                            -----------        --------------         -----------    ------------------
                             Total Europe        9,007                 1,099              10,106                 (807)
   Equipment & Aftermarket - South Africa        2,243                     0               2,243                  (91)
   Equipment & Aftermarket - Asia Pacific        3,426                     0               3,426                 (336)
                     Eliminations & Other            0                 (191)               (191)                 (471)
                                            -----------        --------------         -----------    ------------------
                      Total International       14,676                   908              15,584               (1,705)
                                            -----------        --------------         -----------    ------------------
               Corporate and Eliminations            0                 (908)               (908)               (2,070)
                                            ===========        ==============         ===========    ==================

                             Consolidated      $66,719          $       -                 $66,719              $(1,013)
                                            ===========        ==============         ===========    ==================
</TABLE>

<PAGE>

<TABLE>

                                                            MORRIS MATERIAL HANDLING, INC.
                                                                   Operating Segments
                                                       For the Three Months Ended January 31, 1999

<CAPTION>

                                            --------------------------------------------------------------------------
                                                                      SALES
                                            --------------------------------------------------------------------------
                                              External            Intercompany              Total      Operating Income (Loss)
                                            ------------        ----------------         -------------    -------------

<S>                                             <C>                     <C>                   <C>                 <C>
       Equipment & Aftermarket - Americas       $12,642                 $10,570               $23,212             $980
          Equipment & Aftermarket - Other           958                     245                 1,203              393
                                            ------------        ----------------         -------------    -------------
            Total Equipment & Aftermarket        13,600                  10,815                24,415            1,373
   Distribution & Service - North America        35,626                   1,176                36,802            2,286
                     Eliminations & Other             0                (11,991)              (11,991)               98
                                            ------------        ----------------         -------------    -------------
                           Total Americas        49,226                       0                49,226            3,757
                                            ------------        ----------------         -------------    -------------

Engineered Products & Automation - Europe         3,965                     122                 4,087              (4)
         Equipment & Aftermarket - Europe         8,261                   1,137                 9,398              400
                     Eliminations & Other             0                   (207)                 (207)            (640)
                                            ------------        ----------------         -------------    -------------
                             Total Europe        12,226                   1,052                13,278            (244)
   Equipment & Aftermarket - South Africa         3,408                       0                 3,408              103
   Equipment & Aftermarket - Asia Pacific         3,060                       0                 3,060                9
                     Eliminations & Other             0                   (285)                 (285)            (115)
                                            ------------        ----------------         -------------    -------------
                      Total International        18,694                     767                19,461            (247)
                                            ------------        ----------------         -------------    -------------
               Corporate and Eliminations             0                   (767)                 (767)          (2,042)
                                            ============        ================         =============    =============

                             Consolidated       $67,920           $        --                 $67,920           $1,468
                                            ============        ================         =============    =============
</TABLE>

Note 9 - Divestiture

On December 16, 1999,  the Company  completed  the sale of the  Company's  brake
manufacturing operation (the "Brake Business") located in Mississauga,  Ontario,
Canada,  for a net  sale  price  of $6.8  million  after  deduction  of  certain
transaction-related  items,  including taxes. During the first quarter of fiscal
year 2000, the Brake Business contributed $0.5 million in sales and no operating
income to the Company's results.

In accordance  with the New Credit  Facility,  as amended by the Amendment,  the
Company was permitted to apply half of the net proceeds of the sale of the Brake
Business (which amounted to $3.4 million) to general corporate  purposes,  which
the Company would  otherwise  have been  required to use to prepay  indebtedness
under the New Credit  Facility.  After  consummation  of the sale,  the  Company
repaid $3.1  million of the  outstanding  term loans ($2.4  million of which was
applied to the final scheduled  principal payment obligation with respect to the
term loans) and repaid $0.3 million on the Acquisition  Facility. A pre-tax gain
of $6.4 million was recognized on this transaction.

Note 10 - Supplemental Condensed Financial Information

In connection with the Recapitalization,  MMH, a direct wholly-owned  subsidiary
of  Holdings,  issued  Senior  Notes  that are  guaranteed  by  certain of MMH's
subsidiaries (the "Guarantor Subsidiaries").  Each of the Guarantor Subsidiaries
is a wholly-owned subsidiary,  directly or indirectly, of MMH and the guarantees
are full, unconditional and joint and several. Both Holdings and MMH are holding
companies  with no material  operating  assets.  All of the  Company's  business
operations  are conducted  through  subsidiaries  of MMH and  accordingly,  both
Holdings and MMH are  dependent  on the  operating  subsidiaries  of MMH to fund
their cash needs, including debt service and tax obligations.

Separate  financial  statements of the Guarantor  Subsidiaries are not presented
because  management has determined that they would not be material to investors.
The following  supplemental  financial information sets forth the balance sheet,
statement of operations and cash flow information for the Guarantor Subsidiaries
and  for  MMH's  other  subsidiaries  (the  "Non-Guarantor  Subsidiaries").  The
supplemental  financial  information  reflects the  investments of the Guarantor
Subsidiaries  in the  Non-Guarantor  Subsidiaries  using  the  equity  method of
accounting. For purposes of this presentation, it is assumed that, historically,
all of the assets of the MHE Business were  wholly-owned by subsidiaries of MMH,
which  is an  entity  that  was  formed  by  Holdings  in  connection  with  the
Recapitalization and accordingly, the historical financial statements of MMH and
Holdings are identical following completion of the Recapitalization.

<PAGE>

<TABLE>

                                 SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEET
                                                   JANUARY 31, 2000
                                                (Dollars in Thousands)
<CAPTION>

                                                                                      Consolidated
                                                               Morris                 Morris                            Consolidated
                                                   Non         Material               Material   MMH                         MMH
                                      Guarantor    Guarantor   Handling               Handling   Holdings                  Holdings
                                      Subsidiares  Subsidiares Inc.     Eliminations  Inc.       Inc.      Eliminations      Inc.
                                      ---------------------------------------------------------------------------------------------
Current Assets
<S>                                   <C>         <C>         <C>         <C>         <C>         <C>         <C>        <C>
 Cash and cash equivalents            $   (504)   $     741   $    --     $    --     $     237   $    --     $    --    $     237
 Accounts receivable - net               59,167       3,815        --          --        62,982        --          --       62,982
 Intercompany accounts receivable        23,763         (27)     17,034     (40,770)       --          --          --         --
 Inventories                             37,825       2,082        --          --        39,907        --          --       39,907
 Other current assets                     7,262         549         800        --         8,611        --          --        8,611
                                      ---------   ---------   ---------   ---------   ---------   ---------   ---------  ---------
                                        127,513       7,160      17,834     (40,770)    111,737        --          --      111,737
                                      ---------   ---------   ---------   ---------   ---------   ---------   ---------  ---------
Property, Plant and Equipment            37,161       2,600        --          --        39,761        --          --       39,761
                                      ---------   ---------   ---------   ---------   ---------   ---------   ---------  ---------

Other Assets
 Goodwill                                38,378       2,812        --          --        41,190        --          --       41,190
 Debt financing costs                      --          --        15,859        --        15,859        --          --       15,859
 Noncurrent intercompany receivable       5,394        --        83,281     (88,675)       --          --          --         --
 Investment in affiliates                (1,698)       --        61,408     (59,710)       --      (134,735)    130,735       --
 Deferred income taxes                     --          --          --          --          --          --          --         --
 Other                                    9,759        --           693        --        10,452        --          --       10,452
                                      ---------   ---------   ---------   ---------   ---------   ---------   ---------  ---------
                                         51,833       2,812     161,241    (148,385)     67,501    (134,735)    130,735     67,501
                                      ---------   ---------   ---------   ---------   ---------   ---------   ---------  ---------
                                      $ 216,507   $  12,572   $ 179,075   $(189,155)  $ 218,999   $(134,735)  $ 130,735  $ 218,999
                                      =========   =========   =========   =========   =========   =========   =========  =========

LIABILITIES AND SHAREHOLDERS'EQUITY
Current Liabilities
 Current portion of long-term
  obligations                        $     402   $      41   $    --     $    --     $     443   $    --     $    --    $     443
 New Credit Facility borrowings          2,345        --        21,300        --        23,645        --          --       23,645
 Term loans                               --          --        49,107        --        49,107        --          --       49,107
 Acquisition Facility                     --          --        12,094        --        12,094        --          --       12,094
 Senior Notes                             --          --       200,000        --       200,000        --          --      200,000
 Bank overdrafts                         1,142       1,617        --          --         2,759        --          --        2,759
 Trade accounts payable                 17,136       1,256        --          --        18,392        --          --       18,392
 Intercompany accounts payable          17,007       4,036      19,727     (40,770)       --          --          --         --
 Advance payments and progress
   billings                             10,717        --          --          --        10,717        --          --       10,717
 Accrued Warranteies                       163        --          --          --         1,637        --          --        1,637
 Accrued interest                           17        --         7,328        --         7,345        --          --        7,345
 Other current liabilities              18,393       1,049       3,976        --        23,418        --          --       23,418
                                     ---------   ---------   ---------   ---------   ---------   ---------   ---------  ---------
                                        68,796       7,999     313,532     (40,770)    349,557        --          --      349,557
                                     ---------   ---------   ---------   ---------   ---------   ---------   ---------  ---------

Other Term Debt                          2,079         576        --          --         2,655        --          --        2,655
Noncurrent Intercompany Payable         83,281       5,394        --       (88,675)       --          --          --         --
Deferred Income Taxes                     --          --          --          --          --          --          --         --
Other Long Term Liabilities                943        --           278        --         1,221        --          --        1,221
                                      ---------   ---------   ---------   ---------   ---------   ---------   ---------  ---------
                                       155,099      13,969     313,810    (129,445)    353,433        --          --      353,433
Minority Interest                         (197)       --          --           498         301        --          --          301
Mandatorily Redeemable referred Stock     --          --          --          --          --       111,710        --      111,710
Stockholders' Equity                    61,605      (1,397)   (134,735)    (60,208)   (134,735)   (246,445)    134,735   (246,445)
                                     ---------   ---------   ---------   ---------   ---------   ---------   ---------  ---------
                                     $ 216,507   $  12,572   $ 179,075   $(189,155)  $ 218,999   $(134,735)  $ 134,735  $ 218,999
                                     =========   =========   =========   =========   =========   =========   =========  =========
</TABLE>

<PAGE>


<TABLE>

                                 SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEET
                                                   OCTOBER 31, 1999
                                                (Dollars in Thousands)
<CAPTION>

                                                                                      Consolidated
                                                               Morris                 Morris                            Consolidated
                                                   Non         Material               Material   MMH                         MMH
                                      Guarantor    Guarantor   Handling               Handling   Holdings                  Holdings
                                      Subsidiares  Subsidiares Inc.     Eliminations  Inc.       Inc.      Eliminations      Inc.
                                      ---------------------------------------------------------------------------------------------
Current Assets
<S>                                   <C>         <C>         <C>         <C>         <C>         <C>         <C>        <C>
 Cash and cash equivalents            $   2,325   $     104   $   1,500   $    --     $   3,929   $    --     $    --    $   3,929
 Accounts receivable - net               60,163       4,318        --          --        64,481        --          --       64,481
 Intercompany accounts receivable        20,057        --        13,204     (33,261)       --          --          --         --
 Inventories                             37,892       2,102        --          --        39,994        --          --       39,994
 Other current assets                     6,509         533         800        --         7,842        --          --        7,842
                                      ---------   ---------   ---------   ---------   ---------   ---------   ---------  ---------
                                        126,946       7,057      15,504     (33,261)    116,246        --          --      116,246
                                      ---------   ---------   ---------   ---------   ---------   ---------   ---------  ---------
Property, Plant and Equipment            38,294       2,680        --          --        40,974        --          --       40,974
                                      ---------   ---------   ---------   ---------   ---------   ---------   ---------  ---------

Other Assets
 Goodwill                                40,010       2,834        --          --        42,844        --          --       42,844
 Debt financing costs                      --          --        16,398        --        16,398        --          --       16,398
 Noncurrent intercompany receivable       5,161        --        83,891     (89,052)       --          --          --         --
 Investment in affiliates                (1,527)       --        64,899     (63,372)       --      (130,823)    130,823       --
 Deferred income taxes                     --          --          --          --          --          --          --         --
 Other                                    9,758        --           616        --        10,374        --          --       10,374
                                      ---------   ---------   ---------   ---------   ---------   ---------   ---------  ---------
                                         53,402       2,834     165,804    (152,424)     69,616    (130,823)    130,823     69,616
                                      ---------   ---------   ---------   ---------   ---------   ---------   ---------  ---------
                                      $ 218,642   $  12,571   $ 181,308   $(185,685)  $ 226,836   $(130,823)  $ 130,823  $ 226,836
                                      =========   =========   =========   =========   =========   =========   =========  =========

LIABILITIES AND SHAREHOLDERS'EQUITY
Current Liabilities
 Current portion of long-term
  obligations                        $     342   $      41   $    --     $    --     $     383   $    --     $    --    $     383
 New Credit Facility borrowings            425        --        27,500        --        27,925        --          --       27,925
 Term loans                               --          --        52,225        --        52,225        --          --       52,225
 Acquisition Facility Line
  borrowings                              --          --        12,430        --        12,430        --          --       12,430
 Senior notes                             --          --       200,000        --       200,000        --          --      200,000
 Bank overdrafts                           139       1,228        --          --         1,367        --          --        1,367
 Trade accounts payable                 25,562       1,195        --          --        26,757        --          --       26,757
 Intercompany accounts payable          13,204       4,153      15,904     (33,261)       --          --          --         --
 Advance payments and progress
   billings                              8,336        --          --          --         8,336        --          --        8,336
 Accrued warranties                      1,748          73        --          --         1,821        --          --        1,821
 Accrued interest                           18        --         1,786        --         1,804        --          --        1,804
 Other current liabilities              16,854       1,148       2,014        --        20,016        --          --       20,016
                                     ---------   ---------   ---------   ---------   ---------   ---------   ---------  ---------
                                        66,628       7,838     311,859     (33,261)    353,064        --          --      353,064
                                     ---------   ---------   ---------   ---------   ---------   ---------   ---------  ---------

Other Long-Term Debt                     2,189         595        --          --         2,784        --          --        2,784
Noncurrent intercompany payable         83,891       5,161        --       (89,052)       --          --          --         --
Other Long-Term Liabilities              1,035        --           272        --         1,307        --          --        1,307

Minority Interest                         --          --          --           504         504        --          --          504
Mandatorily Redeemable
 Preferred Stock                          --          --          --          --          --       108,245        --      108,245
Stockholders' Equity                    64,899      (1,023)   (130,823)    (63,876)   (130,823)   (239,068)    130,823   (239,068)
                                     ---------   ---------   ---------   ---------   ---------   ---------   ---------  ---------
                                     $ 218,642   $  12,571   $ 181,308   $(185,685)  $ 226,836   $(130,823)  $ 130,823  $ 226,836
                                     =========   =========   =========   =========   =========   =========   =========  =========
</TABLE>

<PAGE>


<TABLE>


                               SUPPLEMENTAL CONDENSED COMBINING STATEMENT OF OPERATIONS
                                     FOR THE THREE MONTHS ENDED JANUARY 31, 2000
                                                     (UNAUDITED)
                                                (Dollars in Thousands)

<CAPTION>

                                                                                   Consolidated
                                                             Morris                Morris                            Consolidated
                                                 Non         Material              Material   MMH                    MMH
                                    Guarantor    Guarantor   Handling              Handling   Holdings               Holdings
                                    Subsidiares  Subsidiares Inc.     Eliminations Inc.       Inc.    Eliminations   Inc.
                                    ---------------------------------------------------------------------------------------------
Revenues
<S>                                    <C>        <C>        <C>        <C>        <C>        <C>        <C>       <C>
   Net Sales                           $ 63,854   $  3,057   $   --     $   (192)  $ 66,719   $   --     $   --    $ 66,719
   Other Income - net                        --        --        --         --         --         --         --         --
                                       --------   --------   --------   --------   --------   --------   --------  --------
                                         63,854      3,057       --         (192)    66,719       --         --      66,719

Cost of Sales                            48,840      2,224       --         (192)    50,872       --         --      50,872
Selling, General and
  Administrative Expenses                15,158        905        797       --       16,860       --         --      16,860

Operating Income (Loss)                    (144)      (72)       (797)      --       (1,013)      --         --      (1,013)

Gain on Sale of Business                     --        --       6,380       --        6,380       --         --       6,380

Interest (Expense) Income - net
   Affiliates                            (1,635)       (90)     1,725       --         --         --         --        --
   Third Party                              (62)       (74)    (7,614)      --       (7,750)      --         --     (7,750)
                                       --------   --------   --------   --------   --------   --------   --------  --------

Loss Before Income Taxes,Equity in Earnings
   (Loss)of
   Subsidiaries and Minority Interest    (1,841)      (236)      (306)      --       (2,383)      --         --     (2,383)
Benefit(Provision) for Income Taxes        (305)       (83)    (1,400)      --       (1,788)      --         --     (1,788)
Equity in Earnings (Loss)
  of Subsidiaries                          (303)      --       (2,449)     2,752       --       (4,155)     4,155     --
Minority Interest                          --         --         --           16         16       --         --         16
                                       --------   --------   --------   --------   --------   --------   --------  --------
Net Income (Loss)                      $ (2,449)  $   (319)  $ (4,155)  $  2,768   $ (4,155)  $ (4,155)  $  4,155  $(4,155)
                                       ========   ========   ========   ========   ========   ========   ========  ========
</TABLE>

<PAGE>

<TABLE>


                               SUPPLEMENTAL CONDENSED COMBINING STATEMENT OF OPERATIONS
                                     FOR THE THREE MONTHS ENDED JANUARY 31, 1999
                                                     (UNAUDITED)
                                                (Dollars in Thousands)

<CAPTION>

                                                                                   Consolidated
                                                             Morris                Morris                            Consolidated
                                                 Non         Material              Material   MMH                    MMH
                                    Guarantor    Guarantor   Handling              Handling   Holdings               Holdings
                                    Subsidiares  Subsidiares Inc.     Eliminations Inc.       Inc.    Eliminations   Inc.
                                    ---------------------------------------------------------------------------------------------
Revenues
<S>                                    <C>        <C>        <C>        <C>        <C>        <C>        <C>       <C>
   Net Sales                           $ 64,139   $  4,097   $   --     $   (316)  $ 67,920   $   --     $   --    $ 67,920
   Other Income - net                        77         25       --         --          102       --         --         102
                                       --------   --------   --------   --------   --------   --------   --------  --------
                                         64,216      4,122       --         (316)    68,022       --         --      68,022

Cost of Sales                            47,832      3,098       --         (316)    50,614       --         --      50,614
Selling, General and
  Administrative Expenses                14,823        887        223       --       15,933       --         --      15,933


Operating Income (Loss)                   1,561        137       (223)      --        1,475       --         --       1,475

Interest (Expense) Income - net
   Affiliates                            (1,610)       (95)     1,705       --         --         --         --        --
   Third Party                             (131)      (138)    (6,639)      --       (6,908)      --         --     (6,908)
                                       --------   --------   --------   --------   --------   --------   --------  --------

Loss Before Income Taxes,
  Equity in Earnings (Loss)of
   Subsidiaries and
    Minority Interest                      (180)       (96)    (5,157)      --       (5,433)      --         --     (5,433)
Benefit for Income Taxes                    206       --        2,247       --        2,453       --         --       2,453
Equity in Earnings (Loss)
  of Subsidiaries                           (90)      --          (64)       154       --       (2,974)     2,974      --
Minority Interest                          --         --            6          6       --         --            6
                                       --------   --------   --------   --------   --------   --------   --------  --------
Net Income (Loss)                      $    (64)  $    (96)  $ (2,974)  $    160   $ (2,974)  $ (2,974)  $  2,974  $(2,974)
                                       ========   ========   ========   ========   ========   ========   ========  ========
</TABLE>

<PAGE>

<TABLE>


                             SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
                                     FOR THE THREE MONTHS ENDED JANUARY 31, 2000
                                                     (UNAUDITED)
                                                (Dollars in Thousands)
<CAPTION>

                                                                                         Consolidated
                                                                   Morris                Morris                         Consolidated
                                                       Non         Material              Material   MMH                    MMH
                                          Guarantor    Guarantor   Handling              Handling   Holdings               Holdings
                                          Subsidiares  Subsidiares Inc.     Eliminations Inc.       Inc.    Eliminations   Inc.
                                          ------------------------------------------------------------------------------------------
Operating Activities
<S>                                          <C>        <C>        <C>        <C>        <C>        <C>        <C>        <C>
   Net income (Loss)                         $ (2,449)  $   (319)  $ (4,155)  $  2,768   $ (4,155)  $ (4,155)  $  4,155   $ (4,155)
   Add (deduct) - items not affecting
     cash provided by operating activities:
       Depreciation and amortization            2,361         74         10       --        2,445       --         --        2,445
       Amortization of debt financing costs      --         --          585       --          585       --         --          585
       Equity in loss of subsidiaries             303       --        2,449     (2,752)      --        4,155     (4,155)      --
       Gain on sale of business                  --         --       (6,380)      --       (6,380)      --         --       (6,380)
       Deferred income taxes - net               --         --         --         --         --         --         --         --
       Other                                     --         --         --           (6)        (6)      --         --           (6)
   Changes in working  capital,  excluding
      the effects of  acquisition  opening
      balance sheets:
       Accounts receivable                        380        425       --         --          805       --         --          805
       Inventories                             (1,219)       (10)      --         --       (1,229)      --         --       (1,229)
       Other current assets                      (551)       (23)      --         --         (574)      --         --         (574)
       Trade accounts payable and bank
        overdrafts                             (7,083)       496       --         --       (6,587)      --         --       (6,587)
       Accrued interest                          --         --        5,524       --        5,524       --         --        5,524
       Other current liabilities                3,768       (148)     1,962       --        5,582       --         --        5,582
                                             --------   --------   --------   --------   --------   --------   --------   --------
   Net cash provided by (used for)
     operating activities                     (10,870)       495      6,375         10     (3,990)      --         --       (3,990)
                                             --------   --------   --------   --------   --------   --------   --------   --------

Investment and Other Transactions
   Fixed asset additions - net                   (318)       (16)      --         --         (334)      --         --         (334)
   Capitalized software - net                    (624)      --         --         --         (624)      --         --         (624)
   Net proceeds on divestiture of business      9,115       --         --         --        9,115       --         --        9,115
   Other - net                                     82         (9)         6       --           79       --         --           79
                                             --------   --------   --------   --------   --------   --------   --------   --------
   Net cash used for investment
      and other transactions                    8,255        (25)         6       --        8,236       --         --        8,236
                                             --------   --------   --------   --------   --------   --------   --------   --------

Financing Activities
   Changes in short-term debt
     and notes payable                          1,936        (16)      --         --        1,920       --         --        1,920
   Net repayments of Revolving Credit
       Facility borrowings                       --         --       (6,200)      --       (6,200)      --         --       (6,200)
   Repayments of Term Loans                      --         --       (3,100)      --       (3,100)      --         --       (3,100)
   Repayments of Acquisition Facility
    Line borrowings                              --         --         (336)      --         (336)      --         --         (336)
   Distribution to parent                      (8,211)       186      8,025       --         --         --         --         --
   Repayments of long-term debt                   (87)      --         --         --          (87)      --         --          (87)
   Payment of fees for amendment
     of New Credit Facility                      --         --         (133)      --         (133)      --         --         (133)
                                             --------   --------   --------   --------   --------   --------   --------   --------
   Net cash provided by (used for)
    financing activities                      (6,362)        170     (1,744)      --       (7,936)      --         --       (7,936)
                                             --------   --------   --------   --------   --------   --------   --------   --------
Effect of Exchange Rate Changes on
 Cash and Cash Equivalents                          3         (5)      --         --           (2)      --         --           (2)

Increase (Decrease) in Cash and
  Cash Equivalents                             (2,594)       635     (1,743)        10     (3,692)      --         --       (3,692)
Cash and Cash Equivalents
   Beginning of Period                          2,325        104      1,500       --        3,929       --         --        3,929
                                             --------   --------   --------   --------   --------   --------   --------   --------
   End of Period                             $   (269)  $    739   $   (243)  $     10   $    237   $   --     $   --     $    237
                                             ========   ========   ========   ========   ========   ========   ========   ========
</TABLE>

<PAGE>

<TABLE>

                            SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
                                     FOR THE THREE MONTHS ENDED JANUARY 31, 1999
                                                     (UNAUDITED)
                                                (Dollars in Thousands)
<CAPTION>

                                                                                         Consolidated
                                                                   Morris                Morris                         Consolidated
                                                       Non         Material              Material   MMH                    MMH
                                          Guarantor    Guarantor   Handling              Handling   Holdings               Holdings
                                          Subsidiares  Subsidiares Inc.     Eliminations Inc.       Inc.    Eliminations   Inc.
                                          ------------------------------------------------------------------------------------------
Operating Activities
<S>                                          <C>        <C>        <C>        <C>        <C>        <C>        <C>        <C>
   Net income (Loss)                         $    (64)  $    (96)  $ (2,974)  $    160   $ (2,974)  $ (2,974)  $  2,974   $ (2,974)
   Add (deduct) - items not affecting
     cash provided by operating activities:
       Depreciation and amortization            1,744         62       --         --        1,806       --         --        1,806
       Amortization of debt financing costs      --         --          493       --          493       --         --          493
       Equity in loss of subsidiaries              90       --           64       (154)      --        2,974     (2,974)      --
       Deferred income taxes - net               (709)      --       (2,248)      --       (2,957)      --         --        (2,957)
       Other                                     --         --         --           (6)        (6)      --         --           (6)
   Changes in working  capital,  excluding
      the effects of  acquisition  opening
      balance sheets:
       Accounts receivable                     11,031        881       --         --       11,912       --         --       11,912
       Inventories                                936       (126)      --         --          810       --         --          810
       Other current assets                     7,434     (1,391)    (9,621)      --       (3,578)      --         --        (3,578)
       Trade accounts payable and bank
        overdrafts                             (8,434)       117       --         --       (8,317)      --         --       (8,317)
       Accrued interest                           110       --        4,726       --        4,836       --         --        4,826
       Other current liabilities              (14,714)       383      9,904       --       (4,427)      --         --       (4,427
                                             --------   --------   --------   --------   --------   --------   --------   --------
   Net cash provided by (used for)
     operating activities                      (2,576)     (170)        344       --       (2,402)      --         --       (2,402)
                                             --------   --------   --------   --------   --------   --------   --------   --------

Investment and Other Transactions
   Fixed asset additions - net                 (1,586)       (48)      --         --       (1,634)      --         --       (1,634)
   Capitalized software - net                    (276)      --         --         --         (276)      --         --         (276)
   Net proceeds on divestiture of business     (4,989)      --         --         --       (4,989)      --         --       (4,989
   Other - net                                    162        (36)      --         --          126       --         --          126
                                             --------   --------   --------   --------   --------   --------   --------   --------
   Net cash used for investment
      and other transactions                   (6,689)       (84)      --         --       (6,773)      --         --       (6,773)
                                             --------   --------   --------   --------   --------   --------   --------   --------

Financing Activities
   Changes in short-term debt
     and notes payable                         10,268         86       --         --       10,354       --         --       10,354
   Net repayments of Revolving Credit
       Facility borrowings                       --         --       (1,200)      --       (1,200)      --         --       (1,200)
  Repayments of Acquisition Facility
    Line borrowings                              --         --        1,235       --        1,235       --         --        1,235
   Distribution to parent                        (158)      --          158       --         --         --         --         --
   Repayments of long-term debt                  --         --         (337)      --         (337)      --         --         (337)
                                              --------   --------   --------   --------   --------   --------   --------   --------
    Net cash provided by (used for)
    financing activities                       10,110         86       (144)      --       10,052       --         --       10,052
                                             --------   --------   --------   --------   --------   --------   --------   --------
Effect of Exchange Rate Changes on
 Cash and Cash Equivalents                        (42)        (9)      --         --          (51)      --         --          (51)

Increase (Decrease) in Cash and
  Cash Equivalents                                803       (177)       200       --          826       --         --          826
Cash and Cash Equivalents
   Beginning of Period                          2,214        320       --         --        2,534       --         --        2,534
                                             --------   --------   --------   --------   --------   --------   --------   --------
   End of Period                             $  3,017   $    143   $    200   $   --     $  3,360   $   --     $   --     $  3,360
                                             ========   ========   ========   ========   ========   ========   ========   ========
</TABLE>

<PAGE>

                               MMH HOLDINGS, INC.
                         MORRIS MATERIAL HANDLING, INC.

                 MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS


The  following  discussion  should  be read in  conjunction  with the  Financial
Statements and the related notes thereto  included  previously in this document.
The Company's  fiscal year ends October 31.  Consequently,  any reference to any
particular fiscal year means the fiscal year ended October 31 of such year.

General

The Company is an international provider of "through-the-air"  material handling
products and  services  used in most  manufacturing  industries.  The  Company's
original  equipment  operations  design and manufacture a comprehensive  line of
industrial  cranes,  hoists and  component  products.  Through  its  aftermarket
operations,  the Company  provides a variety of related  products and  services,
including  replacement  parts,  repair  and  maintenance  services  and  product
modernizations. In recent years, the Company has shifted its orientation from an
original  equipment-focused  United States manufacturer to an international full
service  provider  with a  significant  emphasis on the high margin  aftermarket
business.  The  Company's  revenues  are  derived  principally  from the sale of
industrial  overhead  cranes,  component  products and aftermarket  products and
services.

Recapitalization.  Historically,  the Company  conducted  its business as one of
several  operating units of Harnischfeger  Industries,  Inc.  ("HII").  Prior to
March 30, 1998, the core United States  operations of the Company were conducted
directly by HarnCo, while the remainder of the Company's  operations  throughout
the world  were  conducted  through  a number of  entities  owned,  directly  or
indirectly, by HII and its affiliates.

On January 28, 1998, HII reached an agreement with MHE  Investments,  Inc. ("MHE
Investments"),  a newly formed affiliate of Chartwell  Investments Inc., for the
sale  of an  approximately  80  percent  common  ownership  interest  in the MHE
Business. Pursuant to this agreement, HarnCo and other HII affiliates effected a
number of  transactions  (the  "Transactions"  or the  "Recapitalization")  that
resulted  in  Holdings,  a  preexisting  company  engaged  in the MHE  Business,
acquiring,  through MMH, its newly formed  wholly-owned  subsidiary,  the equity
interests of all of the operating  entities  engaged in the MHE  Business.  As a
result of the  reorganization of the MHE Business' legal entities,  Holdings and
the Company became the successor companies to the MHE Business. The Transactions
are  accounted  for as a  recapitalization  for  financial  reporting  purposes.
Accordingly,  the historical  basis of the Company's  assets and liabilities was
not impacted by the Transactions.

In conjunction  with the  Recapitalization,  which closed on March 30, 1998 (the
"Recapitalization  Closing"),  Holdings  sold  $60.0  million of Series A Units,
consisting  of $57.7  million  liquidation  preference of Holdings' 12% Series A
Senior  Exchangeable  Preferred Stock (the "Holdings  Series A Senior  Preferred
Stock") and 720 shares of non-voting  common stock, to institutional  investors.
In addition,  MMH sold $200.0 million  aggregate  principal amount of its 9 1/2%
Senior  Notes due 2008 (the "Senior  Notes") and entered  into a senior  secured
credit facility ("the New Credit  Facility").  The New Credit Facility  includes
$55.0 million of term loans (the "Term Loans"), a revolving credit facility (the
"Revolving  Credit  Facility")  and an  acquisition  facility (the  "Acquisition
Facility"). The Revolving Credit Facility initially provided the Company with up
to $70.0 million of available  borrowings for working capital,  acquisitions and
other corporate  purposes,  subject to compliance with certain  conditions.  The
Acquisition  Facility  initially  permitted  the  Company  to borrow up to $30.0
million until the third anniversary of the  Recapitalization  Closing to finance
acquisitions,  subject to  compliance  with certain  conditions.  The New Credit
Facility was amended on August 2, 1999. See  "Liquidity and Capital  Resources."
As amended,  the Revolving  Credit Facility  provided $50.7 million of available
borrowings  ($10.0  million of which was required to be reserved for issuance of
letters of credit),  and the Acquisition  Facility provided for $12.4 million of
borrowings ($7.4 million of which was previously funded by the lenders under the
New Credit  Facility  and $5.0  million of which was funded by  indirect  equity
holders in  Holdings)  for  acquisitions  and  general  corporate  purposes.  No
additional  borrowings under the Acquisition Facility are available from lenders
under the New Credit Facility.

<PAGE>

The Company did not meet certain financial covenants contained in the New Credit
Facility for the quarter ended January 31, 2000 and does not anticipate  meeting
them  for  the  foreseeable  future  thereafter.  The  Company  entered  into an
Amendment  and Waiver  under the New Credit  Facility,  dated as of January  31,
2000, whereby, among other matters, the lenders waived compliance by the Company
with such financial  covenants,  for the period from January 31, 2000 until 5:00
p.m.  March 29, 2000 (the  "January  Waiver").  The January  Waiver  permits the
Company, subject to certain conditions,  to make additional borrowings under the
Revolving Credit Facility and issue additional  letters of credit,  above levels
in existence on January 31, 2000, in an aggregate amount of up to $12.0 million,
during the waiver period.

Currently,  the Company is not generating  sufficient  funds from  operations to
satisfy working capital and debt service requirements, and as a result must rely
on  Revolving  Credit  Facility  borrowings  to continue  to operate.  While the
Company  anticipates  that cash generated from  operations and Revolving  Credit
Facility  borrowings  will be  sufficient  to enable it to satisfy its cash flow
needs  until  March  29,  2000,  there  can be no  assurance  that it will  have
sufficient  cash  flow  and  borrowings  available  to  enable  it to  meet  its
obligations  until such date. Upon the expiration of the January Waiver on March
29, 2000,  the Company  will not have  sufficient  cash to continue  operations,
unless  arrangements  can be entered into to provide  liquidity for the Company.
See "Liquidity and Capital Resources."

At the  Recapitalization  Closing, (i) MHE Investments paid HarnCo $54.0 million
for 72.6% of Holdings'  common stock (the "Holdings Common Stock") (after giving
effect  to  the  Transactions)  and  approximately   $28.9  million  liquidation
preference  of Holdings' 12 1/2% Series C Junior Voting  Exchangeable  Preferred
Stock (the "Holdings  Series C Junior Voting  Preferred  Stock"),  (ii) Holdings
redeemed  certain shares of Holdings  Common Stock and Holdings  Series C Junior
Voting  Preferred  Stock  from  HarnCo for $282.0  million in cash  (subject  to
potential  post-Recapitalization  adjustments  as to  which an  additional  $5.0
million was  provided  to HarnCo) and  approximately  $4.8  million  liquidation
preference  of Holdings' 12 1/4% Series B Junior  Exchangeable  Preferred  Stock
(the "Holdings  Series B Junior  Preferred  Stock"),  and (iii) HarnCo  retained
approximately  20.8% of the Holdings  Common Stock (after  giving  effect to the
Transactions).

In  connection  with,  and as a condition  to, the lenders  under the New Credit
Facility  entering into the August 2, 1999 Amendment to the New Credit Facility,
certain of the current  indirect equity holders in Holdings  purchased,  through
Martin Crane L.L.C.  ("Martin Crane"), a newly formed limited liability company,
a $5.0 million  participation  in the New Credit Facility and received shares of
non-voting common stock of Holdings, in consideration  therefor. As a result, at
January 31,  2000,  MHE  Investments  owns  approximately  54.5% of the Holdings
Common  Stock,  HarnCo owns  approximately  15.6% of the Holdings  Common Stock,
institutional  investors own approximately 4.9% of the Holdings Common Stock and
Martin Crane owns approximately 25.0% of the Holdings Common Stock.

At the  Recapitalization  Closing,  MMH  entered  into a  number  of  agreements
pursuant to which HII and its affiliates  continued to provide to MMH and to its
subsidiaries  located  in the  United  States,  on an  interim  basis  and under
substantially  the same  terms and  conditions  as before the  closing,  certain
products  and  services.  In  addition,  HII  and  MMH  entered  into  a  credit
indemnification  agreement (the "Credit Indemnification  Agreement") pursuant to
which HII will maintain in place the credit support  obligations in existence at
the Recapitalization  Closing but have no further duty to extend, renew or enter
into  any  new  credit  support  obligations  (except  as to  the  MHE  Business
obligations  existing  at  the  Recapitalization   Closing).  Under  the  Credit
Indemnification Agreement, MMH is required to pay HII, in advance, an annual fee
equal to 1% of the  amounts  outstanding  under  each  letter of credit and bond
provided by HII and its  affiliates  (approximately  $26.7 million as of January
31, 2000).  MMH accrued a fee of $55,800 for the first quarter of 2000.  HII is
required to refund the Company on a  quarterly  basis a pro-rata  portion of the
annual fee for any reductions in the outstanding  amount of credit that occurred
during such  quarter.  In addition,  the Company will  reimburse HII for certain
future fees and  expenses.  The Company also  entered into a surety  arrangement
(the   "Surety    Arrangement")    to   provide    credit    support   for   its
post-Recapitalization Closing operations.

In  connection  with the  Recapitalization,  the  Company  also  entered  into a
trademark  license  agreement  (the  "Trademark  License   Agreement")  with  an

<PAGE>

affiliate of HarnCo,  pursuant to which the Company has the right to use the P&H
trademark  with  respect to all MHE Business  products on a worldwide  exclusive
basis from the date of the  Recapitalization  Closing  until 15 years  after the
earlier to occur of a sale of Holdings to a third party or a public  offering of
the common stock of Holdings,  the Company or their parents or  successors  (and
for an additional seven years thereafter for aftermarket products and services).
The royalty fee for use of the  trademark is 0.75% of the aggregate net sales of
the MHE Business for the ten year period  commencing March 30, 1999. The Company
accrued  $1,839,000  of expenses  for royalty  fees in the period from March 30,
1999 to January 31, 2000,  including  $486,000 for the quarter ended January 31,
2000. The Company elected to defer the payment of the royalty fee for the period
ended  October  31, 1999  ($1,353,000),  which was  payable  January  30,  2000,
pursuant to the terms of the Trademark License Agreement.  The Trademark License
Agreement  provides  that the annual  royalty fee may be deferred  for up to two
years if the Company does not meet certain financial  criteria.  The Company can
only defer up to two  payments  during the term of the  agreement.  In addition,
interest accrues at 12% per year on the deferred fee payments.

As discussed  below, the Company could be materially  adversely  affected by the
fact that HII and certain of its United States  affiliates  filed for bankruptcy
protection.

For income tax  purposes,  Holdings and MMH were deemed to acquire the assets of
the MHE Business  pursuant to Code Section  338(h)(10)  in  connection  with the
Transactions.  Accordingly,  the  Recapitalization  increased  the tax  basis of
certain assets and created tax-deductible goodwill.

On June 7, 1999,  (the  "Petition  Date") HII and  certain of its United  States
affiliates (including HarnCo) filed voluntary petitions for relief under Chapter
11 of the Bankruptcy Code in the United States Bankruptcy Court for the District
of Delaware.  Certain provisions of the Bankruptcy Code allow a debtor to avoid,
delay and/or reduce its  contractual  and other  obligations  to third  parties.
There  can be no  assurance  that HII and its  affiliates  will not  attempt  to
utilize  such  provisions  to  cease  performance  under  their  agreements  and
arrangements  with the  Company.  The  inability  of the  Company to receive the
benefits  of one or more of  these  agreements  or the  termination  of  ongoing
arrangements between the Company and affiliates of HII (including those relating
to the  provision of services and  materials  by HII and its  affiliates  to the
Company)  could  materially   adversely  affect  the  Company's  operations  and
financial performance.  In the event that any of the liabilities retained by HII
and its affiliates in connection with the Recapitalization remain unsatisfied as
of the  Petition  Date,  the  Company's  right to  indemnification  for any such
amounts  it has paid on behalf of HII and its  affiliates  may also be  avoided,
delayed or reduced.

Each of HII and certain of its  affiliates on the one hand,  and the Company and
certain of its affiliates,  on the other hand, have  receivables and payables to
the other that may be affected by the HII Bankruptcy.

Acquisitions and Divestitures

Acquisitions  - During the three months ended January 31, 2000,  the Company did
not make any  acquisitions.  During the three months ended January 31, 1999, the
Company  completed  one  acquisition  with an aggregate  purchase  price of $3.1
million, net of cash acquired,  including approximately $1.0 million financed by
the seller. This acquisition was related to the Company's  aftermarket  business
and  was  accounted  for as a  purchase  transaction  with  the  purchase  price
allocated to the fair value of specific assets acquired and liabilities assumed.
Resultant  goodwill  of $1.8  million  is being  amortized  over 40 years.  This
acquisition  was  partially  financed  by the  seller,  resulting  in a deferred
purchase  price  which will be paid in 2004 and 2005.  During  the three  months
ended January 31, 1999,  the Company made final  consideration  payments of $1.5
million related to two 1998  acquisitions.  In addition,  with respect to a 1995
acquisition, the Company was required to make a contingent consideration payment
of $1.3  million in the three months ended  January 31,  1999.  Additionally,  a
payment of $100 was made in each of the three month  periods  ended  January 31,
2000 and 1999 toward a fiscal 1998 purchase which was partially  financed by the
seller.  On a pro forma basis,  the fiscal 1999  acquisition was not material to
results of  operations  reported for the three months ended January 31, 2000 and
accordingly, such information is not presented.

Divestitures-On  December 16, 1999, the Company  completed the sale of the Brake
Business located in Mississauga,  Ontario,  Canada, for a net sale price of $6.8
million after deduction of certain  transaction-related  items, including taxes.
During the first  quarter of fiscal year 2000,  the Brake  Business  contributed
$0.5  million  in sales and no  operating  income to the  Company's  results.  A
pre-tax gain of $6.4 million was recognized on this transaction.

<PAGE>

Results of Operations

The following table sets forth certain financial data for the periods indicated.
<TABLE>

                                Supplemental Data
                              (Dollars in Millions)
<CAPTION>

                                   Three months ended     Three months ended
                                    January 31, 2000       January 31, 1999
                                ------------------------   -----------------
                                               Percent of            Percent of
                                     $         net sales      $      net sales
                                ---------      ----------  --------  ----------

<S>                              <C>           <C>        <C>          <C>
Net Sales                        $  66.7       100.0%     $  67.9      100.0%
Other income - net                   --          --           0.1        0.1%
Cost of sales                       50.9        76.2%        50.6       74.5%
Selling, general and
      Administrative expenses       16.8        25.1%        15.9       23.4%
Operating income (loss)             (1.0)       -1.3%         1.5        2.2%
Gain on sale of business             6.4         9.5%          --         --
Interest expense                    (7.8)      -11.6%        (6.9)     -10.2%
Tax benefit (expense)               (1.8)       -2.7%         2.4        3.5%
Net loss                            (4.2)       -6.2%        (3.0)      -4.5%
</TABLE>

<PAGE>

Three  Months Ended  January 31, 2000 as Compared to Three Months Ended  January
31, 1999

Net sales for the three months ended  January 31, 2000  ("First  Quarter  2000")
decreased $1.2 million or 1.8% to $66.7 million from $67.9 million for the three
months ended January 31, 1999 ("First Quarter 1999").  The decrease in net sales
was primarily caused by the following:  (i) a decrease of $2.6 million in hoists
and  components  in Europe and South  Africa  reflecting  softness in their home
markets as well as in Southeast  Asia; and (ii) a decrease in standard cranes of
$1.7 million in the United Kingdom due to reduced  bookings in the end of Fiscal
1999.  These decreases were partially offset by: (i) an increase of $1.5 million
in  engineered  cranes in the United States  caused by better  backlog  entering
First Quarter 2000 than there was at the  beginning of First  Quarter 1999;  and
(ii) an increase in overall parts sales of $0.6 million  resulting from shipment
of a large spare parts order for a steel mill.

Cost of sales  increased  $0.3 million or 0.6% to $50.9 million in First Quarter
2000 from $50.6  million in First  Quarter  1999.  Cost of sales  increased as a
percentage  of net  sales  from  74.5% in First  Quarter  1999 to 76.2% in First
Quarter 2000 due to lower selling prices as a result of competitive  pressure in
tight markets for all of the Company's products and services.

Selling,  general and administrative  expenses increased $0.9 million or 5.8% to
$16.8  million in First  Quarter 2000 from $15.9  million in First Quarter 1999.
The  primary  causes  were:  (i) the  accrued  royalty to HII for use of the P&H
trademark; (ii) increased goodwill amortization due to changing the amortization
period for the goodwill related to the Company's international  operations;  and
(iii)  increases  due to a fiscal 1999  acquisition  subsequent to First Quarter
1999.  These increases were partially  offset by savings  realized due to fiscal
1999  restructuring  of the  United  Kingdom  and United  States  administrative
functions.

Approximately  $7.8  million in  interest  expense,  including  $0.6  million in
amortization  of related  financing  costs,  was recorded in First  Quarter 2000
compared to $6.9  million,  including  $0.5 million in  amortization  of related
financing  costs,  in First  Quarter  1999.  The  Company  paid $1.5  million of
interest  and  commitment  fees  during  both the First  Quarter  2000 and First
Quarter 1999.

The income tax expense in First Quarter 2000 related  primarily to the estimated
tax recorded on the sale of the Brake Business in December 1999.

The  Company's  backlog of orders at January  31, 2000 was  approximately  $88.0
million compared to $92.5 million at January 31, 1999. Bookings in First Quarter
2000 were $77.3 million  compared to $63.1  million in First  Quarter 1999.  The
overall backlog is lower primarily due to the completion of several large orders
that were in backlog a year ago and the normal  variability in booking  patterns
for highly engineered cranes.
<PAGE>

Liquidity and Capital Resources

The  majority of the  Company's  sales of products  and services are recorded as
products  are shipped or services  are  rendered.  Revenue on certain  long-term
contracts is recorded using the  percentage-of-completion  method. Net cash flow
from  operations is affected by the volume of, and timing of the payments under,
percentage-of-completion long-term contracts.

Net cash flow used for  operating  activities  for First  Quarter 2000 and First
Quarter 1999 was $4.0 million and $2.4 million, respectively.

Net cash provided by  investment  and other  transactions  for the First Quarter
2000 was $8.2  million  compared  to net cash  used  for  investment  and  other
transactions  of $6.8  million  for the First  Quarter  1999.  During  the First
Quarter 2000,  $9.1 million of cash, net of transaction  costs,  was provided by
the sale of the Company's  Brake  Business.  Also during the First Quarter 2000,
$0.1  million of cas hwas used for deferred  payments on previous  acquisitions.
During the First Quarter 1999, $5.0 million was used for an acquisition  related
to the Company's  distribution and service center network and payments made with
respect  to  three  earlier  acquisitions.  Additionally,  capital  expenditures
decreased  to $0.3  million  in First  Quarter  2000 from $1.6  million in First
Quarter  1999.  The First  Quarter  2000  expenditures  included  computers  and
manufacturing  equipment. The First Quarter 1999 expenditures included computers
and upgrades, new operating system software, office and warehouse consolidations
and manufacturing equipment.

Net cash used for  financing  activities  was $7.9 million in First Quarter 2000
compared to net cash provided by financing  activities of $10.1 million in First
Quarter 1999 (after  giving  effect to the  repayment  subsequent to January 31,
1999 of $25.4 million that was borrowed on January  29,1999).  Net repayments of
$4.3 million in the First Quarter 2000 included $6.2 million of repayments under
the Revolving  Credit Facility in the United States.  The Company also paid $3.4
million of principal on the Term Loan A, Term Loan B, and  Acquisition  Facility
from the net proceeds from the sale of the Canadian brake business.

The Company did not meet certain of the financial covenants under the New Credit
Facility for the period ended  January 31, 1999 and did not meet such  financial
covenants and certain additional  financial covenants for the period ended April
30, 1999.  The Company  obtained  waivers of such  financial  covenants  through
August 2, 1999.  The waivers  permitted  the Company to borrow  certain  amounts
under the Revolving  Credit Facility to meet its working  capital  requirements;
however the Company  could not,  without  prior lender  consent,  (i) borrow any
amounts  under the  Acquisition  Facility,  (ii)  borrow any  amounts  under the
Revolving  Credit  Facility in excess of the  aggregate  amount of the Revolving
Credit Facility  borrowings  that the Company had repaid  subsequent to March 2,
1999,  or (iii)  request  the  issuance  of  letters  of  credit,  bid  bonds or
performance  bonds in an aggregate  amount after March 2, 1999 in excess of $5.0
million.

On August 2, 1999, the Company  obtained an amendment to the New Credit Facility
(the  "Amendment")  which cured past  financial  covenant  violations  and reset
financial  covenants  under  the New  Credit  Facility  until  April  2001.  The
Amendment  increased the cash  availability  under the Revolving Credit Facility
from $35.7 million under the previous waiver agreement to $40.7 million.  At the
end of First  Quarter  2000,  the  Company  had  $23.6  million  of  outstanding
Revolving Credit Facility borrowings.  In addition,  the Amendment permitted the
Company  to obtain  letters  of credit,  bid bonds and  performance  bonds in an
amount not to exceed $10.0  million in the  aggregate of which $5.2 million have
been issued.

In  connection  with,  and as a  condition  to the New Credit  Facility  lenders
entering into, the Amendment,  certain of the current indirect equity holders in
Holdings,  through Martin Crane,  purchased a $5.0 million  participation in the
New  Credit  Facility  and  received  certain  non-voting  equity  interests  in
Holdings, consisting of 25% of the then outstanding Holdings Common Stock.

<PAGE>

The Company did not meet certain financial covenants contained in the New Credit
Facility for the quarter ended January 31, 2000 and anticipates that it will not
meet them in the  foreseeable  future  thereafter.  The Company  entered into an
Amendment  and Waiver  under the New Credit  Facility,  dated as of January  31,
2000, whereby, among other matters, the lenders waived compliance by the Company
with such financial  covenants,  for the period from January 31, 2000 until 5:00
p.m. March 29, 2000. The January Waiver permits the Company,  subject to certain
conditions,  to make additional  borrowings  under the Revolving Credit Facility
and issue additional letters of credit, above levels in existence on January 31,
2000, in an aggregate amount of up to $12.0 million, during the waiver period.

Currently,  the Company is not generating  sufficient  funds from  operations to
satisfy working capital and debt service requirements, and as a result must rely
on  Revolving  Credit  Facility  borrowings  to continue  to operate.  While the
Company  anticipates  that cash generated from  operations and Revolving  Credit
Facility  borrowings  will be  sufficient  to enable it to satisfy its cash flow
needs  until  March  29,  2000,  there  can be no  assurance  that it will  have
sufficient  cash  flow  and  borrowings  available  to  enable  it to  meet  its
obligations until such date.

Until March 29, 2000 and thereafter, the Company may experience severe financial
and  operational  difficulties  resulting from its liquidity  situation that may
prevent it from continuing operations.

In addition,  at the time of expiration of the January Waiver,  the Company will
again  be in  default  under  certain  financial  covenants  of the  New  Credit
Facility.  As a result of these defaults,  the lenders ("Lenders") under the New
Credit  Facility  will be able to declare all amounts of  principal  and accrued
interest  outstanding under the New Credit Facility  immediately due and payable
(an "Acceleration").  If such Lenders so accelerate,  the Company will then also
be in default under the indenture  governing the Senior Notes (the "Indenture").
In such  event,  the  Company  would  not be able to cure such  default  and the
trustee under the Indenture will be able to accelerate the Company's outstanding
indebtedness  (including  accrued  interest)  evidenced by the Senior Notes. The
Company will not have  sufficient  funds to repay the  outstanding  indebtedness
under the New Credit Facility or the Senior Notes if either such indebtedness is
accelerated.  As of the end of the first quarter of 2000, the Company had $298.0
million of  indebtedness  outstanding,  including  $85.8  million  under the New
Credit Facility (including accrued interest) and $206.3 million evidenced by the
Senior Notes (including accrued interest).

In the event that the Lenders do not cause an Acceleration to occur on March 29,
2000, the Company will  nonetheless be unable to meet certain of its obligations
as they become due after such date,  including a $9.5 million  interest  payment
obligation under the Senior Notes due on April 1, 2000. As a result, the Lenders
and, after the expiration of the applicable grace period,  the trustee under the
Indenture  will  have  the  right  to  accelerate   the  Company's   outstanding
indebtedness. In such event, the Company will not have sufficient funds to repay
New Credit Facility borrowings and the Senior Notes.

The Company is currently seeking, and is engaged in discussions  regarding,  its
strategic alternatives.  The Company has engaged in discussions with the Lenders
and  representatives  of the holders of Senior  Notes  concerning  the  possible
restructuring of the Company's capital  structure,  including a possible sale of
the Company to a third party in connection therewith.  There can be no assurance
that the Company will be able to successfully  pursue strategic  alternatives or
that the results of its  discussions  with its creditors will be successful.  As
discussed above, if the Company fails in the near future to resolve its critical
liquidity issues, the Company may be unable to continue as a going concern.

Holdings' current primary cash needs are for administrative expenses and for the
payment  of income  taxes of  Holdings  and its  affiliates  related  to the MHE
Business.  Holdings is a holding  company that  conducts  all of its  operations
through its subsidiaries. Consequently, Holdings' ability to meet its cash needs
depends  entirely upon receiving  dividends,  loans,  advances or other payments
from its  subsidiaries.  If for the reasons  outlined  above or  otherwise,  the
Company is unable to continue as a going concern, Holdings also will not be able
to  continue  to operate as a going  concern.  The New Credit  Facility  and the
Indenture  generally restrict the ability of Holdings'  subsidiaries to transfer
funds to Holdings, other than for administrative fees and expenses (subject to a
general  limit) and other than for the payment of income taxes.  Under the terms
of the Indenture,  the Company is generally  restricted from paying dividends or
making other  restricted  payments to Holdings unless,  among other things,  the
ratio of the Company's  EBITDA to Consolidated  Interest  Expense (as defined in
the Indenture) for the four most recent  consecutive fiscal quarters is at least
2 to 1. Moreover,  the terms of the Holdings Series A Senior Preferred Stock, as
well as the Holdings  Series B Junior  Preferred Stock and the Holdings Series C
Junior  Voting  Preferred  Stock,  restrict  the  ability  of  Holdings  and its
subsidiaries to incur  additional  indebtedness.  There are no current  material

<PAGE>

restrictions  on the ability of the Company's  subsidiaries  to pay dividends or
otherwise  make payments to the Company.  In addition,  the Company  anticipates
that there will not be any material economic restrictions or adverse tax effects
with respect to the Company's ability to repatriate foreign assets. There can be
no assurance,  however, that such limitations will not exist in the future. As a
result of these  restrictions  and the  Company's  current  financial  condition
outlined  above,  it  is  unlikely  that  Holdings  will  have  available  to it
sufficient  cash resources to pay cash dividends on the Holdings Series A Senior
Preferred  Stock (or on the  Holdings  Series B Junior  Preferred  Stock and the
Holdings Series C Junior Voting Preferred Stock) commencing  October 1, 2003. In
addition, all issues of Holdings' preferred stock are mandatorily redeemable.

Euro Conversion

On January 1, 1999,  eleven of the  fifteen  member  countries  of the  European
Monetary Union (the  "participating  countries")  began a three-year  transition
from their national currencies to a new common currency,  the "euro". As of that
date, the participating  countries no longer control their own monetary policies
by  directing  independent  interest  rates for  their  national  currency.  The
national  currencies  will  remain  legal  tender and can be used in  commercial
transactions until January 1, 2002. Beginning January 1, 2002, the participating
countries  will issue new euro currency and withdraw their  respective  national
currencies  which will no longer be used as legal  tender.  The  Company's  only
significant operations in member countries of the European Monetary Union are in
the United Kindgom,  which is not a participating  country. As such,  management
does not believe that the euro conversion will have a significant  impact on the
operations,  cash flows or financial  position of the Company,  unless and until
the United Kingdom adopts the euro.

Cautionary Factors

This report contains or may contain  forward looking  statements by or on behalf
of Holdings and the Company. Such statements are based upon management's current
expectations  and are  subject to risks and  uncertainties  that could cause the
Company's  actual results to differ  materially  from those  contemplated in the
statements.  Readers are cautioned not to place undue  reliance on these forward
looking statements. In addition to the assumptions and other factors referred to
specifically  in connection with such  statements,  factors that could cause the
Company's actual results to differ materially from those  contemplated  include,
among others, the following:

          Liquidity  Status - The Company did not meet certain of the  financial
          covenants  under the New Credit  Facility for the period ended January
          31,  1999  and did not  meet  such  financial  covenants  and  certain
          additional  financial  covenants  for the period ended April 30, 1999.
          The  Company  obtained a waiver of such  financial  covenants  through
          August 2,  1999.  On August 2,  1999,  the  Company  entered  into the
          Amendment  which cured past  financial  covenant  violations and reset
          financial covenants until April 2001. The Amendment increased the cash
          availability  under the Revolving  Credit  Facility from $35.7 million
          under the previous waiver agreement to $40.7 million. In addition, the
          Amendment permitted the Company to obtain letters of credit, bid bonds
          and performance  bonds in an amount not to exceed $10.0 million in the
          aggregate of which $5.2 million have been issued.

          The Company did not meet certain financial  covenants contained in the
          New  Credit  Facility  for the  quarter  ended  January  31,  2000 and
          anticipates  that it will  not  meet  them in the  foreseeable  future
          thereafter. The Company entered into an Amendment and Waiver under the
          New Credit  Facility,  dated as of January 31,  2000,  whereby,  among
          other matters,  the lenders waived compliance by the Company with such
          financial  covenants,  for the period from January 31, 2000 until 5:00
          p.m. March 29, 2000.  The January Waiver permits the Company,  subject
          to  certain  conditions,  to  make  additional  borrowings  under  the
          Revolving  Credit  Facility  and issue  additional  letters of credit,
          above levels in existence on January 31, 2000, in an aggregate  amount
          of up to $12.0 million, during the waiver period.

          Currently,  the  Company  is  not  generating  sufficient  funds  from
          operations to satisfy working  capital and debt service  requirements,
          and as a result must rely on Revolving  Credit Facility  borrowings to
          continue to operate. While the Company anticipates that cash generated
          from  operations  and Revolving  Credit  Facility  borrowings  will be
          sufficient to enable it to satisfy its cash flow needs until March 29,
          2000, there can be no assurance that it will have sufficient cash flow
          and borrowings  available to enable it to meet its  obligations  until
          such date.

<PAGE>

          Until March 29, 2000 and thereafter, the Company may experience severe
          financial and  operational  difficulties  resulting from its liquidity
          situation that may prevent it from continuing operations. In addition,
          at the time of  expiration  of the January  Waiver,  the Company  will
          again be in  default  under  certain  financial  covenants  of the New
          Credit  Facility.  As a result of these defaults,  the Lenders will be
          able  to  declare  all  amounts  of  principal  and  accrued  interest
          outstanding under the New Credit Facility immediately due and payable.
          If the Lenders so accelerate, the Company will then also be in default
          under the Indenture.  In such event,  the Company would not be able to
          cure such default and the trustee under the Indenture  will be able to
          accelerate the Company's outstanding  indebtedness  (including accrued
          interest)  evidenced  by the Senior  Notes.  The Company will not have
          sufficient funds to repay the outstanding  indebtedness  under the New
          Credit  Facility or the Senior  Notes if either such  indebtedness  is
          accelerated.  As of the end of the first quarter of 2000,  the Company
          had  $298.0  million  of  indebtedness  outstanding,  including  $85.8
          million under the New Credit Facility (including accrued interest) and
          $206.3  million  evidenced  by the  Senior  Notes  (including  accrued
          interest).

          In the event that the Lenders do not cause an Acceleration to occur on
          March 29, 2000, the Company will nonetheless be unable to meet certain
          of its  obligations  as they  become due after such date,  including a
          $9.5 million interest payment obligation under the Senior Notes due on
          April 1, 2000. As a result,  the Lenders and, after  expiration of the
          applicable grace period, the trustee under the Indenture will have the
          right to accelerate the Company's  outstanding  indebtedness.  In such
          event,  the Company will not have sufficient funds to repay New Credit
          Facility borrowings and the Senior Notes.

          The  Company is  currently  seeking,  and is  engaged  in  discussions
          regarding,  its  strategic  alternatives.  The  Company has engaged in
          discussions  with the  Lenders and  representatives  of the holders of
          Senior Notes  concerning the possible  restructuring  of the Company's
          capital structure, including a possible sale of the Company to a third
          party in  connection  therewith.  There can be no  assurance  that the
          Company will be able to successfully pursue strategic  alternatives or
          that  the  results  of its  discussions  with  its  creditors  will be
          successful.  As  discussed  above,  if the  Company  fails in the near
          future to resolve its critical liquidity issues,  both the Company and
          Holdings may be unable to continue as going concerns.

          Potential Material Adverse Effect of HII Bankruptcy - On June 7, 1999,
          HII and certain of its United  States  affiliates  (including  HarnCo)
          filed  voluntary   petitions  for  relief  under  Chapter  11  of  the
          Bankruptcy Code in the United States Bankruptcy Court for the District
          of Delaware.  Certain provisions of the Bankruptcy Code allow a debtor
          to avoid, delay and/or reduce its contractual and other obligations to
          third  parties.  There can be no assurance that HII and its affiliates
          will not attempt to utilize such provisions to cease performance under
          their agreements and arrangements  with the Company.  The inability of
          the Company to receive the benefits of one or more of these agreements
          or the  termination  of ongoing  arrangements  between the Company and
          affiliates  of HII  (including  those  relating  to the  provision  of
          services and materials by HII and its affiliates to the Company) could
          materially  adversely  affect the Company's  operations  and financial
          performance.  In the event that any of the liabilities retained by HII
          and its  affiliates in  connection  with the  Recapitalization  remain
          unsatisfied  as  of  the  Petition   Date,  the  Company's   right  to
          indemnification  for any such amounts it has paid on behalf of HII and
          its  affiliates may also be avoided,  delayed or reduced.  Each of HII
          and certain of its affiliates on one hand, and the Company and certain
          affiliates  on the other hand,  have  receivables  and payables to the
          other which may be affected by the HII Bankruptcy.

          Risks  Associated with Large Crane Projects - The Company's  principal
          business includes  designing,  manufacturing,  marketing and servicing
          large cranes for the capital  goods  industries.  Long periods of time
          are often  necessary to plan,  design and build these  machines.  With
          respect to these machines,  there are risks of customer acceptance and
          start-up  or  performance  problems.  Large  amounts  of  capital  are
          required to be devoted by some of the Company's  customers to purchase
          these  machines and to finance the steel mills,  paper mills and other
          facilities that use these machines. The Company's success in obtaining
          and managing sales  opportunities  can affect the Company's  financial
          performance.  In addition, some projects are located in undeveloped or
          developing  economies where business  conditions are less predictable.
          Finally,  the market for large  cranes is down  substantially  and the
          outlook is not expected to improve for the foreseeable future.

          Risks  Associated  with  International  Operations  - The  Company has
          operations and assets  located in Canada,  Mexico,  Chile,  the United

<PAGE>

          Kingdom,  South  Africa,  Thailand,  Australia  and  Singapore  and is
          establishing  joint ventures in Malaysia and Saudi Arabia. The Company
          also sells its  products  through  distributors  and agents in over 50
          countries,  some of which are  merely ad hoc  arrangements  and may be
          terminated  at  any  time.  The  Company's  international   operations
          (including Canada, Mexico, Chile, South Africa,  Singapore,  Thailand,
          Australia and the United Kingdom) accounted for 36.8% and 42.0% of the
          Company's  aggregate  net sales for the three months ended January 31,
          2000 and 1999,  respectively.  Although  historically,  exchange  rate
          fluctuations and other  international  factors have not had a material
          impact on the Company's  business,  financial  condition or results of
          operations, international operations expose the Company to a number of
          risks, including currency exchange rate fluctuations,  trade barriers,
          exchange controls, risk of governmental  expropriation,  political and
          legal risks and restrictions, foreign ownership restrictions and risks
          of increases in taxes. The inability of the Company, or limitations on
          its  ability,  to conduct its foreign  operations  or  distribute  its
          products   internationally   could  adversely   affect  the  Company's
          operations and financial performance.

          Competition  - The  markets in which the Company  operates  are highly
          competitive. Both domestically and internationally,  the Company faces
          competition  from a number of different  manufacturers  in each of its
          product  lines,  some  of  which  have  greater  financial  and  other
          resources  than  the  Company.   The  principal   competitive  factors
          affecting the Company include performance, functionality, price, brand
          recognition,  customer  service and  support,  financial  strength and
          stability,  and product  availability.  The current depressed level of
          new equipment  orders has increased the intensity of  competition  and
          has  reduced  selling  prices and margins on new  equipment  bookings.
          There can be no  assurance  that the  Company  will be able to compete
          successfully  with its existing  competitors or with new  competitors.
          Failure to compete  successfully  could have a material adverse effect
          on  the  Company's  financial  condition,  liquidity  and  results  of
          operations. In addition, the Company's ability to compete successfully
          will likely be adversely affected by the Company's liquidity crisis.

          Market Risks - The Company's  business is affected by the state of the
          United  States  and  global  economy in  general,  and by the  varying
          economic  cycles of the  industries  in which its  products  are used.
          There can be no  assurance  that any  future  condition  of the United
          States  economy or the  economies of the other  countries in which the
          Company does business will not have an adverse effect on the Company's
          business, operations or financial performance.

Year 2000 Compliance

The Company has not experienced  any  significant  disruption in operations as a
result of the Year 2000 issue; however,  there remains a potential for Year 2000
problems to occur after January 1, 2000.  Management believes that any potential
problems would not have a significant impact on operations of the Company.

The potential Year 2000 problems exist as a result of computer  programs written
and systems  designed using two digits rather than four to define the applicable
year.  Consequently,  such  software has the potential to recognize a date using
"00" as the year 1900 rather than the year 2000.  This could  result in a system
failure or miscalculations causing disruptions of operations,  including,  among
other things, a temporary inability to process  transactions,  send invoices, or
engage in similar normal business activities.

Since 1996,  the Company has been  engaged in  resolving  its Year 2000  issues,
first as a subsidiary of HII, and now on its own as an independent entity. After
the  Recapitalization,  the Company  established its own Year 2000 teams.  These
teams  performed  site audits at each of the  Company's  operations  in order to
identify and address all Year 2000 issues related to both information technology
("IT") systems and internally used manufacturing and  administrative  equipment.
Hardware and software technology  guidelines were implemented worldwide in order
to ensure that all systems were Year 2000 compliant before January 1, 2000.

With  respect  to non-IT  systems,  such as  heating  and  ventilation  systems,
security systems and machine tools, the Company sought  representations from the
relevant vendors that the systems were Year 2000 compliant. The Company received
such assurances from a number of non-IT system vendors and did not encounter any
significant  unresolved  Year 2000  issues  with  respect  to such  systems.  In
addition,  in the event that there were any  unresolved  Year 2000  issues  with
respect to its non-IT  systems,  the  Company  believes  it could have  obtained
replacement services either internally or from third parties without significant
disruptions to its operations.

<PAGE>

During the third fiscal quarter of 1999, the Company's  operations in Oak Creek,
Wisconsin replaced their existing business system,  formerly shared with HarnCo.
The  decision to replace the system was based  solely on the need to move off of
the shared  system.  The vendor of the  replacement  system  represented  to the
Company that the new system is Year 2000  compliant  (which  representation  was
confirmed  by  an  outside   consultant).   The  Company   sought  and  received
representations  from the applicable  vendors that the business  systems used in
the United Kingdom, South Africa, Australia,  Singapore, Canada, and Mexico were
Year  2000  compliant.   The  operating   system  used  in  the  North  American
distribution  and service  business was made compliant  during the second fiscal
quarter of 1999 by applying the vendor supplied upgrade.

The Company  also  assessed  and  addressed  Year 2000  issues with  significant
vendors.  The Company sought  assurances from all of its vendors with respect to
Year 2000 issues.  The Company does not,  however,  control the systems of other
companies,  and cannot assure that these systems were timely  converted  and, if
not  converted,  would  not have an  adverse  effect on the  Company's  business
operations. In the event that the Company's significant vendors or suppliers did
not  complete  their  Year 2000  compliance  efforts,  the  Company  could  have
experienced disruptions in its operations.  Disruptions in the economy generally
resulting  from Year 2000  issues also could have  affected  the  Company.  With
respect to products  sold by the Company,  management  continues to believe that
any liability for Year 2000 compliance will not be material.

The Company used and will  continue to use all necessary  internal  resources to
resolve any Year 2000 issues.  The Company  completed its Year 2000  remediation
before  December 31, 1999.  Total expenses on the project  through  December 31,
1999 were  approximately $1.6 million and were primarily related to expenses for
repair or  replacement  of  software  and  hardware,  expenses  associated  with
facilities,  products and supplier reviews and project management expenses.  The
Company did not encounter any significant  expenditures subsequent to January 1,
2000 and management does not anticipate any additional significant  expenditures
in the future.

Future Accounting Changes

In June  1998,  the  Financial  Accounting  Standards  Board  (FASB)  has issued
Statement of Accounting  Standards  ("SFAS") No. 133  "Accounting for Derivative
Instruments and Hedging  Activities." It requires all derivative  instruments to
be recorded in the statements of financial position at fair value. In June 1999,
the statement's effective date was delayed by one year, and it will be effective
for the year ending October 31, 2001.  Interim  reporting for this standard will
be required. Due to the Company's current limited use of derivative instruments,
the adoption of this statement is not expected to have a material  effect on the
Company's financial condition or results of operations.

<PAGE>

Item 3.  Quantitative and Qualitative Disclosures about Market Risk

The Company is potentially  exposed to market risk  asssociated  with changes in
foreign  exchange and interest  rates.  From time to time the Company will enter
into derivative  financial  instruments to hedge these exposures.  An instrument
will be  treated  as a hedge if it is  effective  in  offsetting  the  impact of
volatility in the Company's  underlying  interest rate and foreign exchange rate
exposures. The Company does not enter into derivatives for speculative purposes.
There have been no material  changes in the Company's  market risk  exposures as
compared to those discussed in the Company's 1999 Annual Report on Form 10-K

<PAGE>

                           PART II. OTHER INFORMATION

Item 1. Legal Proceedings

        On October 28, 1996, a strong windstorm caused significant damage to the
Belview  container-handling  terminal at the Port of Waterford  in Ireland.  One
container-handling  crane sold by the Company's  United  Kingdom  subsidiary was
destroyed  and another was  seriously  damaged.  The two cranes were sold to the
Waterford  Harbour  Commissioners  in 1992 and  commissioned for use in 1993. On
October 19, 1998, the Waterford Harbour  Commissioners  wrote to the Company and
provided a notice of arbitration,  asserting breach of contract,  negligence and
breach of duty against the  Company's  United  Kingdom  subsidiary in connection
with the  destroyed and damaged  cranes.  The  Waterford  Harbour  Commissioners
claimed direct damages of IR(pound)8.5  million ($11.5 million based on exchange
rates at January  31,  2000) and  unspecified  consequential  damages.  The port
operator,  Bell Lines,  Limited,  filed a similar  claim  against the  Company's
United  Kingdom  subsidiary  in October  1999,  asserting  unspecified  damages.
Management  intends to  vigorously  defend both  matters.  One of the  Company's
insurance  carriers  has agreed to provide  defense  coverage for one of the two
cranes  involved in the accident and limited  indemnification  if the Company is
unsuccessful in defending the claims. The Company is continuing to work with its
insurance broker to determine the availability of additional insurance coverage,
if any.  While the Company  believes that it will obtain a favorable  resolution
(either by successfully  defending the claim or by obtaining  insurance coverage
thereon),  no assurances  can be made as to the final outcome of the claims.  If
the  Company is found  liable  for the claims and is unable to obtain  insurance
coverage  therefor,  there could be a material  adverse  effect on the Company's
operations  and  financial  performance.  Based upon the current  status of this
matter, no related liability has been accrued at January 31, 2000.

        The Company is also  involved from time to time in various other routine
litigation  incident to its  operations.  Although the outcome of those  matters
cannot be predicted with certainty, management believes that any such pending or
threatened   litigation  will  not  have  a  material   adverse  effect  on  its
consolidated results of operations and financial condition.

Item 2. Changes in Securities

        Not applicable.

Item 3. Defaults upon Senior Securities

        Not applicable.

Item 4. Submission of Matters to a Vote of Security Holders

        Not applicable.

Item 5. Other Information

        Not applicable.

Item 6. Exhibits and Reports on Form 8-K

(a)      Exhibits

              Exhibit 27  Financial Data Schedule

(b)      Reports on Form 8-K


              The  Registrants  filed no reports on Form 8-K during the  quarter
ended January 31, 2000.

<PAGE>

                                   SIGNATURES

     Pursuant to the  requirements  of the Securities  Exchange Act of 1934, the
registrants  have duly caused  this  report to be signed on their  behalf by the
undersigned thereunto duly authorized.

                                                 MMH HOLDINGS, INC.

     Date:  March __, 2000                        /s/ David D. Smith
                                                 -------------------
                                                 David D. Smith
                                                 Vice President  - Finance
                                                 (Principal Financial Officer)


                                                 MORRIS MATERIAL HANDLING, INC.


     Date:  March ___, 2000                       /s/ David D. Smith
                                                 -------------------
                                                 David D. Smith
                                                 Vice President  - Finance
                                                 (Principal Financial Officer)

<PAGE>

     Exhibit
     Number        Exhibit Description


    27.1           Financial Data Schedule

    27.2           Financial Data Schedule