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 December 27, 1998

                                       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

The number of shares of common stock outstanding as of January 31, 1999 was:
13,766,083 shares.


<PAGE>
                                               
                                 FORM 10-Q INDEX
                          COLUMBUS McKINNON CORPORATION
                                DECEMBER 27, 1998


                                                                          Page #
                                                                          ------
PART I.  FINANCIAL INFORMATION

Item 1.  Condensed Consolidated Financial Statements (Unaudited)

         Condensed consolidated  balance sheets -
          December 27, 1998 and March 31, 1998                                 2

         Condensed consolidated statements of income and retained earnings -
          Three months and nine months ended December 27, 1998
          and December 28, 1997                                                3

         Condensed consolidated statements of cash flows -
          Nine months ended December 27, 1998 and December 28, 1997            4

         Condensed  consolidated  statements  of  comprehensive  income -
          Three months and nine months ended December 27, 1998
          and December 28, 1997                                                5

         Notes to condensed consolidated financial statements -
          December 27, 1998                                                    6

Item 2.  Management's Discussion and Analysis of Results of Operations
          and Financial Condition                                             11


Part II. OTHER INFORMATION

Item 1    Legal Proceedings                                                   18

Item 2.   Changes in Securities - none.                                       18

Item 3.   Defaults upon Senior Securities - none.                             18

Item 4.   Submission of Matters to a Vote of Security Holders - none.         18

Item 5.   Other Information - none.                                           18

Item 6.   Exhibits and Reports on Form 8-K                                    18


                                      -1-
<PAGE>

Part I.  FINANCIAL INFORMATION

Item 1.  Condensed Consolidated Financial Statements (Unaudited)

<TABLE>
<CAPTION>

                          COLUMBUS McKINNON CORPORATION
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                   (UNAUDITED)

                                                        DECEMBER 27,   MARCH 31,
                                                           1998          1998
                                                        -----------    --------- 
                                                             (In thousands)
<S>                                                    <C>           <C>
ASSETS:
Current assets:
      Cash and cash equivalents .........................  $ 11,102   $ 22,841
      Trade accounts receivable .........................   132,408    113,509
      Unbilled revenues .................................    17,986     19,634
      Inventories .......................................   107,621    107,673
      Net assets held for sale ..........................     7,292     10,396
      Prepaid expenses ..................................     7,126      9,969
                                                          ---------  ---------
Total current assets ....................................   283,535    284,022
Net property, plant, and equipment ......................    82,325     81,927
Goodwill and other intangibles, net .....................   352,132    368,137
Marketable securities ...................................    18,173     16,665
Deferred taxes on income ................................     6,820      7,534
Other assets ............................................     8,748      5,463
                                                          ---------  ---------
Total assets ............................................  $751,733   $763,748
                                                          =========  =========

LIABILITIES AND SHAREHOLDERS' EQUITY:
Current liabilities:
      Notes payable to banks ............................  $  2,890   $  2,801
      Trade accounts payable ............................    45,371     53,901
      Excess billings ...................................     2,871      3,290
      Accrued liabilities ...............................    41,849     43,065
      Current portion of long-term debt .................     1,423      1,456
                                                          ---------  ---------
Total current liabilities ...............................    94,404    104,513
Senior debt, less current portion .......................   243,877    247,388
Subordinated debt .......................................   199,508    199,468
Other non-current liabilities ...........................    39,049     45,857
                                                          ---------  ---------
Total liabilities .......................................   576,838    597,226
Shareholders' equity:
      Common stock ......................................       137        137
      Additional paid-in capital ........................    97,409     96,544
      Retained earnings .................................    90,225     76,187
      ESOP debt guarantee ...............................   (10,235)    (3,203)
      Unearned restricted stock .........................      (322)      (538)
      Total accumulated other comprehensive income (loss)    (2,319)    (2,605)
                                                          ---------  ---------
Total shareholders' equity ..............................   174,895    166,522
                                                          ---------  ---------                 
Total liabilities and shareholders' equity ..............  $751,733   $763,748
                                                          =========  =========

See accompanying notes to condensed consolidated financial statements.

</TABLE>
                                      -2-


<PAGE>
<TABLE>
<CAPTION>

                          COLUMBUS McKINNON CORPORATION
        CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS
                                   (UNAUDITED)





                                              THREE MONTHS ENDED            NINE MONTHS ENDED
                                              ------------------            ----------------- 
                                          DECEMBER 27,    DECEMBER 28,   DECEMBER 27,  DECEMBER 28,
                                              1998           1997           1998          1997
                                                   (IN THOUSANDS, EXCEPT  PER SHARE DATA)


<S>                                       <C>             <C>            <C>           <C>    

Net sales ...........................      $171,727       $124,093       $510,865       $372,442
Cost of products sold ...............       128,741         88,680        382,024        265,990
                                           --------       --------       --------       --------
Gross profit ........................        42,986         35,413        128,841        106,452
                                           --------       --------       --------       --------

Selling expenses ....................        12,480         11,565         37,421         33,358
General and administrative expenses .         6,886          5,751         20,996         18,087
Amortization of intangibles .........         3,756          2,487         11,363          7,581
                                           --------       --------       --------       --------
                                             23,122         19,803         69,780         59,026
                                           --------       --------       --------       --------

Income from operations ..............        19,864         15,610         59,061         47,426
Interest and debt expense ...........         8,946          5,294         26,543         17,729
Interest and other income ...........           231            432            864          1,076
                                           --------       --------       --------       --------
Income before income taxes ..........        11,149         10,748         33,382         30,773
Income tax expense ..................         5,451          5,263         16,517         15,227
                                           --------       --------       --------       --------
Net income ..........................         5,698          5,485         16,865         15,546
Retained earnings -
     beginning of period ............        85,473         69,194         76,187         60,999
Cash dividends of $0.07, $0.07,
     $0.21 and $0.21 per share ......          (946)          (936)        (2,827)        (2,802)
                                           --------       --------       --------       --------
Retained earnings - end of period ...      $ 90,225       $ 73,743       $ 90,225       $ 73,743
                                           ========       ========       ========       ========

Earnings per share data,
    both basic and diluted: .........         $0.44          $0.41          $1.26          $1.16
                                              =====          =====          =====          =====

See accompanying notes to condensed consolidated financial statements.

</TABLE>
                                      -3-
<PAGE>
<TABLE>
<CAPTION>


                          COLUMBUS McKINNON CORPORATION
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

                                                                    NINE MONTHS ENDED
                                                                    -----------------
                                                               DECEMBER 27,      DECEMBER 28,
                                                                   1998              1997    
                                                                   ----              ----
                                                                      (IN THOUSANDS)
<S>                                                            <C>               <C>    
OPERATING ACTIVITIES:
Net income ...........................................          $ 16,865           $ 15,546
Adjustments to reconcile net income to net cash
    provided by operating activities:
      Depreciation and amortization ..................            19,752             14,244
      Other ..........................................             1,410              1,080
      Changes in operating assets and liabilities
         net of effects from businesses
         purchased and sold:
           Trade accounts receivable .................           (20,115)            (5,979)
           Unbilled revenues and excess billings .....             1,229                -
           Inventories ...............................            (2,080)            (1,590)
           Prepaid expenses ..........................              (482)             8,986
           Other assets ..............................              (434)              (311)
           Trade accounts payable ....................            (8,241)            (6,038)
           Accrued and non-current liabilities .......             1,373             (1,909)
                                                                --------           --------
Net cash provided by operating activities ............             9,277             24,029
                                                                --------           --------

INVESTING ACTIVITIES:
Purchase of marketable securities, net of sales ......              (834)            (2,295)
Capital expenditures .................................            (9,705)            (6,161)
Proceeds from sale of businesses .....................             9,301                -
Purchases of businesses, net of cash .................            (7,323)               -
Net assets held for sale .............................             3,104              4,669
Other ................................................               -                 (168)
                                                                --------           --------
Net cash used in investing activities ................            (5,457)            (3,955)
                                                                --------           --------

FINANCING ACTIVITIES:
Net payments under revolving line-of-credit agreements            (2,511)            (1,273)
Repayment of debt ....................................              (944)           (17,610)
Deferred financing costs .............................              (985)              (558)
Dividends paid .......................................            (2,827)            (2,802)
Reduction of ESOP debt guarantee, net of borrowings ..            (7,032)               625
                                                                --------           --------
Net cash used in financing activities ................           (14,299)           (21,618)
Effect of exchange rate changes on cash ..............            (1,260)            (1,480)
                                                                --------           --------
Net change in cash and cash equivalents ..............           (11,739)            (3,024)
Cash and cash equivalents at beginning of period .....            22,841              8,907
                                                                --------           --------
Cash and cash equivalents at end of period ...........          $ 11,102           $  5,883
                                                                ========           ========

See accompanying notes to condensed consolidated financial statements.

</TABLE>
                                      -4-


<PAGE>
<TABLE>
<CAPTION>


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

                                                       THREE MONTHS ENDED               NINE MONTHS ENDED
                                                       ------------------               -----------------
                                                  DECEMBER 27,     DECEMBER 28,    DECEMBER 27,    DECEMBER 28,
                                                      1998             1997            1998            1997
                                                      ----             ----            ----            ----
                                                            (IN THOUSANDS)
<S>                                               <C>              <C>             <C>             <C>     
Net income ...............................        $  5,698         $  5,485         $ 16,865         $ 15,546
                                                  --------         --------         --------         --------
Other comprehensive income (loss),
     net of tax:
  Foreign currency translation adjustments            (529)            (563)            (388)          (1,520)
  Unrealized gains on investments:
    Unrealized holding gains arising
     during the period ...................             899              182              678              983
    Less:  reclassification adjustment for
      gains included in net income .......              22             (182)              (4)            (429)
                                                  --------         --------         --------         --------     
                                                       921              -                674              554
                                                  --------         --------         --------         --------    
Total other comprehensive income (loss) ..             392             (563)             286             (966)
                                                  --------         --------         --------         --------
Comprehensive income .....................        $  6,090         $  4,922         $ 17,151         $ 14,580
                                                  ========         ========         ========         ========

See accompanying notes to condensed consolidated financial statements.

</TABLE>
                                      -5-

<PAGE>


                          COLUMBUS McKINNON CORPORATION
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)
                                DECEMBER 27, 1998


1.   The accompanying unaudited condensed consolidated financial statements have
     been prepared in accordance with 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  the  Company  at
     December 27, 1998, and the results of its operations and its cash flows for
     the three and nine month periods  ended  December 27, 1998 and December 28,
     1997,  have been  included.  Results for the period ended December 27, 1998
     are not necessarily  indicative of the results that may be expected for the
     year  ended  March  31,  1999.  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, 1998.


2.   Inventories consisted of the following:

                                     DECEMBER 27,    MARCH 31,
                                         1998          1998   
                                     ------------------------
                                            (IN THOUSANDS)
     At cost - FIFO basis:
          Raw materials ..........    $  49,667     $  52,158
          Work-in-process ........       17,504        22,188
          Finished goods .........       44,253        37,089
                                      ---------     ---------
                                        111,424       111,435
     LIFO cost less than FIFO cost       (3,803)       (3,762)
                                      ---------     ---------
                                      $ 107,621     $ 107,673
                                      =========     =========

     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.

3.   Property,  plant,  and equipment is net of $38,485,000  and  $30,876,000 of
     accumulated   depreciation  at  December  27,  1998  and  March  31,  1998,
     respectively. 

4.   Goodwill and other intangibles, net includes $25,750,000 and $14,979,000 of
     accumulated   amortization  at  December  27,  1998  and  March  31,  1998,
     respectively.

5.   General and Product Liability - Accrued general and product liability costs
     which are  included  in other  non-current  liabilities  are the  actuarial
     present value of estimated  expenditures  based on amounts  determined from
     loss  reports  and  individual  cases filed with the Company and an amount,
     based on past experience, for losses incurred but not reported. The accrual
     in these  condensed  consolidated  financial  statements  was determined by
     applying a discount factor based on interest rates  customarily used in the
     insurance  industry.  

                                      -6-
<PAGE>

     Yale was  self-insured  for  product  liability  claims up to a maximum  of
     $500,000 per occurrence and maintained  product liability  insurance with a
     $100 million cap per  occurrence  through July 31, 1997 when Yale was added
     to the  Company's  coverage  as  described  above.  The general and product
     liability  accrual  continues  to  include   provisions   related  to  that
     pre-acquisition time period.

6.   To manage its exposure to interest  rate  fluctuations,  the Company has an
     interest rate swap with a notional  value $3.5 million from January 2, 1999
     through  July 2, 2002 based on LIBOR at  5.9025%.  The  Company  also has a
     LIBOR-based interest rate cap on $49.5 million of debt through December 16,
     1999 at 10%. Net payments or receipts under the swap and cap agreements are
     recorded as adjustments  to interest  expense.  The carrying  amount of the
     Company's  senior  debt  instruments  approximates  the  fair  values.  The
     Company's  subordinated debt has an approximate fair value of $192,500,000,
     which is less than its carrying amount of $199,508,000.

<TABLE>
<CAPTION>
7.   The  following  table  sets  forth the  computation  of basic  and  diluted
     earnings per share before extraordinary charge for debt extinguishment:



                                                             THREE MONTHS ENDED            NINE MONTHS ENDED
                                                             ------------------            -----------------
                                                         DECEMBER 27,   DECEMBER 28,   DECEMBER 27,     DECEMBER 28,
                                                             1998           1997           1998             1997
                                                             ----           ----           ----             ----
<S>                                                     <C>             <C>            <C>              <C>        

Numerator for basic and diluted earnings per share:
  Income before extraordinary charge ..............     $ 5,698,000     $ 5,485,000     $16,865,000     $15,546,000
                                                        ===========     ===========     ===========     ===========

Denominators:
  Weighted-average common stock outstanding -
     denominator for basic EPS ....................      13,079,000      13,374,000      13,313,000      13,352,000

   Effect of dilutive employee stock options ......          13,000          72,000          48,000          52,000
                                                        -----------     -----------     -----------     -----------

   Adjusted weighted-average common stock
     outstanding and assumed conversions -
     denominator for diluted EPS ..................      13,092,000      13,446,000      13,361,000      13,404,000
                                                        ===========     ===========     ===========     ===========
</TABLE>

8.   Income tax expense for the three month periods ended  December 27, 1998 and
     December 28, 1997 and also for the nine month  periods  then ended  exceeds
     the  customary  relationship  between  income tax expense and income before
     income taxes due to  nondeductible  amortization of goodwill of $3,605,000,
     $2,487,000, $11,212,000, and $7,581,000, respectively.


9.   On December 4, 1998 the Company  acquired all of the  outstanding  stock of
     Societe  D'Exploitation  des Raccords Gautier  ("Gautier"),  a French-based
     manufacturer of industrial  components.  The total cost of the acquisition,
     which was  accounted  for as a  purchase,  was  approximately  $3  million,
     consisting of cash of $2.4 million  financed by proceeds from the Company's
     revolving debt facility and the assumption of certain debt.

     On August 21, 1998 the Company  acquired  the net assets of the  Abell-Howe
     Crane   division   ("Abell-Howe")   of  Abell-Howe   Company,   a  regional
     manufacturer  of jib,  gantry,  and  bridge  cranes.  The total cost of the
     acquisition,  which was accounted for as a purchase,  was  approximately $7
     million of cash and was financed by proceeds from the  Company's  revolving
     debt facility.  

     On August 7, 1998 the Company  sold its  Mechanical  Products  division,  a
     producer of circuit protection devices, for $12 million, consisting of $9.6
     million of cash and a $2.4 million note receivable, to Mechanical Products'
     senior management team.

                                      -7-
<PAGE>

     On March 31,  1998 the Company  acquired  all of the  outstanding  stock of
     LICO, Inc.  ("LICO"),  a leading  designer,  manufacturer  and installer of
     custom conveyor and automated  material  handling systems primarily for the
     automotive industry and, to a lesser extent, the steel and other industrial
     markets.  The total cost of the  acquisition,  which was accounted for as a
     purchase,  was  approximately  $155 million of cash,  which was financed by
     proceeds  from the  Company's  new  revolving  debt  facility and a private
     placement of senior subordinated notes, both of which also closed effective
     March 31, 1998.

     On January 7, 1998 the Company  acquired  all of the  outstanding  stock of
     Univeyor A/S  ("Univeyor"),  a  Denmark-based  designer,  manufacturer  and
     distributor of automated  material handling systems,  and has accounted for
     the   acquisition  as  a  purchase.   The  cost  of  the   acquisition  was
     approximately $15 million of cash financed by the Company's  revolving debt
     facility, plus the assumption of certain debt.

     The following  table  presents pro forma summary  information  for the nine
     month  periods  ended  December  27, 1998 and  December  28, 1997 as if the
     Mechanical Products sale, Abell-Howe,  LICO and Univeyor acquisitions,  and
     related borrowings had occurred as of April 1, 1997, which is the beginning
     of fiscal 1998.  The pro forma  information  is provided for  informational
     purposes  only.  It  is  based  on  historical  information  and  does  not
     necessarily  reflect the actual  results that would have occurred nor is it
     necessarily  indicative  of future  results of  operations  of the combined
     enterprise:

                                                    NINE MONTHS ENDED
                                                    -----------------
                                        DECEMBER  27, 1998    DECEMBER  28, 1997
                                        ------------------    ------------------
                                         (IN THOUSANDS,  EXCEPT PER SHARE DATA) 
   Pro forma:
    Net sales ..............                 $507,563                 $501,331
    Income from operations .                   58,682                   56,239
    Net income .............                   16,784                   15,670
    Earnings per share,
      both basic and diluted                     1.26                     1.17


<TABLE>
<CAPTION>
10.  The summary  financial  information  of the parent,  domestic  subsidiaries
     (guarantors) and foreign  subsidiaries  (nonguarantors)  of the 8.5% senior
     subordinated notes follows:

                                                                Domestic     Foreign     Elimina-    Consoli-
(In thousands)                                       Parent   Subsidiaries Subsidiaries    Tions      Dated
                                                   ------------------------------------------------------------
AS OF DECEMBER 27, 1998 
Current assets:
<S>                                                 <C>       <C>          <C>           <C>         <C>     
 Cash and cash equivalents                            $ 6,627   $   (1,482)     $ 5,957     $     -   $ 11,102
 Trade accounts receivable                             55,583       60,058       16,767           -    132,408
 Unbilled revenues                                          -       17,986            -           -     17,986
 Inventories                                           46,218       37,386       24,356        (339)   107,621
 Other current assets                                   1,696        8,453        4,269           -     14,418
                                                   ------------------------------------------------------------
  Total current assets                                110,124      122,401       51,349        (339)   283,535
Net property, plant, and equipment                     36,257       29,817       16,251           -     82,325
Goodwill and other intangibles, net                    42,967      261,236       47,929           -    352,132
Intercompany                                          208,358     (373,211)     (65,684)    230,537          -
Other assets                                          218,002      163,723       (1,851)   (346,133)    33,741
                                                   ------------------------------------------------------------
  Total assets                                      $ 615,708    $ 203,966    $  47,994  $ (115,935)  $751,733
                                                   ============================================================

                                      -8-
<PAGE>

Current liabilities                                  $ 18,230    $  57,109    $  18,052     $ 1,013   $ 94,404
Long-term debt, less current portion                  440,843          103        2,439          -     443,385
Other non-current liabilities                          11,909       24,061        3,079          -      39,049
                                                   ------------------------------------------------------------
  Total liabilities                                   470,982       81,273       23,570       1,013    576,838

Shareholders' equity                                  144,726      122,693       24,424    (116,948)   174,895
                                                   ------------------------------------------------------------
  Total liabilities and shareholders' equity        $ 615,708    $ 203,966    $  47,994 $  (115,935)  $751,733
                                                   ============================================================

FOR THE NINE MONTHS ENDED DECEMBER 27, 1998
Net sales                                            $196,972     $251,866      $72,555   $ (10,528)  $510,865
Cost of products sold                                 139,571      201,455       51,371     (10,373)   382,024
                                                   ------------------------------------------------------------
Gross profit                                           57,401       50,411       21,184        (155)   124,841
                                                   ------------------------------------------------------------
Selling, general and administrative expenses           25,448       18,665       14,304           -     58,417
Amortization of intangibles                             1,467        8,309        1,587           -     11,363
                                                   ------------------------------------------------------------
                                                       26,915       26,974       15,891           -     69,780
                                                   ------------------------------------------------------------
Income from operations                                 30,486       23,437        5,293        (155)    59,061
Interest and debt expense                              26,144           98          301           -     26,543
Interest and other income                                 934          141         (211)          -        864
                                                   ------------------------------------------------------------
Income before income taxes                              5,276       23,480        4,781        (155)    33,382
Income tax expense                                      2,625       11,560        2,394         (62)    16,517
                                                   ------------------------------------------------------------
Net income                                            $ 2,651     $ 11,920      $ 2,387    $    (93)  $ 16,865
                                                   ============================================================

FOR THE NINE MONTHS ENDED DECEMBER 27, 1998
OPERATING ACTIVITIES:
Net cash (used in) provided by operating             $ 8,100   $   (2,990)     $  4,135      $   32   $  9,277
activities
                                                   ------------------------------------------------------------

INVESTING ACTIVITIES:
Purchase of marketable securities, net                  (834)            -            -           -       (834)
Capital expenditures                                  (6,755)      (1,572)       (1,378)          -     (9,705)
Proceeds from sale of businesses                       9,390          (89)            -           -      9,301
Purchases of businesses, net of cash                  (7,000)        (323)            -           -     (7,323)
Other                                                      -        3,104             -           -      3,104
                                                   ------------------------------------------------------------
Net cash used in investing activities                 (5,199)       1,120        (1,378)          -     (5,547)
                                                   ------------------------------------------------------------

FINANCING ACTIVITIES:
Net payments under revolving
  line-of-credit agreements                           (2,600)           -            89           -     (2,511)
Repayment of debt                                       (822)        (380)          258           -       (944)
Dividends paid                                        (2,827)           -             -           -     (2,827)
Other                                                 (8,017)           -             -           -     (8,017)
                                                   ------------------------------------------------------------
Net cash used in financing activities                (14,266)        (380)          347           -    (14,299)
                                                   ------------------------------------------------------------
Effect of exchange rate changes on cash                    1            -        (1,229)        (32)    (1,260)
                                                   ------------------------------------------------------------
Net change in cash and cash equivalents              (11,364)      (2,250)        1,875           -    (11,739)
Cash and cash equivalents at beginning of period      17,991          768         4,082           -     22,841
                                                   ------------------------------------------------------------
Cash and cash equivalents at end of period           $ 6,627   $   (1,482)     $  5,597      $    -   $ 11,102
                                                   ============================================================
</TABLE>

11.  During October 1998, the Company  repurchased  479,900 shares of its common
     stock for a total consideration of $7,682,000.  These shares were deposited
     in the Employee Stock Ownership Plan and are owned by such plan.

                                      -9-

<PAGE>

12.  The  Financial  Accounting  Standards  Board  (FASB)  issued  Statement  of
     Financial  Accounting  Standards  (FAS) No.  130  "Reporting  Comprehensive
     Income," which the Company adopted for the interim  reporting period ending
     June 28, 1998.  Statement No. 130  establishes  new rules for the reporting
     and  display of  comprehensive  income and its  components.  This  includes
     unrealized gains and losses on the Company's available-for-sale securities,
     foreign currency  translation  adjustments,  and minimum pension  liability
     adjustments,  which  previously were reported in  shareholders'  equity and
     will  now  be  included  and  disclosed  in  total  comprehensive   income.
     Compliance  with this Statement  does not impact  financial  position,  net
     income or cash flows.

     The FASB also issued FAS Statement No. 131  "Disclosures  about Segments of
     an Enterprise  and Related  Information,"  which the Company will adopt for
     the year ended March 31, 1999.  Statement No. 131  superseded FAS Statement
     No.  14  "Financial  Reporting  for  Segments  of a  Business  Enterprise."
     Statement  No.  131  establishes  new  standards  for  determining  segment
     criteria and annual and interim reporting of that data. It also establishes
     new  disclosures  about  products,  geographic  areas and major  customers.
     Currently, the company reports one operating segment under Statement No. 14
     and, while the impact of compliance with Statement No. 131 has not yet been
     determined,  the Company  expects to report at least two segments  upon its
     adoption.

     The  FASB  issued  FAS  Statement  No.  133   "Accounting   for  Derivative
     Instruments and Hedging  Activities" which is effective for years beginning
     after June 15,  1999.  Statement  No.  133  establishes  standards  for the
     recognition and measurement of derivatives and hedging activities.  At this
     time,  the Company's  management  does not believe that this statement will
     have a material effect on the financial statements.

                                      -10-

<PAGE>



                Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  RESULTS OF OPERATIONS AND FINANCIAL CONDITION


OVERVIEW

The  Company  is  a   broad-line   designer,   manufacturer,   and  supplier  of
sophisticated  material  handling  products  and  integrated  material  handling
solutions  that are  widely  distributed  to  industrial  and  consumer  markets
worldwide.  The Company's material handling products are sold,  domestically and
internationally,  principally  to third party  distributors  in  commercial  and
consumer distribution channels, and to a lesser extent directly to manufacturers
and  other   end-users.   Commercial   distribution   channels  include  general
distributors, specialty distributors,  service-after-sale distributors, original
equipment  manufacturers  ("OEMs"),  and the U.S. and Canadian governments.  The
general distributors are comprised of industrial distributors, rigging shops and
crane builders. Specialty distributors include catalog houses, material handling
specialists and entertainment equipment riggers. The service-after-sale  network
includes repair parts  distribution  centers,  chain service centers,  and hoist
repair  centers.  Consumer  distribution  channels  include mass  merchandisers,
hardware distributors,  trucking and transportation distributors,  farm hardware
distributors  and rental outlets.  The Company's  integrated  material  handling
solutions businesses  primarily deal with end-users.  Material handling solution
sales are concentrated,  domestically and internationally (primarily Europe), in
the automotive industry, consumer products manufacturing,  warehousing and, to a
lesser extent, the steel, construction and other industrial markets.

RESULTS OF OPERATIONS

THREE MONTHS AND NINE MONTHS ENDED DECEMBER 27, 1998 AND DECEMBER 28, 1997
Net sales in the fiscal 1999 quarter ended December 27, 1998 were  $171,727,000,
an increase of  $47,634,000 or 38.4% over the fiscal 1998 quarter ended December
28,  1997.  Net  sales  for  the  nine  months  ended  December  27,  1998  were
$510,865,000,  an increase of  $138,423,000  or 37.2% over the nine months ended
December 28, 1997.  Sales growth during the current quarter was due primarily to
the March 1998 LICO  acquisition  and January  1998  Univeyor  acquisition.  The
impact of the August 1998 sale of the Mechanical Products division resulted in a
decrease of $4,360,000 for the quarter December 27, 1998 compared to the quarter
ended  December  28, 1997.  Excluding  the effects of the  acquisitions  and the
divestiture,  compared  with the prior year quarter,  the Company  experienced a
3.9% net decrease in sales volume due to a soft industrial market, the continued
effect of the General Motors strike,  the impact of the Asian and South American
economic  situations and a shift in demand from small retail  hardware stores to
larger  do-it-yourself  superstores,  to which the Company supplies only a small
share. In addition,  list price increases of approximately 4% were introduced in
both December 1998 and 1997 affecting certain of the Company's hoist,  chain and
forged products sold in its domestic commercial  markets.  Sales in the Products
and  Solutions  segments  were as  follows,  in  thousands  of dollars  and with
percentage changes for each group:

                                      -11-
<PAGE>

<TABLE>
<CAPTION>


                     THREE MONTHS ENDED                             NINE MONTHS ENDED
                     ------------------                             -----------------
                     DEC. 27,   DEC. 28,       CHANGE               DEC. 27    DEC. 28       CHANGE
                                               ------                                        ------
                       1998       1997      AMOUNT     %             1998       1997      AMOUNT     %
                       ----       ----      ------     -             ----       ----      ------     -
                                           (IN THOUSANDS, EXCEPT PERCENTAGES)

<S>                <C>        <C>         <C>       <C>         <C>         <C>         <C>        <C>  
Products           $ 113,416  $ 113,014   $    402     0.4      $  339,757  $ 341,524   $ (1,767)   (0.5)
Solutions             62,452      9,996     52,456   524.8         174,054     26,940    147,114   546.1
Divested business          -      4,360     (4,360) (100.0)          7,582     13,329     (5,747)  (43.1)
Intercompany
 Eliminations         (4,141)    (3,277)      (864)  (26.4)        (10,528)    (9,351)    (1,177)  (12.6)
                   ---------  ---------   --------              ----------  ---------   --------   
   Net sales       $ 171,727  $ 124,093   $ 47,634    38.4      $  510,865  $ 372,442   $138,423    37.2
                   =========  =========   ========              ==========  =========   ========    
</TABLE>

The Company's gross profit margins were  approximately  25.0%,  28.5%, 25.2% and
28.6% for the fiscal  1999 and 1998  quarters  and the nine  months  then ended,
respectively. The decrease in gross profit margin in the current quarter and the
nine  month  period  resulted  from  the  inclusion  of the  LICO  and  Univeyor
operations.  These design and engineer-to-order  businesses typically experience
gross profit  margins of  approximately  20%,  which is lower than the Company's
margins in its product-oriented businesses.

Selling expenses were $12,480,000,  $11,565,000,  $37,421,000 and $33,358,000 in
the fiscal 1999 and 1998 quarters and the nine months then ended,  respectively.
The 1999 expenses were impacted by the addition of LICO and Univeyor activities.
As a percentage of consolidated  net sales,  selling  expenses were 7.3%,  9.3%,
7.3% and 9.0% in the fiscal  1999 and 1998  quarters  and the nine  months  then
ended,  respectively.  The more favorable percentages in the fiscal 1999 quarter
and the nine month period are primarily due to low selling expenses  relative to
sales for LICO and Univeyor, which is normal for these businesses.

General and administrative expenses were $6,886,000, $5,751,000, $20,996,000 and
$18,087,000 in the fiscal 1999 and 1998 quarters and the nine months then ended,
respectively.  The 1999  expenses  were  impacted  by the  addition  of LICO and
Univeyor  activities.  As a percentage of  consolidated  net sales,  general and
administrative  expenses were 4.0%,  4.6%,  4.1% and 4.9% in the fiscal 1999 and
1998  quarters  and the nine  months  then  ended,  respectively.  The  improved
percentages  result from  continued  integration of  acquisitions  and the fixed
nature of costs in relation to the increased sales.

Amortization  of  intangibles  was  $3,756,000,   $2,487,000,   $11,363,000  and
$7,581,000  in the fiscal 1999 and 1998 quarters and the nine months then ended,
respectively.  The fiscal 1999 increase is due to the  amortization  of goodwill
resulting from the acquisitions of LICO and Univeyor.

As a result of the above, income from operations  increased  $4,254,000 or 27.3%
in the fiscal  1999  quarter  and  $11,635,000  or 24.5% in the fiscal 1999 nine
month period compared to the respective periods in fiscal 1998. This is based on
income from operations of $19,864,000,  $15,610,000, $59,061,000 and $47,426,000
or 11.6%,  12.6%,  11.6% and 12.7% as a percentage of consolidated  net sales in
the fiscal 1999 and 1998 quarters and nine months then ended, respectively.

Interest  and  debt  expense  was   $8,946,000,   $5,294,000,   $26,543,000  and
$17,729,000 in the fiscal 1999 and 1998 quarters and the nine months then ended,
respectively.  The fiscal 1999  increase is  primarily  due to debt  incurred to
finance  the LICO  acquisition.  As a  percentage  of  consolidated  net  sales,
interest and debt expense was 5.2%,  4.3%,  5.2% and 4.8% in the fiscal 1999 and
1998 quarters and the nine months then ended, respectively.

                                      -12-
<PAGE>

Interest and other income was $231,000, $432,000, $864,000 and $1,076,000 in the
fiscal 1999 and 1998 quarters and the nine months then ended, respectively.  The
fiscal 1999 decrease is due to decreases in the investment  return on marketable
securities  held for  settlement  of a  portion  of the  Company's  general  and
products liability claims.

Income taxes as a percentage of income  before  income taxes were 48.9%,  49.0%,
49.5% and 49.5% in the fiscal  1999 and 1998  quarters  and the nine months then
ended,  respectively.  The  percentages  reflect  the  effect  of  nondeductible
amortization of goodwill resulting from acquisitions.

As a result of the above, net income increased  $213,000 or 3.9% for the quarter
and increased $1,319,000 or 8.5% for the nine months then ended. As a percentage
of  consolidated  net sales,  net income  was 3.3%,  4.4%,  3.3% and 4.2% in the
fiscal 1999 and 1998 quarters and the nine months then ended, respectively.

LIQUIDITY AND CAPITAL RESOURCES

On December 4, 1998 the Company acquired all of the outstanding stock of Societe
D'Exploitation des Raccords Gautier ("Gautier"),  a French-based manufacturer of
industrial  components.  The total cost of the acquisition,  which was accounted
for as a purchase,  was  approximately  $3 million,  consisting  of cash of $2.4
million financed by proceeds from the Company's  revolving debt facility and the
assumption of certain debt.

During October,  the Company repurchased 479,900 shares of its common stock of a
total of $7,82,000.  These shares were deposited in the Employee Stock Ownership
Plan and are owned by such plan.

On August 21, 1998 the Company  acquired the net assets of the Abell-Howe  Crane
division of Abell-Howe  Company,  a regional  manufacturer of jib,  gantry,  and
bridge cranes.  The total cost of the acquisition,  which was accounted for as a
purchase,  was  approximately  $7 million of cash,  and was financed by proceeds
from the Company's revolving debt facility.

On August 7, 1998 the Company sold its Mechanical Products division,  a producer
of circuit controls and protection devices, for $12 million,  consisting of $9.6
million of cash and a $2.4  million note  receivable,  to  Mechanical  Products'
senior management team.

On March 31, 1998, the Company acquired all of the outstanding stock of LICO for
approximately  $155  million in cash,  which was  financed by proceeds  from the
Company's new revolving credit facility ("1998 Revolving Credit Facility") and a
private  placement of senior  subordinated  notes ("8.5% Notes"),  both of which
also closed  effective  March 31, 1998. The Company's  previously  existing Term
Loan A, Term Loan B and  revolving  credit  facility  were repaid and retired on
March 31, 1998.

On  January  7, 1998,  the  Company  acquired  all of the  outstanding  stock of
Univeyor  for  approximately  $15  million  of cash  financed  by the  Company's
revolving credit facility, plus the assumption of certain debt.

                                      -13-

<PAGE>

The new 1998 Revolving Credit Facility provides availability up to $300 million,
due March 31, 2003, against which $237.4 million was outstanding at December 27,
1998.  Interest  is payable at varying  Eurodollar  rates  based on LIBOR plus a
spread determined by the Company's leverage ratio, revised to 112.5 basis points
effective July 20, 1998. The 1998  Revolving  Credit  Facility is secured by all
equipment,  inventory,  receivables  and  subsidiary  stock  (limited to 65% for
foreign subsidiaries). To manage its exposure to interest rate fluctuations, the
Company has an interest rate swap and cap.

The 8.5%  Notes  issued on March  31,  1998  amounted  to  $199,468,000,  net of
original  issue  discount of $532,000  and are due March 31,  2008.  Interest is
payable  semi-annually  based  on  an  effective  rate  of  8.45%,   considering
$1,902,000 of proceeds from rate hedging in advance of the placement. Provisions
of  the  8.5%  Notes  include,   without  limitation,   restrictions  on  liens,
indebtedness, asset sales, and dividends and other restricted payments. Prior to
April 1, 2003,  the 8.5% Notes are  redeemable at the option of the Company,  in
whole or in part, at the  Make-Whole  Price (as  defined).  On or after April 1,
2003 they are redeemable at prices declining annually from 108.5% to 100% on and
after April 1, 2006. In addition,  on or prior to April 1, 2001, the Company may
redeem up to 35% of the outstanding  notes at a redemption  price of 108.5% with
the proceeds of equity offerings, subject to certain restrictions.  In the event
of a Change in Control (as  defined),  each holder of the 8.5% Notes may require
the  Company to  repurchase  all or a portion of such  holder's  8.5% Notes at a
purchase price equal to 101% of the principal amount thereof. The 8.5% Notes are
not subject to any sinking fund requirements.

The Company believes that its cash on hand, cash flows,  and borrowing  capacity
under its 1998 Revolving  Credit Facility will be sufficient to fund its ongoing
operations, budgeted capital expenditures and business acquisitions for the next
twelve months.

Net cash provided by operating  activities  decreased to $9,277,000 for the nine
months  ended  December  27, 1998 from  $24,029,000  for the nine  months  ended
December  28, 1997.  The  $14,752,000  decrease is  primarily  due to changes in
working capital,  reflecting fluctuations in the temporary working capital needs
of LICO.

Net cash used in  investing  activities  increased  to  $5,457,000  for the nine
months  ended  December  27,  1998 from  $3,955,000  for the nine  months  ended
December 28, 1997.  The  $1,502,000  increase in cash usage is due  primarily to
increased capital expenditures over the prior year's quarter,  proceeds received
from the sale of Mechanical  Products offset by cash used for the acquisition of
Abell-Howe.

Net cash used in  financing  activities  decreased to  $14,299,000  for the nine
months  ended  December  27, 1998 from  $21,618,000  for the nine  months  ended
December 28, 1997. The $7,319,000 decrease in cash usage is primarily due to the
timing of debt  repayments  and the repurchase of common stock for the Company's
Employee Stock Ownership Plan.

                                      -14-

<PAGE>

CAPITAL EXPENDITURES

In addition to keeping its current equipment and plants properly maintained, the
Company is committed to replacing, enhancing, and upgrading its property, plant,
and  equipment  to 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 nine months ended  December 27, 1998 and December
28, 1997 were $9,705,000 and  $6,161,000,  respectively.  The increase  reflects
timing of the incurrence of maintenance capital expenditures.

INFLATION AND OTHER MARKET CONDITIONS

The  Company's  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.  The Company  does not believe  that  inflation  has had a
material effect on results of operations over the periods  presented  because of
low inflation levels over the periods and because the Company has generally been
able to pass on rising costs through  price  increases.  However,  in the future
there can be no assurance  that the  Company's  business will not be affected by
inflation or that it will be able to pass on cost increases.

YEAR 2000 CONVERSIONS

The Company's  corporate-wide Year 2000 initiative is being managed by a team of
internal staff and  administered  by the Director of Information  Services.  The
Company has completed the assessment  phase of its Year 2000 compliance  project
and is currently working on remediation of affected components.

The Company has determined that it needs to modify  significant  portions of its
corporate  business  information  software  so that  its  computer  system  will
function  properly  with  respect  to dates in the year  2000 and  beyond.  Both
internal   and  external   resources   have  been   dedicated  to   identifying,
implementing,  and testing corrective action in order to make such programs Year
2000  compliant;  all such work is planned to be  completed  by July 1999 and is
currently on schedule.  To date the corporate business  information software has
been  100%  assessed,   approximately  84%  has  been  remedially  reprogrammed,
approximately  46% has been  successfully  tested,  and approximately 41% is now
implemented as totally Year 2000  compliant.  The Company  believes  that,  with
modifications  to  existing  software,   the  Year  2000  issue  will  not  pose
significant operational problems for its computer systems.

The Company has completed a corporate-wide assessment of the Year 2000 readiness
of  microprocessor  controlled  equipment  such as robotics,  CNC machines,  and
security and environmental  systems.  This assessment has revealed that at least
85%  of all  microprocessor  controlled  equipment,  including  over  98% of all
security and  environmental  systems,  is  currently  compliant.  Any  necessary
upgrades to ensure Year 2000 readiness are expected to be in place by the end of
March 1999. In addition, the Company has determined that all of its manufactured
products are 100% Year 2000 compliant.

                                      -15-
<PAGE>

The Company has  initiated  communications  with its  suppliers and customers to
determine the extent to which  systems,  products or services are  vulnerable to
failure should those third parties fail to remediate their own Year 2000 issues.
To date the Company has received  responses to over 70% of its  inquiries and no
Year 2000 compliance problem has been identified from these responses.  While we
believe that our Year 2000 compliance plan adequately  addresses  potential Year
2000 concerns and to date no significant  Year 2000 issues have been  identified
with our suppliers and customers,  there can be no guarantee that the systems of
other companies on which our operations rely will be compliant on a timely basis
and will not have an effect on our operations.

The Company has conducted  preliminary  contingency  planning and identified the
critical need areas. A high level  approach  incorporating  manual  workarounds,
increasing critical inventories,  identifying alternate suppliers, and adjusting
staffing  levels  has  been  discussed  and  forms  the  basis  for the  initial
contingency planning. The Company believes this level of planning is appropriate
at the current time, however, the planning will be further expanded if warranted
by future events.

The cost of the Year 2000  initiatives  is not  expected  to be  material to the
Company's results of operations or financial position.

The forward looking statements  contained in the Year 2000 Conversions should be
read in  conjunction  with the  Company's  disclosures  under the heading  "Safe
Harbor Statement under the Private Securities Litigation Reform Act of 1995."

EFFECTS OF NEW ACCOUNTING PRONOUNCEMENTS

The  Financial   Accounting   Standards  Board  issued  Statement  of  Financial
Accounting Standards No. 130 "Reporting Comprehensive Income," which the Company
adopted for the interim reporting period ending June 28, 1998. Statement No. 130
establishes new rules for the reporting and display of comprehensive  income and
its  components.  This  includes  unrealized  gains or losses  on the  Company's
available-for-sale  securities,  foreign currency translation  adjustments,  and
minimum  pension  liability  adjustments,  which  previously  were  reported  in
shareholders'  equity, and will be included and disclosed in total comprehensive
income.  Compliance with this Statement does not impact financial position,  net
income or cash flows.

The FASB also issued FAS Statement No. 131  "Disclosures  about Segments of
an  Enterprise  and Related  Information,"  which the Company will adopt for the
year ended March 31, 1999.  Statement  No. 131  superseded  FAS Statement No. 14
"Financial Reporting for Segments of a Business  Enterprise."  Statement No. 131
establishes  new  standards  for  determining  segment  criteria  and annual and
interim  reporting  of that data.  It also  establishes  new  disclosures  about
products,  geographic areas and major customers.  Currently, the Company reports
one operating segment under Statement No. 14 and, while the impact of compliance
with  Statement  No. 131 has not yet been  determined,  the  Company  expects to
report at least two segments upon its adoption.

The FASB issued FAS Statement No. 133 "Accounting for Derivative Instruments and
Hedging  Activities" which is effective for years beginning after June 15, 1999.
Statement No. 133  establishes  standards for the recognition and measurement of
derivatives and hedging activities.  At this time, the Company's management does
not believe that this  statement  will have a material  effect on the  financial
statements.

                                      -16-
<PAGE>

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

Forward-looking   statements  in  this  report,  including  without  limitation,
statements   relating   to  the   Company's   plans,   strategies,   objectives,
expectations,  intentions  and adequacy of  resources,  are made pursuant to the
Safe Harbor Provisions of the Private Securities  Litigation Reform Act of 1995.
Investors are cautioned that such  forward-looking  statements involve risks and
uncertainties  including  without  limitation the  following:  (i) the Company's
plans,  strategies,  objectives,  expectations,  and  intentions  are subject to
change at any time at the  discretion of the Company,  (ii) the Company's  plans
and results of operations  will be affected by the  Company's  ability to manage
its growth, and (iii) other risks and uncertainties  indicated from time to time
in the Company's filings with the Securities and Exchange Commission.

                                      -17-
<PAGE>

Part II.  OTHER INFORMATION

Item 1. Legal Proceedings - A settlement has been reached among all parties in a
        previously   disclosed  product  liability  lawsuit brought against Yale
        Industrial  Products, Inc. prior  to the  fiscal 1997  acquisition.  The
        lawsuit was settled  within the policy  limits of the Company's  product
        liability insurance coverage.

Item 2. Changes in Securities - none.

Item 3. Defaults upon Senior Securities - none.

Item 4. Submission of Matters to a Vote of Security Holders - none.

Item 5. Other Information - none.

Item 6. Exhibits and Reports on Form 8-K

        Exhibit 10.1 - Columbus McKinnon Corporation Monthly Retirement Benefit
                       Plan Restatement Effective April 1, 1998

        Exhibit 10.2 - Columbus McKinnon Corporation Thrift 401(K) Plan 
                       Restatement Effective January 1, 1998

     There are no reports on Form 8-K.

                                      -18-

<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: FEBRUARY 10, 1999                      /S/ ROBERT L. MONTGOMERY, JR.
      -----------------                      -----------------------------
                                             Robert L. Montgomery, Jr.
                                             Executive Vice President and
                                             Chief Financial Officer (Principal
                                              Financial Officer)


                                      -18-