UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D. C. 20549
                                    FORM 10-Q

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES  EXCHANGE
ACT 1934

For the quarterly period ended October 1, 2006

                                       or

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934.

For the transition period from                     to
                               -------------------    --------------------

Commission File Number:       0-27618
                              -------

                          COLUMBUS MCKINNON CORPORATION
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

                 NEW YORK                             16-0547600
--------------------------------------------------------------------------------
      (State or other jurisdiction of     (I.R.S. Employer Identification No.)
       incorporation or organization)

  140 JOHN JAMES AUDUBON PARKWAY, AMHERST, NY                    14228-1197
--------------------------------------------------------------------------------
   (Address of principal executive offices)                      (Zip code)

                                 (716) 689-5400
--------------------------------------------------------------------------------
              (Registrant's telephone number, including area code)


--------------------------------------------------------------------------------
     (Former name, former address and former fiscal year, if changed since
      last report.)


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

Indicate by checkmark  whether the registrant is a large  accelerated  filer, an
accelerated  filer, or a  non-accelerated  filer. See definition of "accelerated
filer and large accelerated filer" in Rule 12b-2 of the Act.

 Large accelerated filer [ ]   Accelerated filer [X]   Non-accelerated filer [ ]

Indicate by check mark whether the  registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). [ ] Yes [X] No

The number of shares of common  stock  outstanding  as of October  31, 2006 was:
18,762,062 shares.


<PAGE>


                                 FORM 10-Q INDEX
                          COLUMBUS MCKINNON CORPORATION
                                 OCTOBER 1, 2006


                                                                          PAGE #
PART I.  FINANCIAL INFORMATION                                            ------

Item 1.    Condensed Consolidated Financial Statements (Unaudited)

           Condensed consolidated balance sheets -
              October 1, 2006 and March 31, 2006                               2

           Condensed consolidated statements of operations
              and retained earnings - Three months and six
              months ended October 1, 2006 and October 2, 2005                 3

           Condensed consolidated statements of cash flows -
              Six months ended October 1, 2006 and October 2, 2005             4

           Condensed consolidated statements of comprehensive income -
              Three months and six months ended October 1, 2006
              and October 2, 2005                                              5

           Notes to condensed consolidated financial statements -
              October 1, 2006                                                  6

Item 2.    Management's Discussion and Analysis of Results of Operations
              and Financial Condition                                         17

Item 3.    Quantitative and Qualitative Disclosures About Market Risk         23

Item 4.    Controls and Procedures                                            23

PART II.  OTHER INFORMATION

Item 1.    Legal Proceedings - none.                                          24

Item 1A.   Risk Factors                                                       24

Item 2.    Unregistered Sales of Equity Securities and
              Use of Proceeds - none.                                         24

Item 3.    Defaults upon Senior Securities - none.                            24

Item 4.    Submission of Matters to a Vote of Security Holders                24

Item 5.    Other Information - none.                                          24

Item 6.    Exhibits                                                           24


                                     - 1 -
<PAGE>

PART I.     FINANCIAL INFORMATION

Item 1.     Condensed Consolidated Financial Statements (Unaudited)

                          COLUMBUS MCKINNON CORPORATION
                      CONDENSED CONSOLIDATED BALANCE SHEETS

                                                 OCTOBER 1,          MARCH 31,
                                                    2006               2006
                                                 ----------        -----------
                                                 (UNAUDITED)
ASSETS:                                                 (IN THOUSANDS)
Current assets:
      Cash and cash equivalents                  $   24,177        $    45,598
      Trade accounts receivable                      94,433             95,726
      Unbilled revenues                              16,832             12,061
      Inventories                                    85,904             74,845
      Prepaid expenses                               18,216             15,676
                                                 ----------        -----------
Total current assets                                239,562            243,906
Property, plant, and equipment, net                  54,542             55,132
Goodwill and other intangibles, net                 187,685            187,327
Marketable securities                                27,149             27,596
Deferred taxes on income                             37,355             46,065
Other assets                                          5,463              6,018
                                                 ----------        -----------
Total assets                                     $  551,756        $   566,044
                                                 ==========        ===========

LIABILITIES AND SHAREHOLDERS' EQUITY:
Current liabilities:
      Notes payable to banks                     $    7,616        $     5,798
      Trade accounts payable                         41,105             39,311
      Accrued liabilities                            59,344             61,264
      Restructuring reserve                             421                793
      Current portion of long-term debt                 215                127
                                                 ----------        -----------
Total current liabilities                           108,701            107,293
Senior debt, less current portion                    32,220             67,841
Subordinated debt                                   136,000            136,000
Other non-current liabilities                        50,693             50,489
                                                 ----------        -----------
Total liabilities                                   327,614            361,623
                                                 ----------        -----------
Shareholders' equity
      Common stock                                      187                185
      Additional paid-in capital                    173,085            170,081
      Retained earnings                              65,038             51,152
      ESOP debt guarantee                            (3,705)            (3,996)
      Unearned restricted stock                           -                (22)
      Accumulated other comprehensive loss          (10,463)           (12,979)
                                                 ----------        -----------
Total shareholders' equity                          224,142            204,421
                                                 ----------        -----------
Total liabilities and shareholders' equity       $  551,756        $   566,044
                                                 ==========        ===========

     SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.



                                     - 2 -
<PAGE>

<TABLE>
<CAPTION>

                          COLUMBUS MCKINNON CORPORATION
      CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
                                   (UNAUDITED)



                                                       THREE MONTHS ENDED                  SIX MONTHS ENDED
                                                       ------------------                  ----------------
                                                   OCTOBER 1,       OCTOBER 2,        OCTOBER 1,        OCTOBER 2,
                                                      2006             2005              2006              2005
                                                      ----             ----              ----              ----
                                                                (IN THOUSANDS, EXCEPT PER SHARE DATA)


<S>                                               <C>              <C>               <C>               <C>
Net sales                                         $   144,225      $   134,712       $   290,919       $   275,589
Cost of products sold                                 105,208           99,554           209,619           203,888
                                                  -----------      -----------       -----------       -----------
Gross profit                                           39,017           35,158            81,300            71,701
                                                  -----------      -----------       -----------       -----------

Selling expenses                                       14,739           13,080            30,106            26,738
General and administrative expenses                     8,540            8,539            17,629            16,714
Restructuring charges                                    (410)             211              (406)              237
Amortization of intangibles                                44               61                87               123
                                                  -----------      -----------       -----------       -----------
                                                       22,913           21,891            47,416            43,812
                                                  -----------      -----------       -----------       -----------

Income from operations                                 16,104           13,267            33,884            27,889
Interest and debt expense                               4,176            6,633             8,688            13,349
Other (income) and expense, net                        (1,066)           1,864             2,504             1,075
                                                  -----------      -----------       -----------       -----------
Income before income tax expense                       12,994            4,770            22,692            13,465
Income tax expense                                      4,898            1,721             9,163             3,308
                                                  -----------      -----------       -----------       -----------
Income from continuing operations                       8,096            3,049            13,529            10,157
Income from discontinued operations (net of tax)          218              214               357               428
                                                  -----------      -----------       -----------       -----------
Net income                                              8,314            3,263            13,886            10,585
Retained earnings
    (accumulated deficit) - beginning of period        56,724           (1,322)           51,152            (8,644)
                                                  -----------      -----------       -----------       -----------
Retained earnings - end of period                 $    65,038      $     1,941       $    65,038       $     1,941
                                                  ===========      ===========       ===========       ===========

Basic income per share:
   Income from continuing operations              $      0.44      $      0.21       $      0.73       $      0.69
   Income from discontinued operations                   0.01             0.01              0.02              0.03
                                                  -----------      -----------       -----------       -----------
   Net income                                     $      0.45      $      0.22       $      0.75       $      0.72
                                                  ===========      ===========       ===========       ===========

Diluted income per share:
   Income from continuing operations              $      0.43      $      0.20       $      0.71       $      0.67
   Income from discontinued operations                   0.01             0.01              0.02              0.03
                                                  -----------      -----------       -----------       -----------
   Net income                                     $      0.44      $      0.21       $      0.73       $      0.70
                                                  ===========      ===========       ===========       ===========

</TABLE>

     SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.



                                     - 3 -
<PAGE>

<TABLE>
<CAPTION>

                          COLUMBUS MCKINNON CORPORATION
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
                                                                             SIX MONTHS ENDED
                                                                             ----------------
                                                                      OCTOBER 1,         OCTOBER 2,
                                                                         2006               2005
                                                                      ----------        -----------
                                                                              (IN THOUSANDS)
OPERATING ACTIVITIES:
<S>                                                                   <C>               <C>
Income from continuing operations                                     $   13,529        $    10,157
Adjustments to reconcile income from
   continuing operations to net cash
   provided by operating activities:
     Depreciation and amortization                                         4,208              4,651
     Deferred income taxes                                                 8,710              1,795
     Gain on sale of real estate/investments                              (1,170)            (1,547)
     Loss on early retirement of bonds                                     3,780              2,407
     Stock compensation expense                                              866                  -
     Amortization/write-off of deferred financing costs                    1,148              1,563
     Changes in operating assets and liabilities:
           Trade accounts receivable and unbilled revenues                (1,934)              (417)
           Inventories                                                   (10,532)              (301)
           Prepaid expenses                                               (2,521)               (97)
           Other assets                                                     (258)              (202)
           Trade accounts payable                                          1,102              4,666
           Accrued and non-current liabilities                            (1,967)             1,487
                                                                      ----------        -----------
Net cash provided by operating activities                                 14,961             24,162
                                                                      ----------        -----------

INVESTING ACTIVITIES:
Sale of marketable securities, net                                           777                475
Capital expenditures                                                      (4,336)            (3,761)
Proceeds from sale of facilities and surplus real estate                   2,051              2,091
Proceeds from discontinued operations note receivable - revised              357                428
                                                                      ----------        -----------
Net cash used by investing activities                                     (1,151)              (767)
                                                                      ----------        -----------

FINANCING ACTIVITIES:
Proceeds from issuance of common stock/options exercised                   2,051              2,729
Net borrowings (payments) under revolving
     line-of-credit agreements                                             1,571             (1,110)
Repayment of debt                                                        (39,325)          (126,953)
Proceeds from issuance of long-term debt                                       -            136,000
Deferred financing costs incurred                                           (395)            (1,566)
Other                                                                        291                294
                                                                      ----------        -----------
Net cash (used) provided by financing activities                         (35,807)             9,394
EFFECT OF EXCHANGE RATE CHANGES ON CASH                                      576                267
                                                                      ----------        -----------
Net change in cash and cash equivalents                                  (21,421)            33,056
Cash and cash equivalents at beginning of period                          45,598              9,479
                                                                      ----------        -----------
Cash and cash equivalents at end of period                            $   24,177        $    42,535
                                                                      ==========        ===========
</TABLE>

     SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.


                                     - 4 -
<PAGE>

<TABLE>
<CAPTION>

                          COLUMBUS MCKINNON CORPORATION
            CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                                   (UNAUDITED)

                                                           THREE MONTHS ENDED               SIX MONTHS ENDED
                                                           ------------------               ----------------
                                                       OCTOBER 1,     OCTOBER 2,       OCTOBER 1,       OCTOBER 2,
                                                          2006           2005             2006             2005
                                                          ----           ----             ----             ----
                                                                              (IN THOUSANDS)

<S>                                                   <C>             <C>              <C>              <C>
Net income                                            $    8,314      $    3,263       $   13,886       $   10,585
                                                      ----------      ----------       ----------       ----------
Other comprehensive income (loss), net of tax:
   Foreign currency translation adjustments                  306           1,171            2,656           (1,974)
   Unrealized gain (loss) on investments:
     Unrealized holding gains arising
       during the period                                     536             653              329            1,024
     Reclassification adjustment for
       gains included in net income                         (153)           (541)            (469)            (991)
                                                      ----------      ----------       ----------       ----------
                                                             383             112             (140)              33
                                                      ----------      ----------       ----------       ----------
Total other comprehensive income (loss)                      689           1,283            2,516           (1,941)
                                                      ----------      ----------       ----------       ----------
Comprehensive income                                  $    9,003      $    4,546       $   16,402       $    8,644
                                                      ==========      ==========       ==========       ==========

</TABLE>

     SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.




                                     - 5 -
<PAGE>


                          COLUMBUS MCKINNON CORPORATION
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)
                (DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)
                                 OCTOBER 1, 2006

1.       DESCRIPTION OF BUSINESS

The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with U.S.  generally accepted  accounting  principles for
interim  financial  information.  In the opinion of management,  all adjustments
(consisting  of  normal  recurring  accruals)  considered  necessary  for a fair
presentation of the financial  position of Columbus  McKinnon  Corporation  (the
Company)  at October 1, 2006,  and the  results of its  operations  and its cash
flows for the three and  six-month  periods ended October 1, 2006 and October 2,
2005,  have been included.  Results for the period ended October 1, 2006 are not
necessarily  indicative  of the results  that may be expected for the year ended
March 31,  2007.  The balance  sheet at March 31, 2006 has been derived from the
audited  financial  statements  at that date,  but does not  include  all of the
information  and  footnotes  required  by  U.S.  generally  accepted  accounting
principles for complete financial statements. For further information,  refer to
the  consolidated  financial  statements and footnotes  thereto  included in the
Columbus  McKinnon  Corporation  annual  report on Form 10-K for the year  ended
March 31, 2006.

The  Company  is a  leading  manufacturer  and  marketer  of  material  handling
products,  systems and services which lift,  secure,  position and move material
ergonomically,  safely, precisely and efficiently.  Key products include hoists,
cranes,  chain and forged attachments.  The Company's material handling products
are  sold,   domestically  and  internationally,   principally  to  third  party
distributors  through  diverse  distribution  channels,  and to a lesser  extent
directly to manufacturers and other end-users. The Company's integrated material
handling  solutions  businesses  deal  primarily  with end  users  and sales are
concentrated,  domestically  and  internationally  (primarily  Europe),  in  the
consumer  products,  manufacturing,  warehousing  and, to a lesser  extent,  the
steel, construction, automotive and other industrial markets.

2.       STOCK BASED COMPENSATION

Effective April 1, 2006, the Company adopted SFAS 123(R), "Share-Based Payment,"
applying  the  modified   prospective   method.   This  Statement  requires  all
equity-based payments to employees,  including grants of employee stock options,
to be recognized in the statement of earnings based on the grant date fair value
of the award. Under the modified  prospective method, the Company is required to
record equity-based  compensation  expense for all awards granted after the date
of  adoption  and  for  the  unvested  portion  of  previously   granted  awards
outstanding as of the date of adoption.  The adoption of SFAS 123(R) resulted in
$68 and $866 of non-deductible incentive stock option expense in the quarter and
six months ended October 1, 2006,  respectively.  Stock compensation  expense is
included in cost of goods sold, selling, and general and administrative expense.
The Company uses a straight-line  method of attributing the value of stock-based
compensation expense, subject to minimum levels of expense, based on vesting.

In November  2005,  the FASB issued FSP No. FAS  123(R)-3,  Transition  Election
Related to Accounting for the Tax Effects of Share-Based  Payment  Awards.  This
FSP provides an elective alternative  simplified method for calculating the pool
of  excess  tax  benefits  available  to  absorb  tax  deficiencies   recognized
subsequent  to the  adoption of SFAS No.  123(R) and  reported in the  Condensed
Consolidated  Statements  of Cash Flows.  Companies may take up to one year from
the effective date of the FSP to evaluate the available transition  alternatives
and make a  one-time  election  as to which  method to  adopt.  The  Company  is
currently in the process of evaluating  the  alternative  methods of calculating
the pool of excess tax benefits.

LONG TERM INCENTIVE PLAN

Effective July 31, 2006, the  shareholders of the Company  approved the adoption
of our Long Term  Incentive  Plan  (LTIP).  The total number of shares of common
stock with respect to which awards may be granted under the plan is 850,000. The
LTIP was  designed as an omnibus  plan and awards may  consist of  non-qualified
stock options,  incentive stock options,  stock appreciation rights,  restricted
stock, restricted stock units, or stock bonuses. A maximum of 600,000 shares may
be awarded as restricted stock, restricted stock units, or stock bonuses.

                                     - 6 -
<PAGE>

During the first six months of fiscal 2007, a total of 9,390 shares of stock and
7,200  restricted  stock  units  were  granted  under the LTIP to the  Company's
non-executive  directors  as part of their  annual  compensation.  The  weighted
average fair value grant price of those shares and units was $19.17.

As of October 1, 2006,  there were 833,410  shares  available  for future grants
under the Long Term Incentive Plan.

STOCK OPTION PLANS

Existing  prior to the  adoption of the LTIP,  the Company  maintains  two stock
option plans,  a  Non-Qualified  Stock Option Plan  (Non-Qualified  Plan) and an
Incentive  Stock Option Plan (Incentive  Plan).  Under the  Non-Qualified  Plan,
options may be granted to  officers  and other key  employees  of the Company as
well as to  non-employee  directors  and  advisors.  As of October  1, 2006,  no
options  have  been  granted  to   non-employees.   Options  granted  under  the
Non-Qualified and Incentive Plans become  exercisable over a four-year period at
the  rate of 25% per  year  commencing  one  year  from  the date of grant at an
exercise  price of not less than  100% of the fair  market  value of the  common
stock on the date of grant. Any option granted under the Non-Qualified  Plan may
be exercised not earlier than one year from the date such option is granted. Any
option  granted under the  Incentive  Plan may be exercised not earlier than one
year and not later than 10 years from the date such option is granted.

FAIR VALUE OF STOCK OPTIONS

The fair value of stock options granted was estimated on the date of grant using
a Black-Scholes  option pricing model.  The  weighted-average  fair value of the
options was $13.30 for options  granted  during the six months ended  October 1,
2006. No options were granted  during the six months ended October 2, 2005.  The
following table provides the  weighted-average  assumptions  used to value stock
options granted during the six months ended October 1, 2006:

                                                     SIX MONTHS ENDED
                                                      OCTOBER 1, 2006
                                                  -----------------------
Assumptions:
     Risk-free interest rate....................              5.0 %
     Dividend yield--Incentive Plan.............              0.0 %
     Volatility factor..........................              0.595
     Expected life--Incentive Plan..............          5.5 years

To determine expected volatility,  the Company uses historical  volatility based
on daily closing prices of its Common Stock over periods that correlate with the
expected terms of the options granted. The risk-free rate is based on the United
States Treasury yield curve at the time of grant for the appropriate term of the
options  granted.  Expected  dividends  are based on the  Company's  history and
expectation of dividend payouts.  The expected term of stock options is based on
vesting schedules, expected exercise patterns and contractual terms.

STOCK OPTION ACTIVITY

The following table  summarizes  stock option activity  related to the Company's
previously existing stock option plans for the six months ended October 1, 2006:

<TABLE>
<CAPTION>

                                                                              WEIGHTED-AVERAGE
                                                                                 REMAINING
                                                         WEIGHTED-AVERAGE     CONTRACTUAL LIFE        AGGREGATE
                                          SHARES          EXERCISE PRICE         (IN YEARS)        INTRINSIC VALUE
                                      ----------------------------------------------------------------------------
<S>                                      <C>               <C>                          <C>        <C>
    Outstanding at March 31, 2006        1,132,118         $      11.28

       Granted                              50,000                22.98
       Exercised                          (168,468)               11.11
       Cancelled                           (27,500)                7.76
                                      ----------------------------------------------------------------------------
    Outstanding at October 1, 2006         986,150         $      12.00                 6.2        $      7,010
                                      ============================================================================
    Exercisable at October 1, 2006         588,025         $      12.92                 4.8        $      3,623
                                      ============================================================================
</TABLE>

                                     - 7 -
<PAGE>

We calculated intrinsic value for those options that had an exercise price lower
than the market price of our common shares as of October 1, 2006.  The aggregate
intrinsic  value of  outstanding  options as of October 1, 2006 is calculated as
the  difference  between the exercise  price of the  underlying  options and the
market price of our common shares for the 682,950 options that were in-the-money
at that date. The aggregate intrinsic value of exercisable options as of October
1, 2006 is  calculated  as the  difference  between  the  exercise  price of the
underlying  options  and the market  price of our common  shares for the 379,825
exercisable  options that were  in-the-money at that date. The Company's closing
stock price was $18.03 as of October 1, 2006. The total intrinsic value of stock
options  exercised during the first six months of fiscal 2007 was $2,529 ($2,415
for fiscal 2006). As of October 1, 2006, there are 149,600 options available for
future grants under the two stock option plans.

Cash received from option exercises under all share-based  payment  arrangements
for the six months ended October 1, 2006 was $1,871.  Proceeds from the exercise
of stock  options  under stock  option plans are credited to common stock at par
value and the excess is credited to additional paid-in capital.

As of October 1,  2006,  $1,679 of  unrecognized  compensation  cost  related to
non-vested  stock options is expected to be recognized  over a  weighted-average
period of approximately 3 years.

PRO FORMA INFORMATION UNDER SFAS N0. 123 FOR PERIODS PRIOR TO FISCAL 2007

Prior to April 1, 2006,  the Company  accounted for the stock option plans under
the  recognition  and  measurement  principles  of Accounting  Principles  Board
Opinion No. 25,  "Accounting for Stock Issued to Employees" (APB 25) and related
Interpretations.  No stock-based employee compensation cost was reflected in net
income,  as all options granted under these plans had an exercise price equal to
the market  value of the  underlying  common  stock on the date of grant and the
number of options granted was fixed.

The  Company's  net income  and  earnings  per share as if the fair value  based
method  had  been  applied  to all  outstanding  and  unvested  awards  for  the
comparable prior year periods is as follows:
<TABLE>
<CAPTION>

                                                          THREE MONTHS ENDED         SIX MONTHS ENDED
                                                            OCTOBER 2, 2005           OCTOBER 2, 2005
                                                        ------------------------   ----------------------
<S>                                                            <C>                        <C>
   Net income, as reported                                     $   3,263                  $ 10,585
   Deduct: Total stock-based employee
      compensation expense determined under
      fair value based method for all awards,
      net of related tax effects                                    (233)                     (579)
                                                        ------------------------   ----------------------
   Net income, pro forma                                       $   3,030                  $ 10,006
                                                        ========================   ======================

   Basic income per share:
   As reported                                                 $    0.22                  $   0.72
                                                        ========================   ======================
   Pro forma                                                   $    0.20                  $   0.68
                                                        ========================   ======================

   Diluted income per share:
   As reported                                                 $    0.21                  $   0.70
                                                        ========================   ======================
   Pro forma                                                   $    0.20                  $   0.66
                                                        ========================   ======================
</TABLE>

RESTRICTED STOCK

Also  existing  prior to the  adoption  of the LTIP,  the  Company  maintains  a
Restricted   Stock  Plan.   The  Company   charges   compensation   expense  and
shareholders'  equity for the market value of shares ratably over the restricted
period.  Grantees  that remain  continuously  employed  with the Company  become
vested in their shares five years after the date of the grant.  As of October 1,
2006,  there were 48,000 shares available for future grants under the Restricted
Stock Plan.

During the first six months of Fiscal 2007, no shares of  restricted  stock were
granted.  As of October  1, 2006,  there are 2,000  shares of  restricted  stock
outstanding with a weighted average fair value grant price of $16.25.


                                     - 8 -
<PAGE>

3.       INVENTORIES

Inventories consisted of the following:
                                             OCTOBER 1,          MARCH 31,
                                                2006               2006
                                             ----------        -----------
At cost - FIFO basis:
    Raw materials.....................       $   47,917        $    41,134
    Work-in-process...................           13,258             12,199
    Finished goods....................           36,866             33,424
                                             ----------        -----------
                                                 98,041             86,757
LIFO cost less than FIFO cost.........          (12,137)           (11,912)
                                             ----------        -----------
Net inventories.......................       $   85,904        $    74,845
                                             ==========        ===========

An actual  valuation of inventory  under the LIFO method can be made only at the
end of each  year  based  on the  inventory  levels  and  costs  at  that  time.
Accordingly, interim LIFO calculations must necessarily be based on management's
estimates of expected  year-end  inventory  levels and costs.  Because these are
subject to many forces beyond management's control,  interim results are subject
to the final year-end LIFO inventory valuation.


4.       RESTRUCTURING CHARGES

In the  second  quarter of fiscal  2006 we  completed  the sale of a  previously
closed facility which resulted in the reversal of $410 of restructuring  charges
within  the  Products  segment,  including  $216  of  gain  on  the  sale  of  a
non-operating  property  that had been  written  down in previous  periods.  The
liability as of October 2, 2005 consists primarily of environmental  remediation
costs which were accrued in accordance with SFAS No. 143.

The  following  table  provides  a  reconciliation  of the  activity  related to
restructuring reserves:
<TABLE>
<CAPTION>

                                                                     EMPLOYEE          FACILITY           TOTAL
                                                               -----------------------------------------------------
<S>                                                                <C>               <C>              <C>
    Reserve at March 31, 2006                                      $        59       $       734      $       793
    Fiscal 2007 first quarter restructuring charges                          4                 -                4
    Cash payments                                                          (51)              (78)            (129)
                                                               -----------------------------------------------------
    Reserve at July 2, 2006                                        $        12       $       656      $       668
    Fiscal 2007 second quarter restructuring charge reversal                 -              (410)            (410)
    Cash payments                                                          (12)              (41)             (53)
    Gain on sale of a non-operating facility                                 -               216              216
                                                               -----------------------------------------------------
    Reserve at October 1, 2006                                     $         -       $       421      $       421
                                                               =====================================================
</TABLE>

5.       NET PERIODIC BENEFIT COST

The following  table sets forth the components of net periodic  pension cost for
the Company's defined benefit pension plans:
<TABLE>
<CAPTION>

                                               THREE MONTHS ENDED                 SIX MONTHS ENDED
                                               ------------------                 ----------------
                                           OCTOBER 1,     OCTOBER 2,          OCTOBER 1,     OCTOBER 2,
                                              2006           2005                2006           2005
                                              ----           ----                ----           ----
<S>                                        <C>            <C>                 <C>            <C>
      Service costs....................    $   1,049      $   1,088           $   2,098      $   2,176
      Interest cost....................        1,878          1,737               3,757          3,474
      Expected return on plan assets...       (1,830)        (1,654)             (3,661)        (3,308)
      Net amortization.................          623            508               1,246          1,016
                                           ---------      ---------           ---------      ---------
      Net periodic pension cost........    $   1,720      $   1,679           $   3,440      $   3,358
                                           =========      =========           =========      =========
</TABLE>

                                     - 9 -
<PAGE>

For additional information on the Company's defined benefit pension plans, refer
to  Note 11 in the  consolidated  financial  statements  and  footnotes  thereto
included in the  Company's  annual  report on Form 10-K for the year ended March
31, 2006.

The following  table sets forth the  components  of net periodic  postretirement
benefit cost for the Company's defined benefit postretirement plans:
<TABLE>
<CAPTION>

                                               THREE MONTHS ENDED              SIX MONTHS ENDED
                                               ------------------              ----------------
                                             OCTOBER 1,   OCTOBER 2,        OCTOBER 1,   OCTOBER 2,
                                                2006         2005              2006         2005
                                                ----         ----              ----         ----
<S>                                            <C>          <C>               <C>          <C>
      Service costs......................      $    1       $    4            $    3       $    8
      Interest cost .....................         161          188               322          376
      Amortization of plan net losses....         100          101               200          202
                                               ------       ------            ------       ------
      Net periodic postretirement cost...      $  262       $  293            $  525       $  586
                                               ======       ======            ======       ======
</TABLE>

For  additional  information  on the Company's  defined  benefit  postretirement
benefit plans,  refer to Note 13 in the  consolidated  financial  statements and
footnotes  thereto  included in the Company's annual report on Form 10-K for the
year ended March 31, 2006.

6.       INCOME TAXES

Income tax expense as a percentage of income from continuing  operations  before
income tax expense  was 37.7%,  36.1%,  40.4%,  and 24.6% in the fiscal 2007 and
2006 quarters and the six-month periods then ended, respectively.  The six month
fiscal  2007  percentage  varies  from  the U.S.  statutory  rate due to $866 of
non-deductible  stock  option  expense in the period.  The six month fiscal 2006
percentage  varies  from  the U.S.  statutory  rate  due to the  utilization  of
domestic  net  operating  loss  carry-forwards  that  had been  fully  reserved.
Therefore,  income tax expense primarily  resulted from non-U.S.  taxable income
and state taxes on U.S.  taxable  income.  The effective  income tax rate in the
second  quarter of fiscal 2006 reflects the $3,330 loss on early  extinguishment
of debt which reduced U.S.  taxable  income,  but did not affect our tax expense
due to  the  existence  of  fully  reserved  U.S.  Federal  net  operating  loss
carry-forwards.  During the fourth  quarter of fiscal  2006,  as a result of the
improved  operating  performance of the Company over the past several years, the
Company  reevaluated  the  certainty as to whether the  Company's  remaining net
operating  loss  carryforwards  and other  deferred tax assets may ultimately be
realized.  As a result of the determination that it is more likely than not that
nearly all of the remaining deferred tax assets will be realized,  a significant
portion of the remaining  valuation allowance was reversed as of March 31, 2006.
As of  October  1,  2006,  the  Company  had U.S.  federal  net  operating  loss
carry-forwards of approximately $61,500.

7.       EARNINGS PER SHARE

The following table sets forth the computation of basic and diluted earnings per
share:
<TABLE>
<CAPTION>

                                                      THREE MONTHS ENDED                SIX MONTHS ENDED
                                                      ------------------                ----------------
                                                   OCTOBER 1,   OCTOBER 2,          OCTOBER 1,    OCTOBER 2,
                                                      2006         2005                2006          2005
                                                      ----         ----                ----          ----
Numerator for basic and diluted earnings per share:
<S>                                                 <C>          <C>                 <C>           <C>
  Net income                                        $  8,314     $  3,263            $ 13,886      $10,585
                                                    ========     ========            ========      =======

Denominators:
  Weighted-average common stock outstanding -
      denominator for basic EPS                       18,500       14,845              18,465       14,757

  Effect of dilutive employee stock options
      and awards                                         373          586                 452          470
                                                    --------     --------            --------      -------

  Adjusted weighted-average common stock
     outstanding and assumed conversions -
     denominator for diluted EPS                      18,873       15,431              18,917       15,227
                                                    ========     ========            ========      =======
</TABLE>

                                     - 10 -
<PAGE>


During the third  quarter of fiscal 2006,  the Company  registered an additional
3,350,000  shares of its common  stock which were sold at $20.00 per share.  The
number of shares  offered by the Company was  3,000,000 and 350,000 were offered
by a selling shareholder. The Company did not receive any proceeds from the sale
of shares by the selling shareholder.

8.       BUSINESS SEGMENT INFORMATION

As a result of the way the Company manages the business, its reportable segments
are strategic business units that offer products with different characteristics.
The  most  defining  characteristic  is the  extent  of  customized  engineering
required on a  per-order  basis.  In  addition,  the  segments  serve  different
customer bases through  differing  methods of distribution.  The Company has two
reportable  segments:  Products and Solutions.  The Company's  Products  segment
sells hoists, industrial cranes, chain, attachments, and other material handling
products  principally to third party distributors  through diverse  distribution
channels,  and to a lesser extent directly to end-users.  The Solutions  segment
sells  engineered  material  handling  systems such as conveyors and lift tables
primarily to end-users in the  consumer  products,  manufacturing,  warehousing,
and,  to a  lesser  extent,  the  steel,  construction,  automotive,  and  other
industrial  markets.   Intersegment  sales  are  not  significant.  The  Company
evaluates  performance  based on  operating  income of the  respective  business
units.

Segment  information  as of and for the six  months  ended  October  1, 2006 and
October 2, 2005, is as follows:
<TABLE>
<CAPTION>

                                                SIX MONTHS ENDED OCTOBER 1, 2006
                                                --------------------------------
                                         PRODUCTS          SOLUTIONS           TOTAL
                                         --------          ---------           -----
<S>                                    <C>                <C>               <C>
 Sales to external customers.......... $   257,176        $    33,743       $   290,919
 Income from operations...............      33,848                 36            33,884
 Depreciation and amortization........       3,775                433             4,208
 Total assets.........................     513,364             38,392           551,756

                                                SIX MONTHS ENDED OCTOBER 2, 2005
                                                --------------------------------
                                         PRODUCTS          SOLUTIONS           TOTAL
                                         --------          ---------           -----
 Sales to external customers.......... $   244,555        $    31,034       $   275,589
 Income from operations...............      26,820              1,069            27,889
 Depreciation and amortization........       4,059                592             4,651
 Total assets.........................     477,646             31,122           508,768

</TABLE>


                                     - 11 -
<PAGE>

9.       SUMMARY FINANCIAL INFORMATION

The following information sets forth the condensed consolidating summary
financial information of the parent and guarantors, which guarantee the 10%
Senior Secured Notes and the 8 7/8% Senior Subordinated Notes, and the
nonguarantors. The guarantors are wholly owned and the guarantees are full,
unconditional, joint and several.
<TABLE>
<CAPTION>

                                                       Parent     Guarantors  Nonguarantors  Eliminations Consolidated
                                                   --------------------------------------------------------------------
AS OF OCTOBER 1, 2006
Current assets:
<S>                                                  <C>          <C>           <C>           <C>          <C>
 Cash and cash equivalents                           $      971   $   (1,551)   $  24,757     $        -   $   24,177
 Trade accounts receivable and unbilled revenues         60,249          224       50,792              -      111,265
 Inventories                                             39,572       21,417       27,430         (2,515)      85,904
 Other current assets                                     4,978        1,427       11,811              -       18,216
                                                   --------------------------------------------------------------------
  Total current assets                                  105,770       21,517      114,790         (2,515)     239,562
 Property, plant, and equipment, net                     23,146       11,640       19,756              -       54,542
 Goodwill and other intangibles, net                     89,818       58,035       39,832              -      187,685
 Intercompany                                            85,704      (86,369)     (73,751)        74,416            -
 Other assets                                            87,276      197,328       25,499       (240,136)      69,967
                                                   --------------------------------------------------------------------
  Total assets                                       $  391,714   $  202,151    $ 126,126     $ (168,235)  $  551,756
                                                   ====================================================================


Current liabilities                                  $   43,177   $   18,787    $  47,407     $     (670)  $  108,701
 Long-term debt, less current portion                   164,836            -        3,384              -      168,220
 Other non-current liabilities                           15,778        8,682       26,233              -       50,693
                                                   --------------------------------------------------------------------
  Total liabilities                                     223,791       27,469       77,024           (670)     327,614

Shareholders' equity                                    167,923      174,682       49,102       (167,565)     224,142
                                                   --------------------------------------------------------------------
  Total liabilities and shareholders' equity         $  391,714   $  202,151    $ 126,126     $ (168,235)  $  551,756
                                                   ====================================================================



FOR THE SIX MONTHS ENDED OCTOBER 1, 2006
Net sales                                            $  141,257   $   85,164    $  89,388     $  (24,890)  $  290,919
Cost of products sold                                   104,169       63,432       66,758        (24,740)     209,619
                                                   --------------------------------------------------------------------
Gross profit                                             37,088       21,732       22,630           (150)      81,300
                                                   --------------------------------------------------------------------
Selling, general and administrative expenses             21,477        8,470       17,788              -       47,735
Restructuring charges                                      (406)           -            -              -         (406)
Amortization of intangibles                                  52            1           34              -           87
                                                   --------------------------------------------------------------------
                                                         21,123        8,471       17,822              -       47,416
                                                   --------------------------------------------------------------------
Income (loss) from operations                            15,965       13,261        4,808           (150)      33,884
Interest and debt expense                                 6,572        1,968          148              -        8,688
Other (income) and expense, net                           4,221         (406)      (1,311)             -        2,504
                                                   --------------------------------------------------------------------
Income (loss) before income tax expense                   5,172       11,699        5,971           (150)      22,692
Income tax expense                                        2,246        4,653        2,264              -        9,163
                                                   --------------------------------------------------------------------
Income (loss) from continuing operations                  2,926        7,046        3,707           (150)      13,529
Income from discontinued operations                         357            -            -              -          357
                                                   --------------------------------------------------------------------
Net income (loss)                                    $    3,283   $    7,046    $   3,707     $     (150)  $   13,886
                                                   ====================================================================




                                     - 12 -
<PAGE>


                                                       Parent     Guarantors  Nonguarantors  Eliminations Consolidated
                                                   --------------------------------------------------------------------
FOR THE SIX MONTHS ENDED OCTOBER 1, 2006
OPERATING ACTIVITIES:
Net cash provided by operating activities            $   14,203   $      171    $     587     $        -   $   14,961
                                                   --------------------------------------------------------------------

INVESTING ACTIVITIES:
Sale of marketable securities, net                            -            -          777              -          777
Capital expenditures                                     (2,394)        (588)      (1,354)             -       (4,336)
Proceeds from sale of facilities and surplus real
     estate                                               1,655          396            -              -        2,051
Proceeds from discontinued operations note
     receivable - revised                                   357            -            -              -          357
                                                   --------------------------------------------------------------------
Net cash used by investing activities                      (382)        (192)        (577)             -       (1,151)
                                                   --------------------------------------------------------------------

FINANCING ACTIVITIES:
Proceeds from stock options exercised                     2,051            -            -              -        2,051
Net borrowings under revolving
     line-of-credit agreements                                -            -        1,571              -        1,571
(Repayment) borrowings of debt                          (42,328)           -        3,003              -      (39,325)
Deferred financing costs incurred                          (395)           -            -              -         (395)
Other                                                       291            -            -              -          291
                                                   --------------------------------------------------------------------
Net cash (used) provided by financing
     activities                                         (40,381)           -        4,574              -      (35,807)
EFFECT OF EXCHANGE RATE CHANGES ON CASH                       -          (69)         645              -          576
                                                   --------------------------------------------------------------------
Net change in cash and cash equivalents                 (26,560)         (90)       5,229              -      (21,421)
Cash and cash equivalents at beginning of period         27,531       (1,461)      19,528              -       45,598
                                                   --------------------------------------------------------------------
Cash and cash equivalents at end of period           $      971   $   (1,551)   $  24,757     $        -   $   24,177
                                                   ====================================================================




AS OF MARCH 31, 2006
Current assets:
 Cash and cash equivalents                           $   27,531    $  (1,461)    $ 19,528     $        -   $   45,598
 Trade accounts receivable and unbilled revenues         60,808          157       46,822              -      107,787
 Inventories                                             32,708       18,177       26,325         (2,365)      74,845
 Other current assets                                     4,777        1,446        8,903            550       15,676
                                                   --------------------------------------------------------------------
  Total current assets                                  125,824       18,319      101,578         (1,815)     243,906
 Property, plant, and equipment, net                     24,651       11,703       18,778              -       55,132
 Goodwill and other intangibles, net                     89,808       58,036       39,483              -      187,327
 Intercompany                                            92,325      (93,637)     (73,697)        75,009            -
 Other assets                                            96,548      197,328       25,939       (240,136)      79,679
                                                   --------------------------------------------------------------------
  Total assets                                       $  429,156    $ 191,749     $112,081     $ (166,942)  $  566,044
                                                   ====================================================================


Current liabilities                                  $   48,146    $  15,368     $ 43,306     $      473   $  107,293
 Long-term debt, less current portion                   203,384            -          457              -      203,841
 Other non-current liabilities                           16,305        8,676       25,508              -       50,489
                                                   --------------------------------------------------------------------
  Total liabilities                                     267,835       24,044       69,271            473      361,623

Shareholders' equity                                    161,321      167,705       42,810       (167,415)     204,421
                                                   --------------------------------------------------------------------
  Total liabilities and shareholders' equity         $  429,156    $ 191,749     $112,081     $ (166,942)  $  566,044
                                                   ====================================================================


                                     - 13 -
<PAGE>

                                                       Parent     Guarantors  Nonguarantors  Eliminations Consolidated
                                                   --------------------------------------------------------------------
FOR THE SIX MONTHS ENDED OCTOBER 2, 2005
Net sales                                            $  133,203   $   74,059    $  80,228     $  (11,901)  $  275,589
Cost of products sold                                    99,422       55,921       59,041        (10,496)     203,888
                                                   --------------------------------------------------------------------
Gross profit                                             33,781       18,138       21,187         (1,405)      71,701
Selling, general and administrative expenses             20,193        8,014       15,245              -       43,452
Restructuring charges                                       159            -           78              -          237
Amortization of intangibles                                  88            1           34              -          123
                                                   --------------------------------------------------------------------
                                                         20,440        8,015       15,357              -       43,812
                                                   --------------------------------------------------------------------
Income (loss) from operations                            13,341       10,123        5,830         (1,405)      27,889
Interest and debt expense                                10,929        2,254          166              -       13,349
Other (income) and expense, net                           2,904           28       (1,857)             -        1,075
                                                   --------------------------------------------------------------------
(Loss) income before income tax expense                    (492)       7,841        7,521         (1,405)      13,465
Income tax expense                                          349          683        2,276              -        3,308
                                                   --------------------------------------------------------------------
(Loss) income from continuing operations                   (841)       7,158        5,245         (1,405)      10,157
Income from discontinued operations                         428            -            -              -          428
                                                   --------------------------------------------------------------------
Net (loss) income                                    $     (413)  $    7,158    $   5,245     $   (1,405)  $   10,585
                                                   ====================================================================



FOR THE SIX MONTHS ENDED OCTOBER 2, 2005
OPERATING ACTIVITIES:
Net cash provided by operating activities            $    7,543   $    8,507    $   8,112     $        -   $   24,162
                                                   --------------------------------------------------------------------

INVESTING ACTIVITIES:
Sale of marketable securities, net                            -            -          475              -          475
Capital expenditures                                     (2,030)        (644)      (1,087)             -       (3,761)
Proceeds from sale of facilities and surplus real
     estate                                                   -          468        1,623              -        2,091
Proceeds from discontinued operations note
     receivable - revised                                   428            -            -              -          428
                                                   --------------------------------------------------------------------
Net cash (used) provided by investing activities         (1,602)        (176)       1,011              -         (767)
                                                   --------------------------------------------------------------------

FINANCING ACTIVITIES:
Proceeds from stock options exercised                     2,729            -            -              -        2,729
Net borrowings (payments) under revolving
     line-of-credit agreements                              240            -       (1,350)             -       (1,110)
Repayment of debt                                      (126,831)           -         (122)             -     (126,953)
Proceeds from issuance of long-term debt                136,000            -            -              -      136,000
Deferred financing costs incurred                        (1,566)           -            -              -       (1,566)
Dividends paid                                            8,854       (8,854)           -              -            -
Other                                                       294            -            -              -          294
                                                   --------------------------------------------------------------------
Net cash provided (used) by financing activities         19,720       (8,854)      (1,472)             -        9,394
EFFECT OF EXCHANGE RATE CHANGES ON CASH                    (257)          11          513              -          267
                                                   --------------------------------------------------------------------
Net change in cash and cash equivalents                  25,404         (512)       8,164              -       33,056
Cash and cash equivalents at beginning of period          1,019         (697)       9,157              -        9,479
                                                   --------------------------------------------------------------------
Cash and cash equivalents at end of period           $   26,423   $   (1,209)   $  17,321     $        -   $   42,535
                                                   ====================================================================

</TABLE>

                                     - 14 -
<PAGE>

10.      LOSS CONTINGENCIES

Like many industrial manufacturers,  the Company is involved in asbestos-related
litigation.   In  continually   evaluating   costs  relating  to  its  estimated
asbestos-related  liability,  the  Company  reviews,  among  other  things,  the
incidence of past and recent claims, the historical case dismissal rate, the mix
of the claimed  illnesses  and  occupations  of the  plaintiffs,  its recent and
historical  resolution of the cases, the number of cases pending against it, the
status and  results of  broad-based  settlement  discussions,  and the number of
years such  activity  might  continue.  Based on this  review,  the  Company has
estimated its share of liability to defend and resolve probable asbestos-related
personal injury claims. This estimate is highly uncertain due to the limitations
of the available data and the  difficulty of forecasting  with any certainty the
numerous variables that can affect the range of the liability.  The Company will
continue to study the variables in light of additional  information  in order to
identify  trends that may become evident and to assess their impact on the range
of liability that is probable and estimable.

Based on actuarial  information,  the Company has estimated its asbestos-related
aggregate  liability  through March 31, 2032 and March 31, 2083 to range between
$4,600 and $22,800 using actuarial  parameters of continued  claims for a period
of 25 to 76 years. The Company's  estimation of its  asbestos-related  aggregate
liability  that is probable and  estimable,  in accordance  with U.S.  generally
accepted accounting principles, is through March 31, 2032 and ranges from $7,000
to $8,000 as of October 1, 2006.  The range of probable and estimable  liability
reflects  uncertainty  in the number of future claims that will be filed and the
cost to resolve  those  claims,  which may be influenced by a number of factors,
including  the  outcome  of the  ongoing  broad-based  settlement  negotiations,
defensive  strategies,  and the cost to resolve claims  outside the  broad-based
settlement program. Based on the underlying actuarial  information,  the Company
has reflected $7,500 as a liability in the consolidated  financial statements in
accordance with U.S.  generally  accepted  accounting  principles.  The recorded
liability  does not  consider  the  impact of any  potential  favorable  federal
legislation such as the "FAIR Act". Of this amount,  management expects to incur
asbestos  liability  payments  of  approximately  $300 over the next 12  months.
Because payment of the liability is likely to extend over many years, management
believes that the potential additional costs for claims will not have a material
after-tax  effect on the  financial  condition of the Company or its  liquidity,
although the net after-tax  effect of any future  liabilities  recorded could be
material to earnings in a future period.


11.      OTHER (INCOME) AND EXPENSE, NET

The following  table sets forth the  components  of other  (income) and expense,
net:
<TABLE>
<CAPTION>

                                                THREE MONTHS ENDED                SIX MONTHS ENDED
                                                ------------------                ----------------
                                              OCTOBER 1,   OCTOBER 2,          OCTOBER 1,   OCTOBER 2,
                                                 2006         2005                2006         2005
                                                 ----         ----                ----         ----
<S>                                            <C>          <C>                 <C>          <C>
      Cost of bond redemptions...............  $     -      $ 3,341             $ 4,583      $ 3,329
      Investment income .....................     (312)        (690)               (786)      (1,266)
      Interest income........................     (203)        (223)               (605)        (380)
      Gain on sale of real estate............     (396)        (469)               (396)        (469)
      Other..................................     (155)         (95)               (292)        (139)
                                               -------      -------             -------      -------
      Total other (income) and expense, net..  $(1,066)     $ 1,864             $ 2,504      $ 1,075
                                               =======      =======             =======      =======
</TABLE>

12.      NEW ACCOUNTING STANDARDS

In  June  2006,  the  Financial   Accounting   Standards   Board  (FASB)  issued
Interpretation  No. 48 (FIN 48),  "Accounting  for Uncertainty in Income Taxes".
FIN 48 is an  interpretation  of FASB Statement No. 109  "Accounting  for Income
Taxes" and must be adopted  by the  Company no later than April 1, 2007.  FIN 48
prescribes a comprehensive  model for recognizing,  measuring,  presenting,  and
disclosing in the financial  statements uncertain tax positions that the company
has taken or expects to take in its tax returns.  The Company is  assessing  the
impact the adoption of FIN 48 will have on the Company's  consolidated financial
position and results of operations.


                                     - 15 -
<PAGE>


In September 2006, the FASB issued Statement of Financial  Accounting  Standards
(SFAS) No. 157,  "Fair Value  Measurements,"  to define fair value,  establish a
framework  for  measuring  fair  value in  accordance  with  generally  accepted
accounting  principles,  and expand  disclosures about fair value  measurements.
SFAS No. 157 will be effective  for fiscal years  beginning  after  November 15,
2007. The Company is assessing the impact the adoption of SFAS No. 157 will have
on the Company's consolidated financial position and results of operations.

In September  2006,  the FASB issued SFAS No. 158,  "Employers'  Accounting  for
Defined  Benefit  Pension and Other  Postretirement  Plans, an amendment of FASB
Statements No. 87, 88, 106, and 132(R)" (SFAS 158). Among other items,  SFAS 158
requires  recognition  of the  overfunded or  underfunded  status of an entity's
defined  benefit  postretirement  plan as an asset or liability in the financial
statements,  requires the  measurement of defined  benefit  postretirement  plan
assets and obligations as of the end of the employer's fiscal year, and requires
recognition  of the funded  status of defined  benefit  postretirement  plans in
other  comprehensive  income.  SFAS 158 is effective as of the end of the fiscal
year ending after  December 15,  2006.  The Company is assessing  the impact the
adoption  of SFAS No.  158 will  have on the  Company's  consolidated  financial
position and results of operations.



                                     - 16 -
<PAGE>




Item 2.              MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  RESULTS OF OPERATIONS AND FINANCIAL CONDITION
                          (DOLLAR AMOUNTS IN THOUSANDS)

EXECUTIVE OVERVIEW

We are a leading manufacturer and marketer of hoists, cranes, chain,  conveyors,
material  handling  systems,  lift  tables and  component  parts  serving a wide
variety of commercial and industrial end-user markets.  Our products are used to
efficiently and ergonomically  move, lift, position or secure objects and loads.
Our Products segment sells a wide variety of powered and manually  operated wire
rope and chain hoists,  industrial crane systems,  chain, hooks and attachments,
actuators and rotary unions.  Our Solutions segment designs,  manufactures,  and
installs   application-specific   or  standard  material  handling  systems  and
solutions for end-users to improve work station and facility-wide work flow.

Founded  in 1875,  we have grown to our  current  size and  leadership  position
through  organic growth and the  acquisition of 14 businesses  between  February
1994 and April 1999.  We have  developed  our leading  market  position over our
131-year  history  by  emphasizing   technological   innovation,   manufacturing
excellence  and  superior  after-sale  service.  In addition,  the  acquisitions
significantly  broadened  our  product  lines  and  services  and  expanded  our
geographic  reach,  end-user markets and customer base.  Ongoing  integration of
these  businesses  includes  improving our  productivity and extending our sales
activities  to the  European  and Asian  marketplaces.  We are  executing  those
initiatives through our Lean Manufacturing  efforts, new product development and
expanded sales activities.  Shareholder value will be enhanced through continued
emphasis on improvement of the fundamentals including manufacturing  efficiency,
cost  containment,  efficient capital  investment,  market expansion and renewed
customer focus.

We  maintain a strong  domestic  market  share with  significant  leading  North
American  market  positions  in  hoists,  lifting  and sling  chain,  and forged
attachments.  To broaden our product  offering in markets where we have a strong
competitive  position as well as to facilitate  penetration  into new geographic
markets,  we  have  heightened  our new  product  development  activities.  This
includes  the recent  introduction  of powered  hoist lines in  accordance  with
international  standards,  to complement our current  offering of hoist products
designed in accordance with U.S. standards.  To further expand our global sales,
we  are  introducing  certain  of  our  products  that  historically  have  been
distributed  only in North America and also introducing new products through our
existing European distribution network.  Furthermore,  we are working to build a
distribution  network  in China to  capture an  anticipated  growing  demand for
material handling  products as that economy continues to industrialize.  We have
recently   reorganized  our  management  team  to  align  with  these  strategic
initiatives.  These  investments in  international  markets and new products are
part of our focus on our greatest  opportunities  for growth.  Our overall order
growth rate of approximately 9% for the first six months of fiscal 2007 compared
to fiscal 2006 was a combination of increasing domestic organic sales growth and
increasing  global sales as a result of our  expanding  presence in emerging and
existing  international  markets.  Management  monitors U.S. Industrial Capacity
Utilization,  which has been  increasing  since July 2003,  as an  indicator  of
anticipated  demand for out  product.  In  addition,  we continue to monitor the
potential  impact of other global and domestic  trends,  including energy costs,
steel price  fluctuations,  interest rates and activity in a variety of end-user
markets around the globe.

Our  Lean   Manufacturing   efforts   continue  to   fundamentally   change  our
manufacturing  processes to be more  responsive  to customer  demand and improve
on-time  delivery  and  productivity.  From  2001 to  2004  under  our  facility
rationalization  program,  we  closed 13  facilities  and  consolidated  several
product lines,  with potential  opportunity for further  rationalization.  These
activities  are driving our operating  leverage.  In furtherance of our facility
rationalization  projects,  we completed the sale of several  excess  properties
during  fiscal 2006 and the first six months of fiscal 2007,  generating  $4,100
from real estate sales which has been, and will continue to be used to repay our
outstanding debt.

We keep a close watch on the costs for fringe benefits such as health insurance,
workers  compensation  insurance and pension.  Combined,  those benefits cost us
over $35,000 in fiscal 2006 and we work  diligently to balance cost control with
the need to provide  competitive  employee benefits packages for our associates.
Another cost area of focus is steel. We utilize approximately $40,000 to $45,000
of steel annually in a variety of forms including rod, wire, bar, structural and
others. With increases in worldwide demand for steel and fluctuating scrap steel
prices,  we  experienced  fluctuations  in our costs that we  reflected as price
increases to our customers. We will continue to monitor our costs and reevaluate


                                     - 17 -
<PAGE>

our pricing policies.  We continue to operate in a highly  competitive  business
environment  in the markets and  geographies  served.  Our  performance  will be
impacted by our ability to address a variety of challenges and  opportunities in
those markets and geographies, including trends towards increased utilization of
the global  labor force and the  expansion of market  opportunities  in Asia and
other emerging markets.

RESULTS OF OPERATIONS

THREE MONTHS AND SIX MONTHS ENDED OCTOBER 1, 2006 AND OCTOBER 2, 2005
Net sales in the fiscal 2007 quarter  ended  October 1, 2006 were  $144,225,  up
$9,513 or 7.1% from the fiscal 2006 quarter ended October 2, 2005. Net sales for
the six months ended  October 1, 2006 were  $290,919,  an increase of $15,330 or
5.6% from the six months ended  October 2, 2005.  Sales in the Products  segment
increased by $8,363 or 6.9% from the previous year's quarter and $12,621 or 5.2%
from the previous year's six-month period then ended. These increases are due to
the continued strength of the U.S. and European  industrial  markets, as well as
the impact of price increases of $1,100 and $3,400 in the quarter and six months
ended  October  1,  2006,  respectively.   Translation  of  foreign  currencies,
particularly the Euro and Canadian dollar,  into U.S. dollars contributed $1,200
and $2,300  toward the  Products  segment  increase in sales for the quarter and
six-month  period ended  October 1, 2006,  respectively.  Sales in the Solutions
segment  increased 8.2% or $1,150 for the quarter and 8.7% or $2,709 for the six
months ended  October 1, 2006 when  compared  with the same periods in the prior
year.  The  increase  in this  segment  is due to  increased  volume at our tire
shredder division and in our European conveyor business.  Translation of foreign
currencies  into U.S.  dollars  contributed  $300 and $100 toward the  Solutions
segment  increase in sales for the quarter and six-months ended October 1, 2006.
Sales in the segments are summarized as follows:
<TABLE>
<CAPTION>

                                 THREE MONTHS ENDED                             SIX MONTHS ENDED
                                 ------------------                             ----------------
                       OCT. 1,      OCT. 2,         CHANGE           OCT. 1,      OCT. 2,          CHANGE
                        2006         2005       AMOUNT     %          2006         2005        AMOUNT     %
                        ----         ----       ------    --          ----         ----        ------    ---
<S>                 <C>          <C>           <C>        <C>     <C>           <C>          <C>         <C>
Products            $  129,037   $  120,674    $  8,363   6.9     $  257,176    $ 244,555    $  12,621   5.2
Solutions               15,188       14,038       1,150   8.2         33,743       31,034        2,709   8.7
                    ----------   ----------    --------           ----------    ---------    ---------
Net sales           $  144,225   $  134,712    $  9,513   7.1     $  290,919    $ 275,589    $  15,330   5.6
                    ==========   ==========    ========           ==========    =========    =========
</TABLE>


Gross profits and gross profit  margins by operating  segment are  summarized as
follows:
<TABLE>
<CAPTION>

                                      THREE MONTHS ENDED                            SIX MONTHS ENDED
                                      ------------------                            ----------------
                               OCT. 1, 2006        OCT. 2, 2005             OCT. 1, 2006        OCT. 2, 2005
                               ------------        ------------             ------------        ------------
                                  $        %          $        %               $        %          $        %
                                 ---      ---        ---      ---             ---      ---        ---      ---
<S>                          <C>         <C>     <C>         <C>          <C>         <C>     <C>         <C>
Products                     $  37,896   29.4    $  32,665   27.1         $  77,313   30.1    $  66,885   27.3
Solutions                        1,121    7.4        2,493   17.8             3,987   11.8        4,816   15.5
                             ---------           ---------                ---------           ---------
Total Gross Profit           $  39,017   27.1    $  35,158   26.1         $  81,300   27.9    $  71,701   26.0
                             =========           =========                =========           =========
</TABLE>

The increase in the gross profit  margin for the Products  segment is the result
of product mix,  the  realization  of  operational  leverage at increased  sales
volumes and ongoing cost  containment  activities.  The Solutions  segment gross
profit margin was impacted by weak performance at our European conveyor business
as a result of cost  overruns on one specific  project,  less than desired order
activity, and unfavorable project mix.

Selling expenses were $14,739,  $13,080, $30,106, and $26,738 in the fiscal 2007
and 2006  quarters  and the  six-month  periods  then ended,  respectively.  The
changes in expense dollars were impacted by increased  investment in new markets
($450 and $800 for the  quarter  and  six-month  period  ended  October 1, 2006,
respectively), translation from changes in foreign exchange rates ($200 and $400
for the quarter and six-month  period ended October 1, 2006,  respectively)  and
increased  variable  selling  costs as a  result  of  higher  sales  volume  and
execution of our strategic growth initiates. As a percentage of consolidated net
sales, selling expenses were 10.2%, 9.7%, 10.3%, and 9.7% in the fiscal 2007 and
2006 quarters and the six-month periods then ended, respectively.


                                     - 18 -
<PAGE>


General and administrative expenses were $8,540, $8,539, $17,629, and $16,714 in
the  fiscal  2007  and 2006  quarters  and the  six-month  periods  then  ended,
respectively.  The fiscal 2007  six-month data is higher than the prior year due
to the result of stock based compensation expense ($450), increased research and
development ($350), and increased  training,  recruiting and relocation expenses
($300).  As a percentage of consolidated net sales,  general and  administrative
expenses were 5.9%, 6.3%, 6.1% and 6.1% in the fiscal 2007 and 2006 quarters and
the six-month periods then ended, respectively.

Restructuring charges were ($410), $211, ($406), and $237 in the fiscal 2007 and
2006 quarters and the six-month periods then ended,  respectively.  The reversal
of  restructuring  charges in fiscal 2007 resulted from the sale of a previously
closed  facility and included  $216 of gain on the sale of the property that had
been written down in previous periods.

Amortization  of intangibles  was $44, $61, $87, and $123 in the fiscal 2007 and
2006 quarters and the six-month periods then ended, respectively.

Interest and debt expense was $4,176,  $6,633, $8,688, and $13,349 in the fiscal
2007 and 2006 quarters and the six-month periods then ended, respectively. These
decreases are the result of lower debt levels.  As a percentage of  consolidated
net sales, interest and debt expense was 2.9%, 4.9%, 3.0% and 4.8% in the fiscal
2007 and 2006 quarters and the six-month periods then ended, respectively.

Other (income) and expense, net was ($1,066),  $1,864,  $2,504 and $1,075 in the
fiscal  2007  and  2006   quarters  and  the   six-month   periods  then  ended,
respectively.  The following  table sets forth the  components of other (income)
and expense, net:

<TABLE>
<CAPTION>

                                                THREE MONTHS ENDED                SIX MONTHS ENDED
                                                ------------------                ----------------
                                              OCTOBER 1,   OCTOBER 2,          OCTOBER 1,   OCTOBER 2,
                                                 2006         2005                2006         2005
                                                 ----         ----                ----         ----
<S>                                            <C>          <C>                 <C>          <C>
      Cost of bond redemptions...............  $     -      $ 3,341             $ 4,583      $ 3,329
      Investment income .....................     (312)        (690)               (786)      (1,266)
      Interest income........................     (203)        (223)               (605)        (380)
      Gain on sale of real estate............     (396)        (469)               (396)        (469)
      Other..................................     (155)         (95)               (292)        (139)
                                               -------      -------             -------      -------
      Total other (income) and expense, net..  $(1,066)     $ 1,864             $ 2,504      $ 1,075
                                               =======      =======             =======      =======
</TABLE>

Income tax expense as a percentage of income from continuing  operations  before
income tax expense  was 37.7%,  36.1%,  40.4%,  and 24.6% in the fiscal 2007 and
2006 quarters and the six-month periods then ended, respectively.  The six month
fiscal  2007  percentage  varies  from  the U.S.  statutory  rate due to $866 of
non-deductible  stock  option  expense in the period.  The six month fiscal 2006
percentage  varies  from  the U.S.  statutory  rate  due to the  utilization  of
domestic  net  operating  loss  carry-forwards  that  had been  fully  reserved.
Therefore,  income tax expense primarily  resulted from non-U.S.  taxable income
and state taxes on U.S. taxable income.  The higher effective income tax rate in
the  second   quarter  of  fiscal  2006   reflects  the  $3,330  loss  on  early
extinguishment of debt which reduced U.S. taxable income, but did not affect our
tax expense due to the existence of fully  reserved  U.S.  Federal net operating
loss  carry-forwards.  During the fourth  quarter of fiscal 2006, as a result of
the improved  operating  performance of the Company over the past several years,
the Company  reevaluated the certainty as to whether the Company's remaining net
operating  loss  carryforwards  and other  deferred tax assets may ultimately be
realized.  As a result of the determination that it is more likely than not that
nearly all of the remaining deferred tax assets will be realized,  a significant
portion of the remaining  valuation allowance was reversed as of March 31, 2006.
As of  October  1,  2006,  the  Company  had U.S.  federal  net  operating  loss
carry-forwards of approximately $61,500.


                                     - 19 -
<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

Cash and cash  equivalents  totaled  $24,177 at October 1, 2006,  an increase of
$4,250 from the July 2, 2006 balance of $19,927.

Net cash provided by operating  activities  was $14,961 for the six months ended
October 1, 2006  compared to $24,162 for the six months  ended  October 2, 2005.
The $9,201  decrease is the result of $21,246 of changes in net working  capital
components,  primarily  $10,532 of  increased  inventory  (a surge in demand for
larger capacity equipment, timing of offshore purchases, buying ahead of a known
price increase, and adjustments for longer lead times on certain types of steel)
and  decreased  accounts  payable  and accrued  liabilities,  offset by a $3,372
increase  in income  from  continuing  operations,  and $6,915  increase  in the
benefit from deferred income taxes.

Net cash used in  investing  activities  was  $1,151  for the six  months  ended
October 1, 2006 compared to $767 for the six months ended  October 2, 2005.  The
$384  increase  in net cash used in  investing  activities  was the result of an
increase in capital  expenditures to $4,336 in fiscal 2007 compared to $3,761 in
fiscal 2006.

Net cash used in  financing  activities  was  $35,807  for the six months  ended
October 1, 2006 compared to $9,394 of net cash provided by financing  activities
for the six  months  ended  October  2,  2005.  The net cash  used in  financing
activities for the six months ended October 1, 2006 consisted of $39,325 of debt
repayments,  partially  offset by $2,051 of proceeds from the issuance of common
stock and stock options exercised, and $1,571 of borrowings under revolving line
of credit agreements.  The net cash provided by financing activities for the six
months ended October 2, 2005 consisted of $136,000 of proceeds from the issuance
of long term debt, and $2,729 of proceeds from stock options  exercised,  offset
by  $126,953 of debt  repayments,  $1,110 of payments  under  revolving  line of
credit agreements and $1,566 of deferred financing costs incurred in association
with our issuance of the 8 7/8% Notes.

We believe that our cash on hand, cash flows,  and borrowing  capacity under our
Revolving Credit Facility will be sufficient to fund our ongoing  operations and
budgeted capital  expenditures for at least the next twelve months.  This belief
is  dependent  upon a steady  economy and  successful  execution  of our current
business plan which includes focus on cash  generation for debt  repayment.  The
business plan includes continued  implementation of new market penetration,  new
product   development,   lean   manufacturing   and  improving  working  capital
utilization.

In March 2006, we entered into a new Revolving  Credit  Facility  which provides
availability  up to a maximum of  $75,000.  Provided  there is no  default,  the
Company  may request an increase in the  availability  of the  Revolving  Credit
Facility by an amount not exceeding $50,000 if all Senior Secured 10% Notes (10%
Notes) have been repaid in full or will be repaid in full contemporaneously with
such  increase,  or $25,000 in the event that any 10% Notes remain  outstanding.
The Revolving Credit Facility  matures February 2010,  however the maturity date
can be  extended  to  February  2011  based on  certain  conditions  related  to
outstanding balances and maturity dates of the 10% Notes.

The unused portion of the Revolving  Credit  Facility  totaled  $64,038,  net of
outstanding  borrowings of zero and outstanding  letters of credit of $10,962 as
of October 1, 2006.  Interest  is payable at a  Eurodollar  Rate or a prime rate
plus an  applicable  margin  determined  by our leverage  ratio.  At our current
leverage ratio, we qualify for the lowest applicable margin level, which amounts
to 87.5 basis points for  Eurodollar  borrowings and zero basis points for prime
rate based borrowings.  The Revolving Credit Facility is secured by all domestic
inventory,  receivables,  equipment, real property, subsidiary stock (limited to
65% for foreign  subsidiaries)  and  intellectual  property.  The  corresponding
credit  agreement  associated with the Revolving  Credit Facility places certain
debt covenant restrictions on us, including certain financial requirements and a
restriction on dividend payments.

The Senior  Subordinated 8 7/8% Notes (8 7/8% Notes) issued on September 2, 2005
amounted to $136,000  and are due  November  1, 2013.  Provisions  of the 8 7/8%
Notes include,  without limitation,  restrictions on indebtedness,  asset sales,
and  dividends and other  restricted  payments.  Until  November 1, 2008, we may
redeem up to 35% of the outstanding notes at a redemption price of 108.875% with
the proceeds of equity offerings,  subject to certain restrictions.  On or after
November 1, 2009,  the 8 7/8% Notes are redeemable at the option of the Company,


                                     - 20 -
<PAGE>

in whole or in part, at prices  declining  annually from the 104.438% to 100% on
and after  November 1, 2011.  In the event of a Change of Control (as defined in
the indenture for such notes), each holder of the 8 7/8% Notes may require us to
repurchase  all or a portion of such  holder's 8 7/8% Notes at a purchase  price
equal to 101% of the principal  amount thereof.  The 8 7/8% Notes are guaranteed
by certain existing and future domestic  subsidiaries and are not subject to any
sinking fund requirements.

The Senior  Secured  10% Notes (10% Notes)  issued on July 22, 2003  amounted to
$28,836 as of October 1, 2006 and are due August 1, 2010. During October 2006 we
purchased an additional  $3,000 of the 10% Notes in the open market.  Provisions
of the 10% Notes include,  without  limitation,  restrictions  on  indebtedness,
restricted  payments,  asset  and  subsidiary  stock  sales,  liens,  and  other
restricted transactions.  The remaining 10% Notes are not entitled to redemption
at our option,  prior to August 1, 2007.  On and after August 1, 2007,  they are
redeemable at prices declining  annually to 100% on and after August 1, 2009. In
the event of a Change of Control (as defined in the  indenture  for such notes),
each  holder of the 10% Notes may require us to  repurchase  all or a portion of
such  holder's  10% Notes at a  purchase  price  equal to 101% of the  principal
amount thereof.  The 10% Notes are secured by a second-priority  interest in all
domestic  inventory,  receivables,  equipment,  real property,  subsidiary stock
(limited to 65% for foreign  subsidiaries)  and intellectual  property.  The 10%
Notes are guaranteed by certain  existing and future domestic  subsidiaries  and
are not subject to any sinking fund requirements.

CAPITAL EXPENDITURES

In addition to keeping our current equipment and plants properly maintained,  we
are committed to replacing,  enhancing,  and upgrading our property,  plant, and
equipment to support new product development,  reduce production costs, increase
flexibility to respond  effectively  to market  fluctuations  and changes,  meet
environmental  requirements,  enhance safety, and promote  ergonomically correct
work  stations.  Consolidated  capital  expenditures  for the six  months  ended
October 1, 2006 and  October 2, 2005 were $4,336 and  $3,761,  respectively.  We
expect capital  spending for fiscal 2007 to be in the range of $8 to $10 million
compared  with  $8.4  million  in  fiscal  2006.   Anticipated   higher  capital
expenditures  for fiscal  2007 will be  primarily  directed  toward new  product
development and productivity improvement.

INFLATION AND OTHER MARKET CONDITIONS

Our costs are affected by inflation in the U.S. economy and, to a lesser extent,
in foreign economies including those of Europe,  Canada, Mexico, and the Pacific
Rim. We do not  believe  that  general  inflation  has had a material  effect on
results of operations  over the periods  presented  primarily due to overall low
inflation  levels of most costs over such  periods and the ability to  generally
pass on rising costs through price increases.  However, we have been impacted by
fluctuations  in steel  costs,  which vary by type of steel and we  continue  to
monitor them. In addition, U.S. employee benefits costs such as health insurance
and workers compensation insurance as well as energy costs have exceeded general
inflation levels.  We generally  incorporate those cost increases into our sales
price  increases  and consider  surcharges  on certain  products,  as determined
necessary.  In the future,  we may be further  affected by inflation that we may
not be able to pass on as price increases or surcharges.

SEASONALITY AND QUARTERLY RESULTS

Quarterly  results may be  materially  affected by the timing of large  customer
orders, periods of high vacation and holiday concentrations,  gains or losses on
early retirement of bonds, restructuring charges, divestitures and acquisitions.
Therefore,  the  operating  results for any  particular  fiscal  quarter are not
necessarily  indicative of results for any subsequent  fiscal quarter or for the
full fiscal year.

EFFECTS OF NEW ACCOUNTING PRONOUNCEMENTS

In  June  2006,  the  Financial   Accounting   Standards   Board  (FASB)  issued
Interpretation  No. 48 (FIN 48),  "Accounting  for Uncertainty in Income Taxes".
FIN 48 is an  interpretation  of FASB Statement No. 109  "Accounting  for Income
Taxes" and must be adopted by us no later than April 1, 2007.  FIN 48 prescribes
a comprehensive model for recognizing,  measuring, presenting, and disclosing in
the financial  statements  uncertain tax positions that we have taken or expects
to take in its tax returns.  We are  assessing the impact the adoption of FIN 48
will have on our consolidated financial position and results of operations.

                                     - 21 -
<PAGE>

In September 2006, the FASB issued Statement of Financial  Accounting  Standards
(SFAS) No. 157,  "Fair Value  Measurements,"  to define fair value,  establish a
framework  for  measuring  fair  value in  accordance  with  generally  accepted
accounting  principles,  and expand  disclosures about fair value  measurements.
SFAS No. 157 will be effective  for fiscal years  beginning  after  November 15,
2007.  We are assessing the impact the adoption of SFAS No. 157 will have on our
consolidated financial position and results of operations.

In September  2006,  the FASB issued SFAS No. 158,  "Employers'  Accounting  for
Defined  Benefit  Pension and Other  Postretirement  Plans, an amendment of FASB
Statements No. 87, 88, 106, and 132(R)" (SFAS 158). Among other items,  SFAS 158
requires  recognition  of the  overfunded or  underfunded  status of an entity's
defined  benefit  postretirement  plan as an asset or liability in the financial
statements,  requires the  measurement of defined  benefit  postretirement  plan
assets and obligations as of the end of the employer's fiscal year, and requires
recognition  of the funded  status of defined  benefit  postretirement  plans in
other  comprehensive  income.  SFAS 158 is effective as of the end of the fiscal
year ending after December 15, 2006. We are assessing the impact the adoption of
SFAS No. 158 will have on our  consolidated  financial  position  and results of
operations.

SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

This report may include  "forward-looking  statements" within the meaning of the
Private Securities  Litigation Reform Act of 1995. Such statements involve known
and unknown risks,  uncertainties  and other factors that could cause our actual
results  to differ  materially  from the  results  expressed  or implied by such
statements,  including  general  economic  and business  conditions,  conditions
affecting the industries served by us and our subsidiaries, conditions affecting
our customers and suppliers,  competitor responses to our products and services,
the overall market acceptance of such products and services,  the integration of
acquisitions and other factors  disclosed in our periodic reports filed with the
Commission.  Consequently such forward-looking  statements should be regarded as
our current plans,  estimates and beliefs.  We do not undertake and specifically
decline any obligation to publicly release the results of any revisions to these
forward-looking  statements  that may be made to reflect  any  future  events or
circumstances  after the date of such statements or to reflect the occurrence of
anticipated or unanticipated events.


                                     - 22 -
<PAGE>



Item 3.    Quantitative and Qualitative Disclosures About Market Risk


There have been no material  changes in the market risks since the end of Fiscal
2006.


Item 4.    Controls and Procedures

As of October 1, 2006, an evaluation  was performed  under the  supervision  and
with  the  participation  of  the  Company's  management,  including  the  chief
executive  officer and chief  financial  officer,  of the  effectiveness  of the
design and operation of the Company's disclosure controls and procedures.  Based
on that  evaluation,  the Company's  management,  including the chief  executive
officer and chief  financial  officer,  concluded that the Company's  disclosure
controls and  procedures  were  effective  as of October 1, 2006.  There were no
changes in the Company's  internal  controls or other factors  during our second
quarter ended October 1, 2006.



                                     - 23 -
<PAGE>


PART II.   OTHER INFORMATION

Item 1.    Legal Proceedings - none.

Item 1A.   Risk Factors

           No material changes from risk factors as previously  disclosed in the
           Company's Form 10-K for the year ended March 31, 2006.

Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds - none.

Item 3.    Defaults upon Senior Securities - none.

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

           At the  Company's  Annual  Meeting of  Stockholders  held on July 31,
           2006, the stockholders approved the following:

                    (a) A proposal to elect directors of the Company as follows:

                        15,222,177 votes cast for:        Timothy T. Tevens;
                        15,879,037 votes cast for:        Carlos Pasqual;
                        15,165,841 votes cast for:        Richard H. Fleming;
                        15,102,710 votes cast for:        Ernest R. Verebelyi;
                        15,732,867 votes cast for:        Wallace W. Creek;
                        15,697,640 votes cast for:        Linda A. Goodspeed;
                        15,725,280 votes cast for:        Stephen Rabinowitz.

                    (b) The  Columbus   McKinnon   Corporation  2006  Long  Term
                        Incentive Plan was adopted by a vote of 10,957,168 votes
                        for and 2,330,499 votes against.

                    (c) The Columbus McKinnon  Corporation  Executive Management
                        Variable  Compensation  Plan  was  adopted  by a vote of
                        13,926,972 votes for and 1,964,799 votes against.

Item 5.    Other Information - none.

Item 6.    Exhibits

(a) Exhibits:

           Exhibit 31.1  Certification  of Chief Executive  Officer  pursuant to
                         Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act
                         of 1934;  as adopted  pursuant  to  Section  302 of the
                         Sarbanes-Oxley Act of 2002.

           Exhibit 31.2  Certification  of Chief Financial  Officer  pursuant to
                         Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act
                         of 1934;  as adopted  pursuant  to  Section  302 of the
                         Sarbanes-Oxley Act of 2002.

           Exhibit 32    Certification  pursuant  to 18 U.S.C.  Section  1350 as
                         adopted  pursuant to Section 906 of the  Sarbanes-Oxley
                         Act of 2002.



                                     - 24 -
<PAGE>



                                   SIGNATURES


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


                                   COLUMBUS MCKINNON CORPORATION
                                   -----------------------------
                                   (Registrant)




Date: NOVEMBER 9, 2006             /S/ KAREN L. HOWARD
      ----------------             ------------------------------------------
                                   Karen L. Howard
                                   Vice President and Chief Financial Officer
                                     (Principal Financial Officer)


                                     - 25 -