================================================================================





                       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 April 30, 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 (June 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.                                          31

          Item 3.  Quantitative and Qualitative Disclosures about
                   Market Risk                                             41

     PART II - OTHER INFORMATION:

          Item 1.  Legal Proceedings                                       42
          Item 2.  Changes in Securities                                   42
          Item 3.  Defaults upon  Senior  Securities                       42
          Item 4.  Submission  of  Matters to a Vote of Security Holders   42
          Item 5.  Other Information                                       42
          Item 6.  Exhibits and Reports on Form 8-K                        42

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.

                                       2

<PAGE>


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
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 only to Holdings or MMH is filed by
Holdings or MMH as the case may be, 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.  Holdings and MMH 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.


                                       3


<PAGE>


                               MMH HOLDINGS, INC.
                               ------------------
                  (DEBTORS - IN - POSSESSION AS OF MAY 17, 2000)
                  --------------------------------------------
                            CONDENSED BALANCE SHEETS
                            ------------------------
                             (DOLLARS IN THOUSANDS)
                             ----------------------


                              ASSETS
                              ------

                                        April 30,           October 31,
                                          2000                 1999
                                       -----------          -----------
                                       (Unaudited)

Current Assets
  Cash and cash equivalents             $   2,101           $   3,929
  Accounts receivable-net                  54,649              64,481
  Inventories                              39,684              39,994
  Other current assets                      9,784               7,842
                                        ---------           ---------

                                          106,218             116,246

Property, Plant and Equipment
  Land and improvements                     3,349               3,349
  Buildings                                22,762              23,235
  Machinery and equipment                  44,640              45,219
                                        ---------           ---------
                                           70,751              71,803

 Less accumulated depreciation            (32,586)            (30,829)
                                        ---------           ---------
                                           38,165              40,974
                                        ---------           ---------

Other Assets
  Goodwill                                 39,872              42,844
  Debt financing costs                     15,320              16,398
  Other                                    10,141              10,374
                                        ---------           ---------
                                           65,333              69,616
                                        ---------           ---------

                                        $ 209,716           $ 226,830
                                        =========           =========


                      LIABILITIES AND SHAREHOLDERS' EQUITY
                      ------------------------------------

                                        April 30,           October 31,
                                          2000                  1999
                                       -----------          ----------
                                       (Unaudited)

Current Liabilities
  Short-term notes payable and
    current portion of long-term
    obligations (Note 7)                $     382           $     383
  Revolving Credit Facility
    Borrowings (Note 7)                    29,990               27,925
  Term Loans (Note 7)                      48,395               52,225
  Acquisition Facility Line Borrowings
    (Note 7)                               12,094               12,430
  Senior Notes (Note 7)                   200,000              200,000
  Bank overdrafts                           1,693                1,367
  Trade accounts payable                   19,308               26,757
  Employee compensation and
     benefits                               6,244                8,020
  Advance payments and progress
    billings                               10,800                8,336
  Accrued warranties                        1,767                1,821
  Accrued interest                         11,556                1,804
  Income taxes payable                      3,923                2,205
  Other current liabilities                10,472                9,791
                                        ---------           ---------
                                          356,624              353,064
                                        ---------           ----------

Other Long-Term Obligations                 2,638                2,784
Other Long-Term Liabilities                 1,044                1,307
Minority Interest                             292                  504
                                        ---------           ----------
Commitments and Contingencies (Note 8)
Manditorily Redeemable Preferred Stock    115,239              108,245
Shareholders' Equity                     (266,121)            (239,068)
                                        ---------           ----------
                                        $ 209,716            $ 226,836
                                        =========           ==========

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

                                        4
<PAGE>


                               MMH HOLDINGS, INC.
                               ------------------
                  (DEBTORS - IN - POSSESION AS OF MAY 17, 2000)
                  ---------------------------------------------
            CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
            ---------------------------------------------------------
                                   (UNAUDITED)
                                   -----------
                             (DOLLARS IN THOUSANDS)
                             ----------------------

<TABLE>

<CAPTION>
                                                         For the Three Months                         For the Six Months
                                                            ENDED APRIL 30,                             ENDED APRIL 30,
                                                   ---------------------------------           ---------------------------------
                                                        2000               1999                    2000                 1999
                                                   -------------       -------------           -------------       -------------
<S>                                                <C>                 <C>                     <C>                 <C>
Revenues
   Equipment and Part Sales                        $      51,435       $      54,430           $     103,600       $     107,495
   Service Sales                                          14,770              17,419                  29,324              32,274
                                                   -------------       -------------           -------------       -------------
   Net Sales                                              66,205              71,849                 132,924             139,769
   Other Income - Net                                          -                  45                       -                 147
                                                   -------------       -------------           -------------       -------------

                                                          66,205              71,894                 132,924             139,916

Cost of Sales                                             50,683              54,442                 101,555             105,056

Selling, General and Administrative Expenses              21,291              19,354                  38,151              35,287
                                                   -------------       -------------           -------------       -------------

Operating Loss                                            (5,769)             (1,902)                 (6,782)               (427)

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

Interest Expense - Net                                    (7,616)             (7,523)                (15,366)            (14,431)
                                                   -------------       -------------           -------------       -------------

Loss Before Income Taxes and
   Minority Interest                                     (13,385)             (9,425)                (15,768)            (14,858)

Provision for Income Taxes                                  (247)             (3,518)                 (2,035)             (1,065)
Minority Interest                                             11                  21                      27                  27
                                                   -------------       -------------           -------------       -------------

Net Loss                                                 (13,621)            (12,922)                (17,776)            (15,896)

Foreign Currency Translation Adjustments                  (2,521)               (407)                 (2,278)             (1,377)
                                                   -------------       -------------           -------------       -------------

Comprehensive Loss                                 $     (16,142)       $    (13,329)           $    (20,054)       $    (17,273)
                                                   ==============      ==============          ==============      =============

</TABLE>

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



                                                                  5

<PAGE>



                               MMH HOLDINGS, INC.
                               ------------------
                  (DEBTORS - IN - POSSESION AS OF MAY 17, 2000)
                  ---------------------------------------------
                       CONDENSED STATEMENTS OF CASH FLOWS
                       ----------------------------------
                                   (UNAUDITED)
                                   -----------
                             (DOLLARS IN THOUSANDS)
                             ----------------------


<TABLE>
<CAPTION>

                                                                                 For the Six Months
                                                                                  ENDED APRIL 30,
                                                                         ------------------------------------
                                                                            2000                     1999
                                                                         -----------              -----------
<S>                                                                      <C>                      <C>
Operating Activities
    Net income (loss)                                                    $   (17,776)              $ (15,896)
    Add (deduct) - items not affecting cash provided by
     operating activities:
       Depreciation and amortization                                           4,563                   3,853
       Amortization of debt financing costs                                    1,174                   1,048
       Deferred income taxes - net                                                 -                      31
       Gain on sale of business                                               (6,380)                      -
       Other                                                                     (27)                    (27)
    Changes in working  capital, excluding the
     effects of  acquisition  opening balance sheets:
       Accounts receivable                                                     8,312                  19,285
       Inventories                                                            (1,498)                  1,262
       Other current assets                                                   (2,008)                 (4,063)
       Trade accounts payable and bank overdrafts                             (6,357)                 (8,125)
       Advance payments and progress billings                                  2,492                   1,016
       Accrued interest                                                        9,734                    (400)
       Other current liabilities                                                 966                  (5,389)
                                                                         -----------              -----------
Net cash used for operating activities                                        (6,805)                 (7,405)
                                                                         -----------              -----------

Investment and Other Transactions
    Fixed asset additions - net                                                 (474)                 (4,744)
    Capitalized software                                                        (997)                      -
    Acquisition of businesses - net of cash acquired                               -                  (5,070)
    Net proceeds on divestiture of business                                    9,115                       -
    Repayments of loans from senior management                                     -                      70
    Other - net                                                                 (196)                   (245)
                                                                         -----------              -----------
Net cash provided by (used for) investment and other transactions              7,448                  (9,989)
                                                                         -----------              -----------

Financing Activities
    Changes in short-term debt and notes payable                               6,840                   8,267
    Net (repayments of)/proceeds from
      Revolving Credit Facility borrowings                                    (4,775)                  8,784
    Repayment of Term Loans                                                   (3,812)                      -
    Proceeds from/(repayments of) Acquisition Facility Line borrowings          (336)                  1,235
    Repayments of long-term debt                                                 (87)                   (675)
    Payment of  fees for amendment of Credit Facility                           (226)                      -
                                                                         -----------              -----------
Net cash provided by (used for) financing activities                          (2,396)                 17,611
                                                                         -----------              -----------
Effect of Exchange Rate Changes on
 Cash and Cash Equivalents                                                       (75)                     39
                                                                         -----------             -----------
Increase (decrease) in Cash and Cash Equivalents                              (1,828)                    256
Cash and Cash Equivalents
    Beginning of Period                                                        3,929                   2,534
                                                                         -----------             -----------
    End of Period                                                        $     2,101             $     2,790
</TABLE>

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



                                                                  6
<PAGE>


                               MMH HOLDINGS, INC.
                               ------------------
                  (DEBTORS - IN - POSSESION AS OF MAY 17, 2000)
                  ---------------------------------------------
             STATEMENTS OF PREFERRED STOCK AND SHAREHOLDERS' EQUITY
             -------------------------------------------------------
                     FOR THE SIX MONTHS ENDED APRIL 30, 2000
                     ---------------------------------------
                                   (UNAUDITED)
                                   ----------
                             (DOLLARS IN THOUSANDS)
                             ----------------------
<TABLE>
<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              4,124          4,165         352           356         2,165        2,187         6,708

Issuance of non-voting common shares

Amortization of preferred stock
  discount                                              291                                                                291

Other                                                    (5)                                                                (5)

                                      ------      ---------    ----------   ---------     ---------     --------     ---------
BALANCE AT APRIL 30, 2000             72,865      $  71,894       6,102     $   6,164        36,798     $ 37,181     $ 115,239
                                      ======      =========    ========     =========     =========     =========    =========



                                            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                                                                                           (17,776)       (17,776)

Change in foreign currency
   translation                                                                       (2,278)                       (2,278)

Preferred stock dividends                                                                           (6,708)        (6,708)

Issuance of non-voting common shares  2,420

Amortization of preferred stock
  discount                                                                                            (291)          (291)

Other

                                      ------         ------     ---------         ---------      ---------      ---------
BALANCE AT APRIL 30, 2000             14,519         $    -     $(121,860)        $  (5,706)     $(138,555)     $(266,121)
                                      ======         ======     =========         =========      =========      =========


</TABLE>

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


                                                                  7

<PAGE>
                         MORRIS MATERIAL HANDLING, INC.
                         ------------------------------
                  (DEBTORS - IN POSSESSION AS OF MAY 17, 2000)
                  --------------------------------------------
                            CONDENSED BALANCE SHEETS
                            ------------------------
                             (DOLLARS IN THOUSANDS)
                             ----------------------

                              ASSETS
                              ------

                                        April 30,           October 31,
                                          2000                 1999
                                       -----------          -----------
                                       (Unaudited)

Current Assets
  Cash and cash equivalents             $   2,101           $   3,929
  Accounts receivable-net                  54,649              64,481
  Inventories                              39,684              39,994
  Other current assets                      9,784               7,842
                                        ---------           ---------

                                          106,218             116,246

Property, Plant and Equipment
  Land and improvements                     3,349               3,349
  Buildings                                22,762              23,235
  Machinery and equipment                  44,640              45,219
                                        ---------           ---------
                                           70,751              71,803

 Less accumulated depreciation            (32,586)            (30,829)
                                        ---------           ---------
                                           38,165              40,974
                                        ---------           ---------

Other Assets
  Goodwill                                 39,872              42,844
  Debt financing costs                     15,320              16,398
  Other                                    10,141              10,374
                                        ---------           ---------
                                           65,333              69,616
                                        ---------           ---------

                                        $ 209,716           $ 226,836
                                        =========           =========

                      LIABILITIES AND SHAREHOLDERS' EQUITY
                      ------------------------------------

                                          April 30,          October 31,
                                           2000                 1999
                                        -----------          ----------
                                        (Unaudited)

Current Liabilities
  Short-term notes payable and
    current portion of long-term
    obligations (Note 7)                $     382            $     383
  Revolving Credit Facility
    Borrowings (Note 7)                    29,990               27,925
    Term Loans (Note 7)                    48,395               52,225
  Acquisition Facility Line Borrowings
    (Note 7)                               12,094               12,430
  Senior Notes (Note 7)                   200,000              200,000
  Bank overdrafts                           1,693                1,367
  Trade accounts payable                   19,308               26,757
  Employee compensation and
     benefits                               6,244                8,020
  Advance payments and progress
    billings                               10,800                8,336
  Accrued warranties                        1,767                1,821
  Accrued interest                         11,556                1,804
  Income taxes payable                      3,923                2,205
  Other current liabilities                10,472                9,791
                                        ---------            ---------
                                          356,624              353,064
                                        ---------            ---------

Other Long-Term Obligations                 2,638                2,784
Other Long-Term Liabilities                 1,044                1,307
Minority Interest                             292                  504
Commitments and Contingencies (Note 8)
Shareholders' Equity                     (150,882)            (130,823)
                                        ---------            ---------
                                        $ 209,716            $ 226,836
                                        =========            =========

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

                                       8
<PAGE>


                         MORRIS MATERIAL HANDLING, INC.
                         ------------------------------
                  (DEBTORS - IN - POSSESSION AS OF MAY 17, 2000)
                  --------------------------------------------
            CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
            ---------------------------------------------------------
                                   (UNAUDITED)
                                   -----------
                             (DOLLARS IN THOUSANDS)
                             ----------------------


<TABLE>
<CAPTION>


                                             For the Three Months                 For the Six Months
                                                ENDED APRIL 30,                     ENDED APRIL 30,
                                          ---------------------------         ---------------------------
                                             2000            1999                2000            1999
                                          -----------     -----------         -----------     -----------
<S>                                       <C>             <C>                 <C>             <C>

Revenues
  Equipment and Part Sales                $    51,435     $    54,430         $   103,600     $   107,495
  Service Sales                                14,770          17,419              29,324          32,274
                                          -----------     -----------         -----------     -----------
  Net Sales                                    66,205          71,849             132,924         139,769
  Other Income - Net                                -              45                   -             147
                                          -----------     -----------         -----------     -----------

                                               66,205          71,894             132,924         139,916

Cost of Sales                                  50,683          54,442             101,555         105,056

Selling, General and Administrative
  Expenses                                     21,291          19,354              38,151          35,287
                                          -----------     -----------         -----------     -----------

Operating Loss                                 (5,769)         (1,902)             (6,782)           (427)

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

Interest Expense - Net                         (7,616)         (7,523)            (15,366)        (14,431)
                                          ----------      ----------          -----------     -----------

Loss Before Income Taxes and
  Minority Interest                           (13,385)         (9,425)            (15,768)        (14,858)

Provision for Income Taxes                       (247)         (3,518)             (2,035)         (1,065)
Minority Interest                                  11              21                  27              27
                                          -----------     -----------         -----------     -----------

Net Loss                                      (13,621)        (12,922)            (17,776)        (15,896)

Foreign Currency Translation Adjustments       (2,521)           (407)             (2,278)         (1,377)
                                          -----------     -----------         -----------     -----------

Comprehensive Loss                        $   (16,142)    $   (13,329)        $   (20,054)    $   (17,273)
                                          ===========     ===========         ===========     ===========

</TABLE>


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

                                                                  9

<PAGE>


                         MORRIS MATERIAL HANDLING, INC.
                         ------------------------------
                  (DEBTORS - IN - POSSESION AS OF MAY 17, 2000)
                  ---------------------------------------------
                       CONDENSED STATEMENTS OF CASH FLOWS
                       ----------------------------------
                                   (UNAUDITED)
                                   -----------
                             (DOLLARS IN THOUSANDS)
                             ----------------------


<TABLE>
<CAPTION>

                                                                                 For the Six Months
                                                                                  ENDED APRIL 30,
                                                                         ------------------------------------
                                                                            2000                     1999
                                                                         -----------              -----------
<S>                                                                      <C>                      <C>
Operating Activities
    Net income (loss)                                                    $  (17,776)              $  (15,896)
    Add (deduct) - items not affecting cash provided by
     operating activities:
       Depreciation and amortization                                          4,563                   3,853
       Amortization of debt financing costs                                   1,174                   1,048
       Deferred income taxes - net                                                -                      31
       Gain on sale of business                                              (6,380)                      -
       Other                                                                    (27)                    (27)
    Changes in working  capital, excluding the
     effects of  acquisition  opening balance sheets:
       Accounts receivable                                                    8,312                   19,285
       Inventories                                                           (1,498)                   1,262
       Other current assets                                                  (2,008)                  (4,063)
       Trade accounts payable and bank overdrafts                            (6,357)                  (8,125)
       Advance payments and progress billings                                 2,492                    1,016
       Accrued interest                                                       9,734                     (400)
       Other current liabilities                                                966                   (5,389)
                                                                        -----------              -----------
Net cash used for operating activities                                       (6,805)                  (7,405)
                                                                        -----------              -----------

Investment and Other Transactions
    Fixed asset additions - net                                                (474)                  (4,744)
    Capitalized software                                                       (997)                       -
    Acquisition of businesses - net of cash acquired                              -                   (5,070)
    Net proceeds on divestiture of business                                   9,115                        -
    Repayments of loans from senior management                                    -                       70
    Other - net                                                                (196)                    (245)
                                                                        -----------              -----------
Net cash provided by (used for) investment and other transactions             7,448                   (9,989)
                                                                        -----------              -----------

Financing Activities
    Changes in short-term debt and notes payable                              6,840                    8,267
    Net (repayments of)/proceeds from
      Revolving Credit Facility borrowings                                   (4,775)                   8,784
    Repayment of Term Loans                                                  (3,812)                       -
    Proceeds from/(repayments of) Acquisition Facility Line borrowings         (336)                   1,235
    Repayments of long-term debt                                                (87)                    (675)
    Payment of  fees for amendment of Credit Facility                          (226)                       -
                                                                        -----------              -----------
Net cash provided by (used for) financing activities                         (2,396)                  17,611
                                                                        -----------              -----------
Effect of Exchange Rate Changes on
 Cash and Cash Equivalents                                                      (75)                      39
                                                                        -----------              -----------
Increase (decrease) in Cash and Cash Equivalents                             (1,828)                     256
Cash and Cash Equivalents
    Beginning of Period                                                       3,929                    2,534
                                                                        -----------              -----------
    End of Period                                                       $     2,101              $     2,790

</TABLE>

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

                                                                 10



<PAGE>




                         MORRIS MATERIAL HANDLING, INC.
                         ------------------------------
                 (DEBTORS - IN - POSSESSION AS OF MAY 17, 2000)
                 ----------------------------------------------
                       STATEMENTS OF SHAREHOLDER'S EQUITY
                       ----------------------------------
                     FOR THE SIX MONTHS ENDED APRIL 30, 2000
                     ---------------------------------------
                                   (UNAUDITED)
                                   -----------
                             (DOLLARS IN THOUSANDS)
                             ----------------------


<TABLE>
<CAPTION>

                                            COMMON STOCK           Parent           Accumulated
                                        --------------------      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>
BALANCE AT OCTOBER 31, 1999                 100        $   -       $ (33,392)         $  (3,428)    $ (94,003)         $(130,823)

Net loss                                                                                              (17,776)           (17,776)

Change in foreign currency
   translation                                                                           (2,278)                          (2,278)

Other                                                                                                      (5)                (5)


BALANCE AT APRIL 30, 2000                   100        $   -       $ (33,392)        $  (5,706)     $(111,784)          $(150,882)
                                          =====        =====       ==========        ==========     ==========          ==========


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


</TABLE>

                                                                 11

<PAGE>


                               MMH HOLDINGS, INC.
                               ------------------
                         MORRIS MATERIAL HANDLING, INC.
                         ------------------------------
                  (DEBTORS- IN - POSSESSION AS OF MAY 17, 2000)
                  ---------------------------------------------
                          NOTES TO FINANCIAL STATEMENTS
                          -----------------------------
                                    UNAUDITED
                                    ---------


(DOLLAR AMOUNTS IN THOUSANDS UNLESS INDICATED)

NOTE 1 - REORGANIZATION UNDER CHAPTER 11
----------------------------------------

On May 17, 2000,  MMH Holdings,  Inc.  ("Holdings")  and its domestic  operating
subsidiaries  (collectively,   the  "Debtors")  filed  voluntary  petitions  for
reorganization  under Chapter 11 of the U.S.  Bankruptcy  Code (the  "Bankruptcy
Code") in the United States  Bankruptcy  Court for the District of Delaware (the
"Bankruptcy  Court").  The Debtors' Chapter 11 cases have been  consolidated for
the purpose of joint administration under case number 00-2027(SLR).  The Debtors
are currently  operating their businesses as  debtors-in-possession  pursuant to
the Bankruptcy Code. Pursuant to the Bankruptcy Code, actions to collect certain
prepetition  indebtedness  of the  Debtors  and other  obligations  against  the
Debtors may not be  enforced.  These  claims  will be  reflected  in  subsequent
filings  in the  balance  sheet  as  "liabilities  subject  to  compromise".  In
addition,  under the Bankruptcy Code, the Debtors may assume or reject executory
contracts,  including  leases.  Additional claims may arise from such rejection,
and from the  determination  by the court (or agreed by the parties in interest)
to allow claims for  contingencies  and other  disputed  amounts.  However,  the
Debtors have not yet completed their review of all their  prepetition  executory
contracts and leases for assumption or rejection.  See also Note 7, Indebtedness
and Note 12, Subsequent Events.

The Debtors  received  approval  from the  Bankruptcy  Court to pay or otherwise
honor certain of their  prepetition  obligations,  including  employee wages and
obligations to their customers. In addition, the Bankruptcy Court authorized the
Debtors to maintain their employee benefit programs.

NOTE 2 - 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 3, 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,  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.

The accompanying consolidated interim financial statements have been prepared on
a going concern basis, which contemplates continuity of operations,  realization
of assets and  liquidation of liabilities in the ordinary course of business and
do not reflect any  adjustments  that might  result if the Debtors are unable to
continue as a going  concern.  As a result of the  Debtors'  Chapter 11 filings,
however,  such  matters are subject to  significant  uncertainty,  although  the
Debtors  intend  to file a plan of  reorganization  with the  Bankruptcy  Court.
Continuing on a going concern basis is dependent upon,  among other things,  the
Debtors'  formulation of an acceptable  plan of  reorganization,  the success of
future  business  operations,   and  the  generation  of  sufficient  cash  from
operations  and  financing  sources  to  meet  the  Debtors'  obligations.   The
accompanying  consolidated  interim financial statements do not reflect: (i) the
realizable  value of  assets on a  liquidation  basis or their  availability  to
satisfy

                                       12
<PAGE>

liabilities,  (ii) aggregate  prepetition  liability amounts that may be allowed
for claims or  contingencies,  or their status or priority,  (iii) the effect of
any  changes to the  Debtors'  capital  structure  or in the  Debtors'  business
operations  as the  result  of an  approved  plan  of  reorganization;  or  (iv)
adjustments  to the carrying  value of assets or  liability  amounts that may be
necessary  as the result of  actions by the  Bankruptcy  Court.  Further,  while
management   believes  that  no  impairment  of  recorded  goodwill  or  related
long-lived  assets  exists at April 30, 2000,  based upon  current  estimates of
future  nondiscounted cash flows excluding interest,  assesssment of recoverable
amounts  could  decrease  materially  in the near  term if  estimates  of future
operating cash flows are reduced.

These  consolidated  interim 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 and six months ended April
30, 2000 are not,  however,  necessarily  indicative of the results which may be
expected for fiscal 2000.

NOTE 3 - 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
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  (the "Note  Offering")  $200  million  of  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") (see
Note 7). 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 $55 million in term loans. 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  redemption  and
dividend 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  was 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 April 30, 2000, MHE Investments owned approximately 54.5% of the common stock
of Holdings  and $36.8  million  liquidation  preference  of the Series C Junior
Voting Preferred Stock and HarnCo owned  approximately 15.6% of the common stock
of  Holdings  and $6.1  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 $72.9  million  liquidation  preference  of the Series A Senior
Preferred Stock.

NOTE 4 - LIQUIDITY AND CAPITAL RESOURCES
----------------------------------------

The Company did not meet certain financial covenants contained in the New Credit
Facility for the quarter ended April 30, 2000 and  anticipates  that it will not
meet them in the foreseeable future. The Company entered into several Amendments
and Waivers under the New Credit Facility,  dated as of January 31, 2000 through
April 28, 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. May 26, 2000 (the "Waivers"). The Waivers permitted the Company,
subject to certain conditions, to make additional

                                       13
<PAGE>

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 $12.4 million, during the period as to which the Waivers apply.

On May  17,  2000,  Holdings  and  its  domestic  operating  subsidiaries  filed
voluntary  petitions for reorganization  under Chapter 11 of the U.S. Bankruptcy
Code.  See Note 1,  Reorganization  under  Chapter  11 and  Note 12,  Subsequent
Events.  On May 18, 2000, the Bankruptcy  Court entered an order approving $10.0
million in interim debtor-in-possession financing to the Debtors and authorizing
the Debtors to utilize their  collections  in the  operation of their  business.
This $10 million amount  represented  the initial  portion under a commitment by
the lenders to provide $35 million in  financing  (including  a letter of credit
facility) in connection with the Debtors' Chapter 11 cases. The full $35 million
facility  was  approved  by the  Bankruptcy  Court  on June 15,  2000.  This new
facility has an initial maturity date of December 1, 2000, which date,  absent a
default,  shall be  automatically  extendable  to June 1,  2001 if a sale of the
Debtors shall not have been consummated prior to December 1, 2000.

The Company  believes that the filing  provides the Debtors with the opportunity
to restructure its indebtedness.  The Company plans to continue to implement its
cost  savings  initiatives  to bring  costs in line  with  market  requirements.
Although no material  adverse  effects  have  occurred  to date,  disruption  of
operations relating to the Chapter 11 reorganization  could adversely affect the
Debtors' relationships with their creditors, customers, suppliers or employees.

As of the end of second  quarter of 2000,  the  Company  had  $306.7  million of
indebtedness outstanding,  including $90.9 million under the New Credit Facility
(including  accrued  interest) and $211.1 million  evidenced by the Senior Notes
(including accrued interest).

The Company is currently seeking, and is engaged in discussions  regarding,  its
strategic  alternatives.  The Company has engaged in  discussions  with its bank
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 5 - ACQUISITIONS
---------------------

During  the six  months  ended  April 30,  2000,  the  Company  did not make any
acquisitions.  During the six months ended April 30, 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 six months ended April 30, 1999,  the Company made final  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 $1.4 million in the six months ended April 30, 1999. Additionally,  a
payment of $100 was made in each of the six month  periods  ended April 30, 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 six months  ended  April 30,  1999 and
accordingly, such information is not presented.

                                       14
<PAGE>


NOTE 6 - INVENTORIES

Inventories consisted of the following:

                                          April 30,       October  31,
                                            2000             1999
                                          ---------------------------
      Raw material                         $ 5,370          $ 8,771
      Work-in-process                       21,678           20,166
      Finished parts                        18,995           18,116
                                          ---------------------------
                                            46,043           47,053
      Less excess of current cost over
      stated LIFO value                     (6,359)          (7,059)
                                          ---------------------------
                                           $39,684          $39,994
                                          ===========================


NOTE 7 - INDEBTEDNESS
---------------------

On   June   15,   2000,   the   Bankruptcy   Court   approved   a  $35   million
Debtor-in-Possession   facility  and   authorized   the  Debtors  to  use  their
collections in the  operations of their  business.  The new facility  contains a
number of covenants  that,  among other  things,  limit the Debtors'  ability to
create or assume liens, consolidate or merge with other entities, create, incur,
or assume  additional  indebtedness,  dispose of certain assets and make capital
expenditures.  The new facility also requires the Debtors to comply with certain
financial ratios and borrowing condition tests based on monthly  measurements of
the latest twelve months results of operations.

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. 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 4, the Company was in  violation of its amended  financial
covenants  under the New Credit  Facility as of April 30, 2000, and  anticipated
being in violation of those covenants at subsequent quarterly  measurement dates
during fiscal 2000. Accordingly,  amounts outstanding at April 30, 2000 of $78.9
million under the New Credit Facility and $200 million of Senior Notes have been
classified as current liabilities in the accompanying balance sheets.

NOTE 8 - 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
April 30,  2000:  (i) $4.5 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) $4.3 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 April 30,
2000,  approximately  $11.6  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  then   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.

                                    15

<PAGE>
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  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.

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  April  30,  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  therefore,  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 April 30, 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.
                                       16
<PAGE>


As  a  result  of  the  Company's   bankruptcy   filing  described  in  Note  1,
Reorganization  under  Chapter  11,  litigation  against  the  Company  and  its
subsidiaries which filed bankruptcy is stayed.

NOTE 9 - 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 second 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
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.

                                       17
<PAGE>


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 the First and Second Quarters of fiscal
year 2000,  however,  in the First and Second  Quarters of fiscal year 1999,  no
allocation was done.


                                       18
<PAGE>




                               MMH HOLDINGS, INC.
                         MORRIS MATERIAL HANDLING, INC.
                               Operating Segments
                     For the Six Months Ended April 30, 2000

<TABLE>
<CAPTION>
                                                  ------------------------------------------
                                                                     SALES
                                                  ------------------------------------------  ----------------
                                                                                              Operating Income
                                                                                                   (Loss)
                                                    External     Intercompany       Total
                                                  -----------    ------------     ----------  ----------------
<S>                                                 <C>            <C>              <C>               <C>
       Equipment & Aftermarket - Americas             $17,317         $24,324        $41,641              $493
          Equipment & Aftermarket - Other                 423             111            534                (4)
                                                  -----------    ------------     ----------  ----------------
            Total Equipment & Aftermarket              17,740          24,435         42,175               489
   Distribution & Service - North America              84,885             333         85,218             4,799
                     Eliminations & Other                   0         (24,768)       (24,768)              105
                                                  -----------    ------------     ----------  ----------------
                           Total Americas             102,625               0        102,625             5,393
                                                  -----------    ------------     ----------  ----------------

Engineered Products & Automation - Europe               4,067               5          4,072            (1,488)
         Equipment & Aftermarket - Europe              14,914           2,825         17,739              (425)
                     Eliminations & Other                   0            (439)          (439)           (1,064)
                                                  -----------    ------------     ----------  ----------------
                             Total Europe              18,981           2,391         21,372            (2,977)
    Equipment & Aftermarket - South Africa              4,652               0          4,652              (334)
   Equipment & Aftermarket - Asia Pacific               6,666               0          6,666              (452)
                     Eliminations & Other                   0            (527)          (527)             (929)
                                                  -----------    ------------     ----------  ----------------
                      Total International              30,299           1,864         32,163            (4,692)
                                                  -----------    ------------     ----------  ----------------
               Corporate and Eliminations                   0          (1,864)        (1,864)           (7,483)
                                                  -----------    ------------     ----------  ----------------

                             Consolidated            $132,924       $       -       $132,924           $(6,782)
                                                  ===========    ============     ==========  ================
</TABLE>



                                                                 19

<PAGE>




                                  MMH HOLDINGS, INC.
                            MORRIS MATERIAL HANDLING, INC.
                    (Debtors - in - Possession as of May 17, 2000)
                                  Operating Segments
                       For the Three Months Ended April 30, 2000
<TABLE>
<CAPTION>

                             ------------------------------------------
                                               SALES
                             ------------------------------------------  --------------
                                                                           Operating
                                                                         Income (Loss)
                              External      Intercompany       Total
                             -----------    ------------     ----------  --------------
<S>                            <C>           <C>              <C>             <C>

  Equipment & Aftermarket -      $6,121         $13,816        $19,937          $(507)
  Equipment & Aftermarket -           -               -              -              -
                      Other
                             ----------    ------------     ----------  --------------
          Total Equipment &       6,121          13,816         19,937           (507)
                Aftermarket
   Distribution & Service -
                     Europe
                                 44,461             176         44,637          2,916
       Eliminations & Other           0         (13,992)       (13,992)           222
                             ----------    ------------     ----------  --------------
             Total Americas      50,582               0         50,582          2,631
                             ----------    ------------     ----------  --------------

      Engineered Products &       1,997             (12)         1,985         (1,665)
        Automation - Europe
  Equipment & Aftermarket -
                     Europe       7,977           1,537          9,514            362
       Eliminations & Other           0            (233)          (233)          (867)
                             ----------    ------------     ----------  --------------
               Total Europe       9,974           1,292         11,266         (2,170)
  Equipment & Aftermarket -
               South Africa       2,409               0          2,409           (243)
  Equipment & Aftermarket -
               Asia Pacific       3,240               0          3,240           (116)
       Eliminations & Other           0            (336)          (336)          (458)
                             ----------    ------------     ----------  --------------
        Total International      15,623             956         16,579         (2,987)
                             ----------    ------------     ----------  --------------
 Corporate and Eliminations           0            (956)          (956)        (5,413)
                             ----------    ------------     ----------  --------------

               Consolidated     $66,205       $       -        $66,205        $(5,769)
                             ==========    ============     ==========  ==============
</TABLE>


                                                                 20

<PAGE>



                                                    MMH HOLDINGS, INC.
                                          MORRIS MATERIAL HANDLING, INC.
                               (Debtors - in - Possession as of May 17, 2000)
                                                 Operating Segments
                                    For the Six Months Ended April 30, 1999
<TABLE>
<CAPTION>

                                  ------------------------------------------
                                                       SALES
                                  ------------------------------------------  --------------
                                                                                          Operating
                                                                                         Income (Loss)
                                             External      Intercompany       Total
                                            -----------    ------------     ----------  --------------
<S>                                            <C>             <C>            <C>              <C>

      Equipment & Aftermarket - Americas       $25,655         $25,065        $50,720          $2,030
         Equipment & Aftermarket - Other         2,117             709          2,826             778
                                              ----------    ------------     ----------  --------------
           Total Equipment & Aftermarket        27,772          25,774         53,546           2,808
  Distribution & Service - North America        76,158           2,290         78,448           4,257
                    Eliminations & Other             0         (28,064)       (28,064)            117
                                            ----------    ------------     ----------  --------------
                          Total Americ         103,930               0        103,930           7,182
                                            ----------    ------------     ----------  --------------
Engineered Products & Automation - Europe        4,986             407          5,393          (1,255)
                      Automation - Europe
         Equipment & Aftermarket - Europe       17,335           3,158         20,493             361
                     Eliminations & Other            0            (939)          (939)         (1,615)
                                            ----------    ------------     ----------  --------------
                             Total Europe       22,321           2,626         24,947          (2,509)
   Equipment & Aftermarket - South Africa        7,178               0          7,178             224
 Equipment & Aftermarket - Asia & Pacific        6,340               0          6,340            (221)
                     Eliminations & Other            0            (713)          (713)           (236)
                                            ----------    ------------     ----------  --------------
                      Total International       35,839           1,913         37,752          (2,742)
                                            ----------    ------------     ----------  --------------
               Corporate and Eliminations            0          (1,913)        (1,913)         (4,867)
                                            ----------    ------------     ----------  --------------

                             Consolidated     $139,769       $       -       $139,769           $(427)
                                            ==========    ============     ==========  ==============
</TABLE>


                                                                 21
<PAGE>



                                              MMH HOLDINGS, INC.
                                         MORRIS MATERIAL HANDLING, INC.
                               (Debtors - in - Possession as of May 17, 2000)
                                               Operating Segments
                                   For the Three Months Ended April 30, 1999
<TABLE>
<CAPTION>

                                            ------------------------------------------
                                               SALES
                                            ------------------------------------------  --------------
                                                                           Operating
                                                                         Income (Loss)
                                             External      Intercompany       Total
                                            -----------    ------------     ----------  --------------
<S>                                          <C>            <C>             <C>              <C>

       Equipment & Aftermarket - Americas    $13,013         $14,495        $27,508          $1,050
          Equipment & Aftermarket - Other      1,159             464          1,623             387
                                            -----------    ------------     ----------  --------------
            Total Equipment & Aftermarket     14,172          14,959         29,131           1,437
   Distribution & Service - North America     40,532           1,114         41,646           1,971
                     Eliminations & Other          0         (16,073)       (16,073)             19
                                            -----------    ------------     ----------  --------------
                           Total Americas     54,704               0         54,704           3,427
                                            -----------    ------------     ----------  --------------

Engineered Products & Automation - Europe      1,021             285          1,306          (1,251)
         Equipment & Aftermarket - Europe      9,074           2,021         11,095             (48)
                     Eliminations & Other          0            (732)          (732)           (975)
                                            -----------    ------------     ----------  --------------
                             Total Europe     10,095           1,574         11,669          (2,274)
   Equipment & Aftermarket - South Africa      3,770               0          3,770             121
   Equipment & Aftermarket - Asia Pacific      3,280               0          3,280            (230)
                     Eliminations & Other          0            (428)          (428)           (121)
                                            -----------    ------------     ----------  --------------
                      Total International     17,145           1,146         18,291          (2,504)
                                            -----------    ------------     ----------  --------------
               Corporate and Eliminations          0          (1,146)        (1,146)         (2,825)
                                            -----------    ------------     ----------  --------------

                             Consolidated     $71,849        $     -        $71,849         $(1,902)
                                            ===========    ============     ==========  ==============

</TABLE>


                                       22
<PAGE>



NOTE 10 - 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 11 - 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.


                                        23


                                     <PAGE>

                               MMH HOLDINGS, INC.
                 (Debtors - in - Possession as of May 17, 2000)
               SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEET
                                 APRIL 30, 2000
                                   (UNAUDITED)
                             (Dollars in Thousands)
<TABLE>
<CAPTION>
                                                                                       Consolidated
                                               Non         Morris                       Morris            MMH
                               Guarantor    Guarantor      Material                      Material       Holdings.
                             Subsidiaries  Subsidiaries  Handling, Inc.  Eliminations  Handling, Inc.     Inc.      Eliminations
                             ------------  ------------  --------------  ------------  ---------------  ---------   ------------
<S>                             <C>            <C>          <C>             <C>           <C>             <C>            <C>

ASSETS
  Current Assets
     Cash and cash
       equivalents              $  1,699         402       $    -         $    -         $   2,101       $     -      $      -
     Accounts receivable -
       net                        51,121       3,528             -             -            54,649             -              -
     Intercompany accounts
       receivable                 26,070         (20)        18,738        (44,788)            -               -              -
     Inventories                  37,648       2,036             -             -            39,684             -              -
     Other current assets          8,731         503            550            -             9,784             -              -
                               ---------     --------      --------       ---------       --------       --------    ----------
                                 125,269       6,449         19,288        (44,788)        106,218             -              -
                               ---------     --------      --------       ---------       --------       --------    ----------
  Property, Plant and
     Equipment - net              35,665       2,500            -              -            38,165             -              -
                               ---------     --------      --------       ---------       --------       --------    ----------

Other Assets
  Goodwill                        37,169       2,703            -              -            39,872             -            -
  Debt financing costs              -            -           15,320            -            15,320             -            -
  Noncurrent intercompany
     receivable                    4,904         -           80,118        (85,022)             -              -            -
  Investment in affiliates        (1,900)        -           55,310        (53,410)             -        (150,882)     150,882
  Deferred income taxes             -            -              -              -                -              -            -
  Other                            9,415         -              726            -            10,141             -            -
                               ---------    ---------     ---------     -----------      ---------      ----------   ----------
                                  49,588       2,703        151,474       (138,432)         65,333       (150,882)     150,882
                               ---------    ---------     ---------     -----------      ---------      ----------   ---------
                                $210,522     $11,652       $170,762      $(183,220)       $209,716      $(150,882)    $150,882
                               =========    =========     =========     ===========      =========      ==========   ==========

LIABILITIES AND SHAREHOLDERS EQUITY
Current Liabilities

  Current portion of long-
     term obligations                343          39       $   -          $    -          $    382       $    -      $     -
  New Credit Facility
     borrowings                    7,265         -           22,725            -            29,990
  Term loans                        -            -           48,395            -            48,395
  Aquisition Facility               -                        12,094            -            12,094
  Senior Notes                      -            -          200,000            -           200,000
  Bank overdrafts                    412       1,281            -              -             1,693            -            -
  Trade accounts payable          17,852       1,456            -              -            19,308            -            -
  Intercompany accounts
     payable                      18,718       3,966         22,104        (44,788)            -              -            -
  Advance payments and
     progress billings            10,800         -              -              -            10,800            -            -
  Accrued warranties               1,767         -              -              -             1,767            -            -
  Accrued interest                    26         -           11,530            -            11,556            -            -
  Other current liabilities       14,994       1,051          4,594            -            20,639            -            -
                                --------     --------     ---------     -----------       --------      ----------   ----------
                                  72,177       7,793        321,442        (44,788)        356,624            -            -
                                --------     --------     ---------     -----------       --------      ----------   ----------
Other Term Debt                    2,075         563            -              -             2,638            -            -
Noncurrent Intercompany
  Payable                         80,118       4,904            -          (85,022)            -              -            -
Deferred Income Taxes               -            -              -              -               -              -            -
Other Long Term Liabilities          842         -              202            -             1,044            -            -
                                --------     --------     ---------     -----------       --------      ----------   ----------
                                 155,212      13,260        321,644       (129,810)        360,306            -            -

Minority Interest                   (206)         -              -             498             292            -            -
Manditorily Redeemable
  Preferred Stock                   -             -              -              -              -          115,239
Shareholders' Equity              55,516      (1,608)      (150,882)       (53,908)       (150,882)      (266,121)    150,882
                                --------     --------     ---------     -----------      ---------      ----------   ----------
                                $210,522     $11,652       $170,762      $(183,220)       $209,716      $(150,882)   $150,882
                                ========     ========     =========     ===========      =========      ==========   ==========
</TABLE>


                                             Consolidated
                                                 MMH
                                            Holdings, Inc.
                                            --------------

ASSETS
  Current Assets
     Cash and cash
       equivalents                            $   2,101
     Accounts receivabable -
       net                                       54,649
     Intercompany accounts
       receivable                                   -
     Inventories                                 39,684
     Other current assets                         9,784
                                             ----------
                                                106,218
                                             ----------
  Property, Plant and Equipment -  net           38,165
                                             ----------
  Other Assets:
    Goodwill                                     39,872
    Debt financing costs                         15,320
    Noncurrent intercompany receivable              -
    Investment in affiliates                        -
    Deferred income taxes                           -
    Other                                        10,141
                                            -----------
                                                 65,333
                                            -----------
                                               $209,716
                                            ===========

LIABILITIES AND SHAREHOLDERS' EQUITY
  Current Liabilities

  Current portion of long-
     term obligations                           $   382
  New Credit Facility
     borrowings                                  29,990
  Term loans                                     48,395
  Aquisition Facility                            12,094
  Senior Notes                                  200,000
  Bank overdrafts                                 1,693
  Trade accounts payable                         19,308
  Intercompany accounts
     payable                                        -
  Advance payments and
     progress billings                           10,800
  Accrued warranties                              1,767
  Accrued interest                               11,556
  Other current liabilities                      20,639
                                             ----------
                                                356,624
                                             ----------

Other Term Debt                                   2,638
Noncurrent Intercompany
  Payable                                           -
Deferred Income Taxes                               -
Other Long-Term Liabilities                       1,044
                                             ----------
                                                360,306

Minority Interest                                   292
Manditorily Redeemable Preferred Stock          115,239
Shareholders' Equity                           (266,121)
                                             ----------
                                             $  209,716
                                             ==========


                                       24

<PAGE>

                                           MMH HOLDINGS, INC.
                            (Debtors - in - Possession as of May 17, 2000)
                         SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEET
                                            OCTOBER 31, 1999
                                         (Dollars in Thousands)
<TABLE>
<CAPTION>

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

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

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

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

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

</TABLE>
                                                            Consolidated
                                                               MMH
                                            Eliminations    Holdings, Inc.
                                            -----------    --------------


ASSETS
Current Assets                               $    --       $   3,929
  Cash and cash equivalents                       --          64,481
  Accounts receivable - net                       --            --
  Intercompany accounts receivable                --          39,994
  Inventories                                     --           7,842
  Other current assets                       ---------     ---------
                                                  --         116,246
                                             ---------     ---------
                                                  --          40,974
Property, Plant and Equipment                ---------     ---------


Other Assets                                      --          42,844
  Goodwill                                        --          16,398
  Debt financing costs                            --            --
  Noncurrent intercompany receivable           130,823          --
  Investment in affiliates                        --            --
  Deferred income taxes                           --          10,374
  Other                                      ---------     ---------
                                               130,823        69,616
                                             ---------     ---------
                                             $ 130,823     $ 226,836
                                             =========     =========

LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
  Current portion of long-term oligations
  New Credit Facility borrowings             $    --       $     383
  Term loans                                      --          27,925
  Acquisition Facility Line borrowings            --          52,225
  Senior notes                                    --          12,430
  Bank overdrafts                                 --         200,000
  Trade accounts payable                          --           1,367
  Intercompany accounts payable                   --          26,757
  Advance payments and progress billings          --            --
  Accrued warranties                              --           8,336
  Accrued interest                                --           1,821
  Other current liabilities                       --           1,804
                                                  --          20,016
                                             ---------     ---------
                                                  --         353,064
                                             ---------     ---------
Other Long-Term Debt
Noncurrent intercompany payable                   --           2,784
Other Long-Term Liabilities                       --            --
                                                  --           1,307
Minority Interest
Manditorily Redeemable Preferred Stock            --             504
Stockholders' Equity                              --         108,245
                                               130,823      (239,068)
                                             ---------     ---------
                                             $ 130,823    $ (226,836)
                                             =========     =========





                                                                 25
<PAGE>

                                          MMH HOLDINGS, INC.
                          (Debtors - in - Possession as of May 17, 2000)
                SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
                              FOR THE SIX MONTHS ENDED APRIL 30, 2000
                                              (UNAUDITED)
                                         (Dollars in Thousands)
<TABLE>
<CAPTION>

                                                                                                     Consolidated
                                                           Non        Morris                            Morris
                                          Guarantor     Guarantor     Material                         Material        MMH
                                          Subsidiaries  Subsidiaries  Handling, Inc.   Eliminations  Handling, Inc.  Holdings, Inc.
                                          ------------  ------------  --------------   ------------  --------------  --------------
<S>                                         <C>           <C>          <C>               <C>           <C>                 <C>
Revenues
   Net Sale                                   127,152       6,297          -                 (525)        132,924             -
   Other Income - net                             -           -            -                 -                -               -
                                             --------   ---------     ---------        -----------     -----------      -----------
                                              127,152       6,297          -                 (525)        132,924             -
Cost of Sales                                  97,261       4,819          -                 (525)        101,555             -
Selling, General
 and Administrative expenses                   34,761       1,817        1,573               -             38,151             -
                                             --------   ---------     ---------        -----------     -----------      -----------
Operating Income                               (4,870)       (339)      (1,573)              -             (6,782)            -
Gain on sale of business                          -           -          6,380               -              6,380             -
Interest Expense - Net
   Affiliates                                  (2,978)       (177)       3,155               -                -               -
   Third party                                   (270)       (135)     (14,961)              -            (15,366)            -
                                             --------   ---------     ---------        -----------     -----------      -----------

Loss Before Income Taxes, Equity
in Earnings (Loss of Subsidiaries and
Minority Interest                              (8,118)       (651)      (6,999)              -            (15,768)            -
Benefit (Provision) for Income Taxes             (552)        (83)      (1,400)              -             (2,035)            -
Equity in Earnings (Loss) of Subsidiaries        (707)        -         (9,377)            10,084             -            (17,776)
Minority Interest                                 -           -            -                   27              27             -
                                             --------   ---------     ---------        -----------     -----------      -----------
Net Income (Loss)                            $ (9,377)  $    (734)    $ (17,776)       $    10,111     $   (17,776)        (17,776)
                                             ========   =========     =========        ===========     ===========      ===========

</TABLE>

                                                        Consolidated
                                                             MMH
                                          Eliminations  Holdings, Inc.
                                          -----------   --------------

Revenues
   Net Sales                                      -         132,924
   Other Income - net                             -             -
                                             --------     ---------
                                                  -         132,924
Cost of Sales                                     -         101,555
Selling, General
 and Administrative expenses                      -          38,151
                                             --------     ---------
Operating Income                                  -          (6,782)
Gain on sale of business                          -           6,380
Interest Expense - Net
   Affiliates                                     -             -
   Third party                                    -         (15,366)
                                             --------     ---------

Loss Before Income Taxes, Equity
in Earnings (Loss of Subsidiaries and
Minority Interest                                 -         (15,768)
Benefit (Provision) for Income Taxes              -          (2,035)
Equity in Earnings (Loss) of Subsidiaries      17,776           -
Minority Interest                                 -              27
                                             --------     ---------
Net Income (Loss)                            $ 17,776     $ (17,776)
                                             ========     =========

                                       26
<PAGE>

                     FOR THE THREE MONTHS ENDED APRIL 30, 2000

                                 MMH HOLDINGS, INC.
                  (Debtors - in - Possession as of May 17, 2000)
                SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEET
                                   OCTOBER 31, 1999
                                 (Dollars in Thousands)
<TABLE>
<CAPTION>

                                                           Non        Morris                         Consolidated
                                          Guarantor     Guarantor    Material                        Morris Material        MMH
                                          Subsidiaries  Subsidiaries Handling, Inc.   Eliminations   Handling, Inc.   Holdings, Inc.
                                          ------------  ------------ --------------   ------------   --------------   --------------
<S>                                        <C>           <C>          <C>              <C>            <C>               <C>
Revenues
   Net Sales                                   63,298         3,240        -                 (333)         66,205              -
   Other Income - net                             -             -          -                  -               -                -
                                             --------     ---------    ---------      -----------     -----------      -----------
                                               63,298         3,240        -                 (333)         66,205              -
Cost of Sales                                  42,421         2,595        -                 (333)         50,683              -
Selling, General
 and Administrative expenses                   19,603           912        776                -            21,291              -
                                             --------     ---------    ---------      -----------     -----------      -----------
Operating Income                               (4,726)         (267)      (776)               -            (5,769)             -
Gain on sale of business                          -             -          -                  -               -                -
Interest Expense - Net
   Affiliates                                  (1,343)          (87)     1,430                -               -                -
   Third party                                   (208)          (61)    (7,347)               -            (7,616)             -
                                             --------     ---------    ---------      -----------     -----------      -----------

Loss Before Income Taxes, Equity
in Earnings (Loss of Subsidiaries and
Minority Interest                              (6,277)         (415)    (6,693)               -           (13,385)             -
Benefit (Provision) for Income Taxes             (247)          -          -                  -              (247)             -
Equity in Earnings (Loss) of Subsidiaries        (404)          -       (6,928)             7,332             -            (13,621)
Minority Interest                                 -             -          -                   11              11              -
                                             --------     ---------    ---------      -----------     -----------      -----------
Net Income (Loss)                            $ (6,928)    $    (415)   $ (13,621)     $     7,343     $   (13,621)     $   (13,621)
                                             ========     =========    =========      ===========     ===========      ===========



                                                        Consolidated
                                                             MMH
                                          Eliminations  Holdings, Inc.
                                          -----------   --------------

Revenues
   Net Sales                                     -             66,205
   Other Income - net                            -                -
                                            --------      -----------
Cost of Sales                                    -             66,205
Selling, General                                 -             50,683
 and Administrative expenses
Operating Income                                 -             21,291
Gain on sale of business                    --------      -----------
Interest Expense - Net                           -             (5,769)
   Affiliates                                    -                -
   Third party
                                                 -                -
Loss Before Income Taxes, Equity                 -             (7,616)
in Earnings (Loss of Subsidiaries and       --------      -----------
Minority Interest
Benefit (Provision) for Income Taxes
Equity in Earnings (Loss) of Subsidiaries
Minority Interest                                -            (13,385)
Net Income (Loss)                                -               (247)
                                              13,621              -
                                                 -                 11
                                            --------      -----------
                                              13,621      $   (13,621)
                                            ========      ===========


</TABLE>

                                       26
<PAGE>



                               MMH HOLDINGS, INC.
          SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
                                   (UNAUDITED)
                             (Dollars in Thousands)
                     FOR THE SIX MONTHS ENDED APRIL 30, 2000

<TABLE>
<CAPTION>

                                                             Non        Morris                        Consolidated
                                            Guarantor     Guarantor     Material                       Morris Material        MMH
                                          Subsidiaries  Subsidiaries  Handling, Inc.  Eliminations   Handling, Inc.   Holdings, Inc.
                                          ------------  ------------ --------------   ------------   --------------   --------------
<S>                                          <C>        <C>          <C>              <C>             <C>              <C>
Revenues
   Net Sale                                  $131,714   $   8,407    $     -          $      (352)    $   139,769      $      -
   Other Income - net                             147         -            -                 -                147             -
                                             --------   ---------    ---------        -----------     -----------      -----------
                                              131,861       8,407          -                 (352)        139,916             -
Cost of Sales                                  99,002       6,406          -                 (352)        105,056             -
Selling, General
 and Administrative Expenses                   32,786       1,826          675               -             35,287             -
                                             --------   ---------    ---------        -----------     -----------      -----------
Operating Income (Loss)                            73         175         (675)              -               (427)            -
Interest (Expense) Income - net
   Affiliates                                  (3,174)       (192)       3,366               -                -               -
   Third party                                   (350)       (240)     (13,886)              -            (14,431)            -
                                             --------   ---------    ---------        -----------     -----------      -----------

Loss Before Income Taxes, Equity
in Earnings (Loss) of Subsidiaries and
Minority Interest                              (3,406)       (257)     (11,195)              -            (14,858)            -
Provision for Income Taxes                     (1,065)        -  )         -                 -             (1,065)            -
Equity in Earnings (Loss) of Subsidiaries        (230)        -         (4,701)             4,931             -            (15,896)
Minority Interest                                 -           -            -                   27              27             -
                                             --------   ---------    ---------        -----------     -----------      -----------
Net Income (Loss)                            $ (4,701)  $    (257)   $ (15,896)       $     4,958     $   (15,896)         (15,896)
                                             ========   =========    =========        ===========     ===========      ===========


</TABLE>


                                                        Consolidated
                                                             MMH
                                          Eliminations  Holdings, Inc.
                                          -----------   --------------


Revenues
   Net Sales                                 $    -     $ 139,769
   Other Income - net                             -           147
                                             --------   ---------
                                                  -       139,916
Cost of Sales                                     -       105,056
Selling, General
 and Administrative Expenses                      -        35,287
                                             --------   ---------
Operating Income (Loss)                           -          (427)
Interest (Expense) Income - net
   Affiliates                                     -           -
   Third party                                    -       (14,431)
                                             --------   ---------

Loss Before Income Taxes, Equity
in Earnings (Loss) of Subsidiaries and
Minority Interest                                 -       (14,858)
Provision for Income Taxes                        -        (1,065)
Equity in Earnings (Loss) of Subsidiaries      15,896         -
Minority Interest                                 -            27
                                             --------   ---------
Net Income (Loss)                            $ 15,896   $ (15,896)
                                             ========   =========



                    FOR THE THREE MONTHS ENDED APRIL 30, 2000

<TABLE>
<CAPTION>

                                                             Non        Morris                        Consolidated
                                            Guarantor     Guarantor     Material                     Morris Material       MMH
                                          Subsidiaries  Subsidiaries  Handling, Inc.  Eliminations    Handling, Inc.  Holdings, Inc.
                                          ------------  ------------ --------------   ------------   --------------   --------------
<S>                                          <C>        <C>          <C>              <C>             <C>              <C>
Revenues
   Net Sales                                 $ 67,575   $   4,310    $     -          $       (36)    $    71,849      $       -
   Other Income - net                              70         (25)         -                  -                45              -
                                             --------   ---------    ---------        -----------     -----------      -----------
                                               67,645       4,285          -                  (36)         71,894              -
Cost of Sales                                  51,170       3,308          -                  (36)         54,442              -
Selling, General
 and Administrative expenses                   17,963         939          452                -            19,354              -
                                             --------   ---------    ---------        -----------     -----------      -----------
Operating Income                               (1,488)         38         (452)               -            (1,902)             -
Interest (Expense) Income - net
   Affiliates                                  (1,564)        (97)       1,661                -               -                -
   Third Party                                   (174)       (102)      (7,247)               -            (7,523)             -
                                             --------   ---------    ---------        -----------     -----------      -----------

Loss Before Income Taxes, Equity
in Earnings (Loss) of Subsidiaries and
Minority Interest                              (3,226)       (161)      (6,038)               -            (9,425)             -
Provision for Income Taxes                     (1,271)        -         (2,247)               -            (3,518)             -
Equity in Earnings (Loss) of Subsidiaries        (140)        -         (4,637)             4,777             -            (12,922)
Minority Interest                                 -           -            -                   21              21              -
                                             --------   ---------    ---------        -----------     -----------      -----------
Net Income (Loss)                            $ (4,637)  $    (161)   $ (12,922)       $     4,798     $   (12,922)     $   (12,922)
                                             ========   =========    =========        ===========     ===========      ===========


</TABLE>



                                                        Consolidated
                                                             MMH
                                          Eliminations  Holdings, Inc.
                                          -----------   --------------


Revenues
   Net Sales                                 $    -     $ 67,575
   Other Income - net                             -           70
                                             --------   ---------
                                                  -       67,645
Cost of Sales                                     -        51,170
Selling, General
 and Administrative Expenses                      -        17,963
                                             --------   ---------
Operating Income (Loss)                           -        (1,488)
Interest (Expense) Income - net
   Affiliates                                     -        (1,564)
   Third party                                    -          (174)
                                             --------   ---------

Loss Before Income Taxes, Equity
in Earnings (Loss) of Subsidiaries and
Minority Interest                                 -        (3,226)
Provision for Income Taxes                        -        (1,271)
Equity in Earnings (Loss) of Subsidiaries      12,922        (140)
Minority Interest                                 -           -
                                             --------   ---------
Net Income (Loss)                            $ 12,922   $ (4,637)
                                             ========   =========


                                       27
<PAGE>
ROZ Start here

                               MMH HOLDINGS, INC.
                   (Debtors-in-Possession as of May 17, 2000)
          SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF CASHFLOWS
                     FOR THE SIX MONTHS ENDED APRIL 30, 2000
                                   (UNAUDITED)
                             (Dollars in Thousands)


<TABLE>
<CAPTION>

                                                             Non       Morris                         Consolidated
                                           Guarantor     Guarantor    Material                       Morris Material        MMH
                                         Subsidiaries  Subsidiaries  Handling, Inc.   Eliminations    Handling, Inc.  Holdings, Inc.
                                         ------------  ------------  --------------   ------------   --------------   --------------
<S>                                          <C>        <C>          <C>              <C>             <C>              <C>
Operating Activities
  Net income (Loss)                          $ (9,377)  $   (734)    $ (17,776)       $    10,111     $   (17,776)     $   (17,776)
  Add (deduct) - items not
   affecting cash provided by
   operating activities:
     Depreciation and amortization              4,468         74            21                -             4,563              -
     Amortization of debt
      financing cost                              -          -           1,174                -             1,174              -
     Equity in loss of subsidiaries               707        -           9,377            (10,084)            -             17,776
     Gain on sale of business                     -          -          (6,380)               -
     Deferred income taxes - net                  -          -             -                  -               -
     Other                                        -          -             -                  (27)            (27)             -
Changes in working capital, excluding
 the effects of acquisition opening
 balance sheets:
     Accounts receivable                        7,886         426          -                  -             8,312              -
     Inventories                               (1,419)        (79)         -                  -            (1,498)             -
     Other current assets                      (2,265)          7          250                -            (2,008)             -
     Trade accounts payable and
      bank overdrafts                          (6,965)        608          -                  -            (6,357)             -
     Accrued interest                               8           -        9,726                -             9,734              -
     Other current liabilities                    943         (65)       2,580                -             3,458              -
                                             --------   ---------    ---------        -----------     -----------      -----------
Net cash provided by (used for)
 operating activities                          (6,014)        237       (1,028)               -            (6,805)             -
                                             --------   ---------    ---------        -----------     -----------      -----------

Investment and Other Transactions
  Fixed asset additions - net                    (495)         21          -                 -               (474)             -
  Capitalized software                           (997)        -            -                 -               (997)             -
  Net proceeds on divestiture of business       9,115         -            -                 -              9,115              -
  Other - net                                    (115)        (11)         (70)              -               (196)             -
                                             --------   ---------    ---------        -----------     -----------      -----------
  Net cash used for investment and
   other transactions                           7,508          10          (70)              -              7,448              -
                                             --------   ---------    ---------        -----------     -----------      -----------

Financing Activities
  Changes in short-term debt and
   notes payable                                6,868         (28)         -                 -              6,840              -
  Proceeds from/(Repayments of)
   Revolving Credit Facility borrowings           -          -          (4,775)              -             (4,775)             -
  Repayments of Term Loans                        -          -          (3,812)              -             (3,812)             -
  Repayments of Acquisition Facility
   Line borrowings                                -          -            (336)              -               (336)             -
  Distribution to parent                       (8,846)         99        8,747               -                -                -
  Repayments of long-term debt                    (87)       -             -                 -                (87)             -
  Payment of fees for amendment of
   New Credit Facility                            -          -            (226)              -               (226)             -
                                             --------   ---------    ---------        -----------     -----------      -----------
  Net cash provided by (used for)
   financing activities                        (2,065)         71         (402)              -             (2,396)             -
                                             --------   ---------    ---------        -----------     -----------      -----------
  Effect of Exchange Rate Changes on
   Cash and Cash Equivalents                      (55)        (20)         -                 -                (75)             -
                                             --------   ---------    ---------        -----------     -----------      -----------
  Increase (Decrease) in Cash and
   Cash Equivalents                              (626)        298       (1,500)              -             (1,828)             -
  Cash and Cash Equivalents
    Beginning of Period                         2,325         104        1,500               -              3,929              -
                                             --------   ---------    ---------        -----------     -----------      -----------
    End of Period                            $  1,699   $     402            0               -              2,101              -
                                             ========   =========    =========        ===========     ===========      ===========


</TABLE>


                                                        Consolidated
                                                             MMH
                                          Eliminations  Holdings, Inc.
                                          -----------   --------------

Operating Activities
  Net income (Loss)                          $ 17,776   $ (17,776)
  Add (deduct) - items not
   affecting cash provided by
   operating activities:
     Depreciation and amortization                -         4,563
     Amortization of debt
      financing cost                              -         1,174
     Equity in loss of subsidiaries           (17,776)        -
     Gain on sale of business                     -        (6,380)
     Deferred income taxes - net                  -           -
     Other                                        -         8,312
Changes in working capital, excluding
 the effects of acquisition opening
 balance sheets:
     Accounts receivable
     Inventories                                  -        (1,498)
     Other current assets                         -        (2,008)
     Trade accounts payable and
      bank overdrafts                             -        (6,357)
     Accrued interest                             -         9,734
     Other current liabilities                    -         3,458
                                             --------   ---------
Net cash provided by (used for)
 operating activities                             -        (6,805)
                                             --------   ---------

Investment and Other Transactions
  Fixed asset additions - net
  Capitalized software                            -          (474)
  Net proceeds on divestiture of business         -          (997)
  Other - net                                     -         9,115
  Net cash used for investment and
   other transactions                             -          (196)
                                             --------   ---------
                                                  -         7,448

Financing Activities
  Changes in short-term debt and
   notes payable                                  -         6,840
  Proceeds from/(Repayments of)
   Revolving Credit Facility borrowings           -        (4,775)
  Repayments of Term Loans                        -        (3,812)
  Repayments of Acquisition Facility
   Line borrowings                                -          (336)
  Distribution to parent                          -           -
  Repayments of long-term debt                    -           (87)
  Payment of fees for amendment of
   New Credit Facility                            -          (226)
                                             --------   ---------
  Net cash provided by (used for)
   financing activities                           -        (2,396)
                                             --------   ---------
  Effect of Exchange Rate Changes on
   Cash and Cash Equivalents                      -           (75)
                                             --------   ---------
  Increase (Decrease) in Cash and
   Cash Equivalents                               -        (1,828)
  Cash and Cash Equivalents
    Beginning of Period                           -         3,929
                                             --------   ---------
    End of Period                                 -         2,101
                                             ========   =========


                               MMH HOLDINGS, INC.
                   (Debtors-in-Possession as of May 17, 2000)
          SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF CASHFLOWS
                     FOR THE SIX MONTHS ENDED APRIL 30, 2000
                                   (UNAUDITED)
                             (Dollars in Thousands)


<TABLE>
<CAPTION>

                                                             Non        Morris                        Consolidated
                                           Guarantor     Guarantor     Material                      Morris Material        MMH
                                         Subsidiaries  Subsidiaries  Handling, Inc.   Eliminations   Handling, Inc.   Holdings, Inc.
                                         ------------  ------------  --------------   ------------   --------------   --------------
<S>                                          <C>        <C>          <C>              <C>             <C>              <C>
Operating Activities
  Net income (Loss)                          $ (4,701)  $   (257)    $ (15,896)       $     4,958     $   (15,896)     $   (15,896)
  Add (deduct) - items not
   affecting cash provided by
   operating activities:
     Depreciation and amortization              3,707         146          -                  -             3,853              -
     Amortization of debt
      financing cost                              -           -          1,048                -             1,048              -
     Equity in loss of subsidiaries               230         -          4,701             (4,931)            -             15,896
     Deferred income taxes - net                  -           -             31                -                31              -
     Other                                        -           -            -                  (27)            (27)             -
Changes in working capital, excluding
 the effects of acquisition opening
 balance sheets:
     Accounts receivable                       17,901       1,384          -                  -            19,285              -
     Inventories                                1,846        (584)         -                  -             1,262              -
     Other current assets                      (6,201)     (1,269)       3,407                -            (4,063)             -
     Trade accounts payable and
      bank overdrafts                          (8,197)         72          -                  -            (8,125)             -
     Accrued interest                             144         -           (544)               -              (400)             -
     Other current liabilities                (12,581)        128        8,080                -            (4,373)             -
                                             --------   ---------    ---------        -----------     -----------      -----------
Net cash provided by (used for)
 operating activities                          (7,852)       (380)         827                -            (7,405)             -
                                             --------   ---------    ---------        -----------     -----------      -----------

Investment and Other Transactions
  Fixed asset additions - net                  (4,585)       (159)         -                  -            (4,744)             -
  Capitalized software                            -           -            -                  -               -                -
  Acquisition of businesses - net
   of cash acquired                            (5,070)        -            -                  -            (5,070)             -
  Repayment of loans by senior
   management                                     -           -             70                -                70              -
  Other - net                                    (421)        176          -                  -              (245)
                                             --------   ---------    ---------        -----------     -----------      -----------
  Net cash (used for) provided by
   investment and other transactions          (10,076)         17           70                -            (9,989)              -
                                             --------   ---------    ---------        -----------     -----------      -----------

Financing Activities
  Changes in short-term debt and
   notes payable                                8,147        120           -                 -              8,267              -
  (Repayments of)/Proceeds from
   Revolving Credit Facility borrowings           -           -          8,784               -              8,784              -
  Proceeds from Aquisitions Facility
   Line borrowings                                -           -          1,235               -              1,235              -
  Distribution to parent                       10,241         -        (10,241)              -                -                -
  Repayments of long-term debt                    -           -           (675)              -               (675)             -
                                             --------   ---------    ---------        -----------     -----------      -----------
  Net cash provided by (used for)
   financing activities                        18,388         120         (897)              -             17,611              -
                                             --------   ---------    ---------        -----------     -----------      -----------
  Effect of Exchange Rate Changes on
   Cash and Cash Equivalents                       45          (6)         -                -                  39              -
                                             --------   ---------    ---------        -----------     -----------      -----------
  Increase (Decrease) in Cash and
   Cash Equivalents                               505        (249)         -                -                 256              -
  Cash and Cash Equivalents
    Beginning of Period                         2,214         320          -                -               2,534              -
                                             --------   ---------    ---------        -----------     -----------      -----------
    End of Period                            $  2,719          71          -                -               2,790              -
                                             ========   =========    =========        ===========     ===========      ===========



</TABLE>



                                                        Consolidated
                                                             MMH
                                          Eliminations  Holdings, Inc.
                                          -----------   --------------


Operating Activities
  Net income (Loss)                          $ 15,896   $ (15,896)
  Add (deduct) - items not
   affecting cash provided by
   operating activities:
     Depreciation and amortization                -         3,853
     Amortization of debt
      financing cost                              -         1,048
     Equity in loss of subsidiaries               -           -
     Deferred income taxes - net              (15,896)         31
     Other                                        -           (27)
Changes in working capital, excluding
 the effects of acquisition opening
 balance sheets:
     Accounts receivable                          -        19,285
     Inventories                                  -         1,262
     Other current assets                         -        (4,063)
     Trade accounts payable and
      bank overdrafts                             -        (8,125)
     Accrued interest                             -          (400)
     Other current liabilities                    -        (4,373)
                                             --------   ---------

Net cash provided by (used for)
 operating activities                             -        (7,405)
                                             --------   ---------

Investment and Other Transactions
  Fixed asset additions - net                    -         (4,744)
  Capitalized software                           -            -
  Acquisition of businesses - net
   of cash acquired                              -         (5,070)
  Repayment of loans by senior
   management                                    -             70
  Other - net                                    -           (245)
                                             --------   ---------
  Net cash (used for) provided by
   investment and other transactions             -         (9,989)
                                             --------   ---------

Financing Activities
  Changes in short-term debt and
   notes payable                                 -           8,267
  (Repayments of)/Proceeds from
   Revolving Credit Facility borrowings          -           8,784
  Proceeds from Aquisitions Facility
   Line borrowings                               -           1,235
  Distribution to parent                         -             -
  Repayments of long-term debt                   -           (675)
                                             --------   ---------
  Net cash provided by (used for)
   financing activities                          -         17,611
                                             --------   ---------
  Effect of Exchange Rate Changes on
   Cash and Cash Equivalents                     -             39
                                             --------   ---------
  Increase (Decrease) in Cash and
   Cash Equivalents                              -            256
  Cash and Cash Equivalents
    Beginning of Period                          -          3,534
                                             --------   ---------
    End of Period                                -          2,790
                                             ========   =========

                                       29
<PAGE>



NOTE 12 - SUBSEQUENT EVENTS
---------------------------

On May 17, 2000, the Debtors filed voluntary petitions for reorganization  under
Chapter 11 of the Bankruptcy Code in the United States  Bankruptcy Court for the
District of  Delaware.  The Debtors  will  continue to  implement  cost  savings
initiatives to bring their costs in line with market requirements. In connection
with   the   filing,    the   Debtors   have   received    court   approval   of
debtor-in-possession  financing of $35 million and are authorized to continue to
utilize  their  collections  in the  operation  of their  business.  See Note 1,
Reorganization  under Chapter 11, Note 4,  Liquidity  and Capital  Resources and
Note 7, Indebtedness.


                                      29

<PAGE>


                               MMH HOLDINGS, INC.
                         MORRIS MATERIAL HANDLING, INC.
                 (Debtors - in - Possession as of May 17, 2000)

                 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. AS
USED HEREIN, UNLESS THE CONTEXT OTHERWISE REQUIRES, THE TERM "COMPANY" REFERS TO
MMH HOLDINGS,  INC., AND ITS SUBSIDIARIES,  INCLUDING MORRIS MATERIAL  HANDLING,
INC.

GENERAL

On May 17, 2000,  MMH  Holdings,  Inc. and its domestic  operating  subsidiaries
filed voluntary petitions for reorganization  under Chapter 11 of the Bankruptcy
Code in the United  States  Bankruptcy  Court for the District of Delaware in an
action that covers the parent company and its U.S. based operating subsidiaries.
The Debtors are currently  operating their  businesses as  debtors-in-possession
pursuant to the Bankruptcy  Code.  Pursuant to the Bankruptcy  Code,  actions to
collect certain  prepetition  indebtedness of the Debtors and other  obligations
against the Debtors  may not be  enforced.  These  claims will be  reflected  in
subsequent filings in the balance sheet as "liabilities  subject to compromise".
In  addition,  under the  Bankruptcy  Code,  the  Debtors  may  assume or reject
executory  contracts,  including  leases.  Additional claims may arise from such
rejection,  and from the determination by the court (or agreed by the parties in
interest) to allow claims for contingencies and other disputed amounts. However,
the  Debtors  have not yet  completed  their  review  of all  their  prepetition
executory contracts and leases for assumption or rejection.

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


                                       31
<PAGE>


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.

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).

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 $11.6 million as of April 30,
2000). MMH accrued a fee of $111,510 for the first half 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
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  $2,355,000  of expenses  for royalty  fees in the period from March 30,
1999 to April 30, 2000,  including $1,002,000 for the six months ended April 30,
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.

FINANCIAL  COVENANT  VIOLATIONS.  The  Company  did not meet  certain  financial
covenants  contained in the New Credit  Facility for the quarter ended April 30,
2000 and anticipates that it will not meet them in the foreseeable  future.  The
Company


                                       32

<PAGE>


entered into several Amendments and Waivers under the New Credit Facility, dated
as of January 31, 2000 through April 28, 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. May 26, 2000 (the  "Waivers").  The
Waivers permitted 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 $12.4 million, during the period to which the Waivers apply.

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
April 30, 2000, MHE Investments owned approximately 54.5% of the Holdings Common
Stock,   HarnCo  owned   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.

CHAPTER 11  FILING.  As  discussed  above,  on May 17,  2000,  Holdings  and its
domestic  operating  subsidiaries  filed voluntary  petitions for reorganization
under Chapter 11 of the U.S.  Bankruptcy  Code. On May 18, 2000,  the Bankruptcy
Court entered an order approving  $10.0 million in interim  debtor-in-possession
financing  to  the  Debtors  and   authorizing  the  Debtors  to  utilize  their
collections  in the  operation  of  their  business.  This  $10  million  amount
represented the initial portion under a commitment by the lenders to provide $35
million in financing  (including a letter of credit facility) in connection with
the Debtors' Chapter 11 cases. The full $35 million facility was approved by the
Bankruptcy  Court on June 15, 2000.  This new  facility has an initial  maturity
date of December 1, 2000, which date,  absent a default,  shall be automatically
extendable  to  June 1,  2001  if a sale of the  Debtors  shall  not  have  been
consummated prior to December 1, 2000.

The Company  believes that the filing  provides the Debtors with the opportunity
to   restructure   its   indebtedness.   The  Company  plans  to  continue  with
implementation  of its cost  savings  initiatives  to bring  costs in line  with
market requirements. Although no material adverse effects have occurred to date,
disruption  of  operations  relating  to the  Chapter  11  reorganization  could
adversely affect the Debtors'  relationships  with their  creditors,  customers,
suppliers or employees.

HII BANKRUPTCY PETITION.  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 six months ended April 30, 2000,  the Company did not
make any  acquisitions.  During the six months ended April 30, 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 six months ended April 30, 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 $1.4 million in the six
months ended April 30, 1999. Additionally, a payment of $100 was made in each of
the six  month  periods  ended  April  30,  2000 and 1999  toward a fiscal  1998
purchase which was partially  financed


                                       33

<PAGE>



by the  seller.  On a pro forma  basis,  the  fiscal  1999  acquisition  was not
material to results of  operations  reported  for the six months ended April 30,
1999 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.

RESULTS OF OPERATIONS

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

                                                           SUPPLEMENTAL DATA
                                                         (DOLLARS IN MILLIONS)


<TABLE>

<CAPTION>

                            THREE MONTHS ENDED        THREE MONTHS ENDED         SIX MONTHS ENDED       SIX MONTHS ENDED
                           --------------------   ----------------------    ----------------------   ---------------------
                             APRIL 30, 2000            APRIL 30, 1999            APRIL 30, 2000          APRIL 30, 1999
                           --------------------   ----------------------    ----------------------   ---------------------
                                     Percent of              Percent of                Percent of               Percent of
                              $       NET SALES       $       NET SALES         $       NET SALES       $       NET SALES
                           --------  ----------   --------   ----------     --------   ----------    --------   ----------
<S>                        <C>         <C>          <C>         <C>         <C>          <C>          <C>         <C>

Net Sales                  $  66.2     100.0%       $71.9      100.0%       $ 132.9      100.0%      $139.8       100.0%
Other income - net             -          -          -            -             -           -            .1          .1%
Cost of sales                 50.7      76.6%        54.4       75.7%         101.6       76.4%       105.1        75.2%
Selling, general and
  Administrative expenses     21.3      32.2%        19.4       27.0%          38.1       28.7%        35.3        25.3%
Operating income (loss)       (5.8)     -8.8%        (1.9)      -2.7%          (6.8)      -5.1%         (.5)         -.4%
Gain on sale of business        -        -              -         -             6.4        4.8%          -           -
Interest expense              (7.6)    -11.5%        (7.5)     -10.4%         (15.4)     -11.6%       (14.4)       -10.3%
Tax benefit (expense)         (.2)       -.3%       (3.5)       -4.9%          (2.0)      -1.5%       (1.0)          -.7%
Net loss                     (13.6)    -20.6%       (12.9)     -18.0%         (17.8)     -13.4%       (15.9)       -11.4%

</TABLE>

SIX MONTHS ENDED APRIL 30, 2000 COMPARED TO SIX MONTHS ENDED APRIL 30, 1999

Net sales for the six months ended April 30, 2000 ("First Half 2000")  decreased
$6.9 million or 4.9% to $132.9  million  from $139.8  million for the six months
ended  April  30,  1999  ("First  Half  1999").  The  decrease  in net sales was
primarily caused by the following:  (i) $4.4 million decrease in U.S. engineered
crane sales due to a slow down in new orders  during First Half 2000;  (ii) $3.1
million  lower service  sales in the U.S.,  primarily in the west,  due to heavy
competition and lack of service technicians;  and (iii) $1.5 million decrease in
South African  engineered  crane sales where a large project was being performed
during the same period in the prior year.  These decreases were partially offset
by: (i) a $1.5  million  increase  in hoists for  southeast  Asia as that market
begins to show renewed activity;  and (ii) increased parts sales of $1.1 million
with  improvement  in  the  U.S.  from  wider  spread  coverage  resulting  from
Company-owned distribution operations.

Cost of sales  decreased to $101.6 million in First Half 2000 compared to $105.1
million for the First Half 1999.  Cost of sales increased as a percentage of net
sales  from  75.2% in First  Half 1999 to 76.4% in First  Half 2000 due to lower
selling prices in the engineered crane, hoist and service markets as a result of
competitive pressures.

Selling,  general and administrative  expenses increased $2.9 million or 8.2% to
$38.2  million  in First Half 2000 from  $35.3  million in First Half 1999.  The
primary  causes of the  increase  were:  (i)  professional  fees  related to the
restructuring  of the  Company's  operations  and  capital  structure;  (ii) the
accrued royalty to HII for use of the P&H trademark;  (iii)  increased  goodwill
amortization  due to the fiscal 1999 fourth quarter  change in the  amortization
period for the goodwill related to the Company's international operations;  (iv)
increases  due to a fiscal 1999  acquisition  subsequent to the first quarter of
1999;  (v)  additional  contract  related costs  associated  with the port crane
business in the United Kingdom; and (vi) the writeoff of accounts receivable due
from a  Malaysian  joint  venture.  These  increases  were  partially  offset by
approximately   $1.0  million  of  savings  realized  due  to  the  fiscal  1999
restructuring of the United Kingdom and United States administrative functions.

Approximately  $15.4  million in interest  expense,  including  $1.2  million in
amortization  of  related  financing  costs,  was  recorded  in First  Half 2000
compared to $14.4  million,  including $1.0 million in  amortization  of related
financing  costs,  in


                                       33

<PAGE>



First Half 1999. The Company paid $4.4 million and $13.8 million of interest and
commitment fees during First Half 2000 and First Half 1999, respectively.

Tax expense of $2.0 million recorded in First Half 2000 related primarily to the
estimated  tax recorded on the sale of the Brake  Business in December  1999 and
profitable operations in Canada.

The  Company's  backlog  of  orders at April 30,  2000 was  approximately  $78.2
million compared to $97.2 million at April 30, 1999. Bookings in First Half 2000
were $133.8  million  compared to $139.7 million in First Half 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.


THREE MONTHS ENDED APRIL 30, 2000 COMPARED TO THREE MONTHS ENDED APRIL 30, 1999

Net sales for the three  months  ended April 30, 2000  ("Second  Quarter  2000")
decreased $5.7 million or 7.9% to $66.2 million from $71.9 million for the three
months ended April 30, 1999 ("Second  Quarter 1999").  The decrease in net sales
was  primarily  caused by the  following:  (i) a decrease of $5.1 million in the
sale of engineered  cranes in the U.S.  reflecting  the lower level of orders in
recent months; (ii) a decrease in service sales of $2.2 million in North America
due to competitive  pressures and turnover in service  technicians;  and (iii) a
$1.9  million  decrease  in the  sale  of  engineered  cranes  in the  Company's
international  market. These decreases were partially offset by: (i) an increase
of $3.9 million in the sale of standard cranes caused by continued growth of the
U.S. regional crane builders;  (ii) an increase in hoists and components of $1.9
million tied to the increase in standard  crane sales;  and (iii) an increase in
overall  parts  sales  of $0.5  million  resulting  from  improved  coverage  in
territories formerly covered by independent dealers.

Cost of sales  decreased to $50.7  million in Second  Quarter  2000  compared to
$54.4  million  for the  Second  Quarter  1999.  Cost of  sales  increased  as a
percentage  of net sales  from 75.7% in Second  Quarter  1999 to 76.6% in Second
Quarter 2000 due to lower  selling  prices in the  engineered  crane and service
markets as a result of competitive pressures.

Selling,  general and administrative  expenses increased $1.9 million or 9.8% to
$21.3 million in Second  Quarter 2000 from $19.4 million in Second Quarter 1999.
The  primary  causes  were:  (i)  professional  fees  related  to the  Company's
restructuring;  (ii) the  accrued  royalty to HII for use of the P&H  trademark;
(iii)  increased  goodwill  amortization  due to the fiscal 1999 fourth  quarter
change in the  amortization  period for the  goodwill  related to the  Company's
international operations; (iv) additional contract related costs associated with
the port crane business in the United Kingdom; and (vi) the writeoff of accounts
receivable due from a Malaysian  joint venture.  These  increases were partially
offset by savings  realized due to the fiscal 1999  restructuring  of the United
Kingdom and United States administrative functions.

Approximately  $7.6  million in  interest  expense,  including  $0.6  million in
amortization  of related  financing  costs,  was recorded in Second Quarter 2000
compared to $7.5  million,  including  $0.5 million in  amortization  of related
financing  costs,  in the Second Quarter 1999. The Company paid $2.8 million and
$12.2 million of interest and commitment fees during the Second Quarter 2000 and
Second Quarter 1999, respectively.

Tax expense of $0.2 million  recorded in the Second  Quarter 2000 was the result
of profitable operations in Canada as well as state tax liabilities.

The  Company's  backlog  of  orders at April 30,  2000 was  approximately  $78.2
million compared to $97.2 million at April 30, 1999.  Bookings in Second Quarter
2000 were $56.5 million  compared to $76.6 million in Second  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.

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.


                                       34
<PAGE>


Net cash flow used for operating  activities  for First Half 2000 and First Half
1999 was $6.8 million and $7.4 million, respectively.

Net cash provided by investment and other  transactions  for First Half 2000 was
$7.4 million compared to net cash used for investment and other  transactions of
$10.0 million for First Half 1999. During First Half 2000, $9.1 million of cash,
net of  transaction  costs,  was  provided  by the  sale of the  Canadian  brake
business.  This was  partially  offset by $0.1 million of cash used for deferred
payments on previous acquisitions. During First Half 1999, $5.1 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 $1.5 million in First Half 2000
from $4.7 million in First Half 1999. The First Half 2000 expenditures  included
computers and manufacturing equipment. The First Half 1999 expenditures included
computers and  upgrades,  new operating  system  software,  office and warehouse
consolidations and manufacturing equipment.

Net cash used for  financing  activities  was $2.4  million  in First  Half 2000
compared to net cash provided by financing  activities of $17.6 million in First
Half 1999.  Net  repayments  in First Half 2000  included $4.8 million under the
Revolving  Credit Facility in the United States and United Kingdom.  The Company
also  paid  $4.1  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 Second  Quarter  2000,  the  Company  had $30.0  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 $5.3 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.

The Company did not meet certain financial covenants contained in the New Credit
Facility for the quarter ended April 30, 2000 and  anticipates  that it will not
meet them in the foreseeable future. The Company entered into several Amendments
and Waivers under the New Credit Facility,  dated as of January 31, 2000 through
April 28, 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. May 26, 2000 (the "Waivers"). The Waivers permitted 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 $12.4  million,
during the period to which the Waivers apply.

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


                                       35

<PAGE>


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  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
manditorily redeemable.

On May  17,  2000,  Holdings  and  its  domestic  operating  subsidiaries  filed
voluntary  petitions for reorganization  under Chapter 11 of the U.S. Bankruptcy
Code. On May 18, 2000, the  Bankruptcy  Court entered an order  approving  $10.0
million in interim debtor-in-possession financing to the Debtors and authorizing
the Debtors to utilize their  collections  in the  operation of their  business.
This $10 million amount  represented  the initial  portion under a commitment by
the lenders to provide $35 million in  financing  (including  a letter of credit
facility) in connection with the Debtors' Chapter 11 cases. The full $35 million
facility  was  approved  by the  Bankruptcy  Court  on June 15,  2000.  This new
facility has an initial maturity date of December 1, 2000, which date,  absent a
default,  shall be  automatically  extendable  to June 1,  2001 if a sale of the
Debtors shall not have been consummated prior to December 1, 2000.

The Company  believes that the filing  provides the Debtors with the opportunity
to restructure its indebtedness.  The Company plans to continue to implement its
cost  savings  initiatives  to bring  costs in line  with  market  requirements.
Although no material  adverse  effects  have  occurred  to date,  disruption  of
operations relating to the Chapter 11 reorganization  could adversely affect the
Debtors' relationships with their creditors, customers, suppliers or employees.

The Company is currently seeking, and is engaged in discussions  regarding,  its
strategic  alternatives.  The Company has engaged in  discussions  with its bank
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.

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:

     o  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


                                       36

<PAGE>



        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 $5.3 million have been issued.

        The Company did not meet certain  financial  covenants  contained in the
        New Credit Facility for the quarter ended April 30, 2000 and anticipates
        that it will  not  meet  them in the  foreseeable  future.  The  Company
        entered  into  several  Amendments  and  Waivers  under  the New  Credit
        Facility,  dated as of January 31, 2000 through April 28, 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.  May 26,  2000 (the  "Waivers").  The  Waivers  permitted  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 $12.4 million, during the period as to which the Waivers
        apply.

        On May 17, 2000, Holdings and its domestic operating  subsidiaries filed
        voluntary  petitions  for  reorganization  under  Chapter 11 of the U.S.
        Bankruptcy  Code. See Note 1,  Reorganization  under Chapter 11 and Note
        12, Subsequent  Events. On May 18, 2000, the Bankruptcy Court entered an
        order approving $10.0 million in interim debtor-in-possession  financing
        to the Debtors and authorizing the Debtors to utilize their  collections
        in the operation of their business.  This $10 million amount represented
        the initial  portion  under a  commitment  by the lenders to provide $35
        million  in  financing  (including  a  letter  of  credit  facility)  in
        connection  with the  Debtors'  Chapter 11 cases.  The full $35  million
        facility was approved by the Bankruptcy Court on June 15, 2000. This new
        facility has an initial  maturity date of December 1, 2000,  which date,
        absent a default, shall be automatically extendable to June 1, 2001 if a
        sale of the Debtors shall not have been consummated prior to December 1,
        2000.

        The Company  believes  that the filing  provides  the  Debtors  with the
        opportunity  to  restructure  its  indebtedness.  The  Company  plans to
        continue to  implement  its cost savings  initiatives  to bring costs in
        line with market requirements. Although no material adverse effects have
        occurred to date,  disruption of  operations  relating to the Chapter 11
        reorganization  could adversely affect the Debtors'  relationships  with
        their creditors, customers, suppliers or employees.

        As of the end of the second  quarter  of 2000,  the  Company  had $306.7
        million of indebtedness  outstanding,  including $90.9 million under the
        New Credit  Facility  (including  accrued  interest) and $211.1  million
        evidenced by the Senior Notes (including accrued interest).

        The  Company  is  currently  seeking,  and  is  engaged  in  discussions
        regarding,  its  strategic  alternatives.  The  Company  has  engaged in
        discussions with its bank 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.

     o  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


                                       37

<PAGE>


        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.

     o  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.

     o  RISKS  ASSOCIATED  WITH  INTERNATIONAL  OPERATIONS  -  The  Company  has
        operations  and  assets  located in Canada,  Mexico,  Chile,  the United
        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 37.7% and 40.4% of the
        Company's  aggregate  net sales for the six months  ended April 30, 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.

     o  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.

     o  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,  although there remains a potential for Year 2000
problems to occur after January 1, 2000. Management,  however, 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.


                                       38

<PAGE>


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. All
material IT and non-IT  equipment,  processes  and software  were  compliant and
resulted in no material Year 2000 issues through June 28, 2000.

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.

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.


                                       39


<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,
except  for the  termination  of the  Company's  interest  rate swap  during the
quarter ended April 30, 2000.


                                       40


<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 April 30, 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
        -------------------------------

     In  advance of the  Chapter 11  bankruptcy  filings  described  in Item 2 -
     Management's  Discussion and Analysis of Financial Condition and Results of
     Operations  of Part I, the Debtors  were unable to pay the  interest on the
     Senior Notes.

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
         April 30, 2000.


                                       41


<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:  June 28, 2000               /S/ DAVID D. SMITH
                                        -------------------
                                        David D. Smith
                                        Vice President - Finance
                                        (Principal Financial Officer)



                                        MORRIS MATERIAL HANDLING, INC.


     Date:  June 28, 2000               /S/ DAVID D. SMITH
                                        -------------------
                                        David D. Smith
                                        Vice President - Finance
                                        (Principal Financial Officer)


                                       42

<PAGE>




EXHIBIT
 NUMBER                         EXHIBIT DESCRIPTION
--------                        -------------------

  27.1     Financial Data Schedule

  27.2     Financial Data Schedule



                                       43