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 July 2, 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 July 31,  2006 was:
18,722,172 shares.


<PAGE>


                                 FORM 10-Q INDEX
                          COLUMBUS MCKINNON CORPORATION
                                  JULY 2, 2006


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

Item 1.    Condensed Consolidated Financial Statements (Unaudited)

           Condensed consolidated balance sheets -
              July 2, 2006 and March 31, 2006                                 2

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

           Condensed consolidated statements of cash flows -
              Three months ended July 2, 2006 and July 3, 2005                4

           Condensed consolidated statements of comprehensive income -
              Three months ended July 2, 2006 and July 3, 2005                5

           Notes to condensed consolidated financial statements -
              July 2, 2006                                                    6

Item 2.    Management's Discussion and Analysis of Results of
              Operations and Financial Condition                             16

Item 3.    Quantitative and Qualitative Disclosures About Market Risk        21

Item 4.    Controls and Procedures                                           21

PART II.  OTHER INFORMATION

Item 1.    Legal Proceedings - none.                                         22

Item 1A.   Risk Factors                                                      22

Item 2.    Unregistered Sales of Equity Securities and
              Use of Proceeds - none.                                        22

Item 3.    Defaults upon Senior Securities - none.                           22

Item 4.    Submission of Matters to a Vote of Security Holders - none.       22

Item 5.    Other Information - none.                                         22

Item 6.    Exhibits                                                          22


                                     - 1 -
<PAGE>


PART I.     FINANCIAL INFORMATION

Item 1.     Condensed Consolidated Financial Statements (Unaudited)

                          COLUMBUS MCKINNON CORPORATION
                      CONDENSED CONSOLIDATED BALANCE SHEETS

                                                    JULY 2,           MARCH 31,
                                                     2006               2006
                                                  ----------        -----------
                                                  (UNAUDITED)
ASSETS:                                                  (IN THOUSANDS)
Current assets:
      Cash and cash equivalents                   $   19,927        $    45,598
      Trade accounts receivable                       97,701             95,726
      Unbilled revenues                               16,292             12,061
      Inventories                                     81,025             74,845
      Prepaid expenses                                17,623             15,676
                                                  ----------        -----------
Total current assets                                 232,568            243,906
Property, plant, and equipment, net                   55,661             55,132
Goodwill and other intangibles, net                  187,705            187,327
Marketable securities                                 27,342             27,596
Deferred taxes on income                              43,830             46,065
Other assets                                           5,569              6,018
                                                  ----------        -----------
Total assets                                      $  552,675        $   566,044
                                                  ==========        ===========

LIABILITIES AND SHAREHOLDERS' EQUITY:
Current liabilities:
      Notes payable to banks                      $    6,331        $     5,798
      Trade accounts payable                          43,674             39,311
      Accrued liabilities                             59,277             61,264
      Restructuring reserve                              668                793
      Current portion of long-term debt                  133                127
                                                  ----------        -----------
Total current liabilities                            110,083            107,293
Senior debt, less current portion                     40,973             67,841
Subordinated debt                                    136,000            136,000
Other non-current liabilities                         51,049             50,489
                                                  ----------        -----------
Total liabilities                                    338,105            361,623
                                                  ----------        -----------
Shareholders' equity
      Common stock                                       187                185
      Additional paid-in capital                     172,662            170,081
      Retained earnings                               56,724             51,152
      ESOP debt guarantee                             (3,851)            (3,996)
      Unearned restricted stock                            -                (22)
      Accumulated other comprehensive loss           (11,152)           (12,979)
                                                  ----------        -----------
Total shareholders' equity                           214,570            204,421
                                                  ----------        -----------
Total liabilities and shareholders' equity        $  552,675        $   566,044
                                                  ==========        ===========

     SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.



                                     - 2 -
<PAGE>

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

<TABLE>
<CAPTION>

                                                                         THREE MONTHS ENDED
                                                                         ------------------
                                                                      JULY 2,           JULY 3,
                                                                       2006              2005
                                                                    ----------       ------------
                                                                         (IN THOUSANDS, EXCEPT
                                                                             PER SHARE DATA)


<S>                                                               <C>                <C>
Net sales                                                         $    146,694       $    140,877
Cost of products sold                                                  104,411            104,334
                                                                  ------------       ------------
Gross profit                                                            42,283             36,543
                                                                  ------------       ------------

Selling expenses                                                        15,367             13,658
General and administrative expenses                                      9,089              8,175
Restructuring charges                                                        4                 26
Amortization of intangibles                                                 43                 62
                                                                  ------------       ------------
                                                                        24,503             21,921
                                                                  ------------       ------------

Income from operations                                                  17,780             14,622
Interest and debt expense                                                4,512              6,716
Other (income) and expense, net                                          3,570               (789)
                                                                  ------------       ------------
Income before income tax expense                                         9,698              8,695
Income tax expense                                                       4,265              1,587
                                                                  ------------       ------------
Income from continuing operations                                        5,433              7,108
Income from discontinued operations (net of tax)                           139                214
                                                                  ------------       ------------
Net income                                                               5,572              7,322
Retained earnings (accumulated deficit) - beginning of period           51,152             (8,644)
                                                                  ------------       ------------
Retained earnings (accumulated deficit) - end of period           $     56,724       $     (1,322)
                                                                  ============       ============


Basic income per share:
     Income from continuing operations                            $       0.29       $       0.49
     Income from discontinued operations                                  0.01               0.01
                                                                  ------------       ------------
     Basic income per share                                       $       0.30       $       0.50
                                                                  ============       ============

Diluted income per share:
     Income from continuing operations                            $       0.28       $       0.48
     Income from discontinued operations                                  0.01               0.01
                                                                  ------------       ------------
     Diluted income per share                                     $       0.29       $       0.49
                                                                  ============       ============
</TABLE>

     SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.



                                     - 3 -
<PAGE>

<TABLE>
<CAPTION>

                          COLUMBUS MCKINNON CORPORATION
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
                                                                           THREE MONTHS ENDED
                                                                           ------------------
                                                                       JULY 2,            JULY 3,
                                                                        2006               2005
                                                                     ----------        -----------
                                                                             (IN THOUSANDS)
OPERATING ACTIVITIES:
<S>                                                                  <C>               <C>
Income from continuing operations                                    $    5,433        $     7,108
Adjustments to reconcile income from
   continuing operations to net cash
   provided by operating activities:
     Depreciation and amortization                                        2,105              2,332
     Deferred income taxes                                                2,235              1,724
     Gain on sale of real estate/investments                               (373)              (481)
     Loss (gain) on early retirement of bonds                             3,780                (11)
     Stock compensation expense                                             798                  -
     Amortization/write-off of deferred financing costs                     980                320
     Changes in operating assets and liabilities:
           Trade accounts receivable and unbilled revenues               (4,449)            (3,919)
           Inventories                                                   (5,608)            (2,620)
           Prepaid expenses                                              (1,925)               130
           Other assets                                                    (248)              (202)
           Trade accounts payable                                         3,570              2,095
           Accrued and non-current liabilities                           (1,509)             4,161
                                                                     ----------        -----------
Net cash provided by operating activities                                 4,789             10,637
                                                                     ----------        -----------

INVESTING ACTIVITIES:
Sale (purchase) of marketable securities, net                                47               (688)
Capital expenditures                                                     (1,903)            (1,674)
Proceeds from discontinued operations note receivable - revised             139                214
                                                                     ----------        -----------
Net cash used in investing activities                                    (1,717)            (2,148)
                                                                     ----------        -----------

FINANCING ACTIVITIES:
Proceeds from stock options exercised                                     1,725                  1
Net borrowings under revolving line-of-credit agreements                 11,843              4,205
Repayment of debt                                                       (42,302)            (8,186)
Deferred financing costs incurred                                          (325)               (98)
Other                                                                       145                145
                                                                     ----------        -----------
Net cash used in financing activities                                   (28,914)            (3,933)
EFFECT OF EXCHANGE RATE CHANGES ON CASH                                     171               (408)
                                                                     ----------        -----------
Net change in cash and cash equivalents                                 (25,671)             4,148
Cash and cash equivalents at beginning of period                         45,598              9,479
                                                                     ----------        -----------
Cash and cash equivalents at end of period                           $   19,927        $    13,627
                                                                     ==========        ===========
</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
                                                                 ------------------
                                                              JULY 2,          JULY 3,
                                                               2006             2005
                                                            ----------       ----------
                                                                   (IN THOUSANDS)

<S>                                                         <C>              <C>
Net income                                                  $    5,572       $    7,322
                                                            ----------       ----------
Other comprehensive income (loss), net of tax:
   Foreign currency translation adjustment                       2,350           (3,145)
   Unrealized loss on investments:
     Unrealized holding (loss) gain arising
       during the period                                          (207)             371
     Reclassification adjustment for
       gain included in net income                                (316)            (450)
                                                            ----------       ----------
                                                                  (523)             (79)
                                                            ----------       ----------
Total other comprehensive income (loss)                          1,827           (3,224)
                                                            ----------       ----------
Comprehensive income                                        $    7,399       $    4,098
                                                            ==========       ==========

</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)
                                  JULY 2, 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 July 2, 2006,  and the results of its  operations and its cash flows
for the three  month  periods  ended  July 2, 2006 and July 3,  2005,  have been
included.  Results  for the  period  ended  July  2,  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

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 July 2, 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.  As of
July 2, 2006, there are 169,600 options available for grant.

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
$798 of non-deductible  incentive stock option expense in the three months ended
July 2, 2006.  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.

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 $14.92 for options  granted  during the three  months  ended July 2,
2006.  No options were granted  during the three months ended July 3, 2005.  The
following table provides the  weighted-average  assumptions  used to value stock
options granted during the three months ended July 2, 2006:


                                     - 6 -
<PAGE>

                                                  THREE MONTHS ENDED
                                                     JULY 2, 2006
                                                 ---------------------
Assumptions:
     Risk-free interest rate....................           5.0 %
     Dividend yield--Incentive Plan.............           0.0 %
     Volatility factor..........................           0.597
     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.

Prior to April 1,  2006,  the  Company  accounted  for  these  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 three
months ended July 3, 2005 is as follows:

   Net income, as reported                               $     7,322
   Deduct: Total stock-based employee
      compensation expense determined under
      fair value based method for all awards,
      net of related tax effects                                (346)
                                                        -------------
   Net income, pro forma                                 $     6,976
                                                        =============

   Basic income per share:
   As reported                                           $      0.50
                                                        =============
   Pro forma                                             $      0.48
                                                        =============

   Diluted income per share:
   As reported                                           $      0.49
                                                        =============
   Pro forma                                             $      0.46
                                                        =============

The following table summarizes stock option activity related to the Company's
plans for the three months ended July 2, 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                                30,000                25.74
       Exercised                            (144,218)               11.96
       Cancelled                             (27,500)                7.76
                                      ----------------------------------------------------------------------------------

    Outstanding at July 2, 2006              990,400         $      11.72              6.4            $     10,145
                                      ==================================================================================
    Exercisable at July 2, 2006              607,275         $      12.70              5.2            $      5,585
                                      ==================================================================================
</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 July 2, 2006.  The  aggregate
intrinsic  value of outstanding  options as of July 2, 2006 is calculated as the
difference  between the exercise price of the underlying  options and the market
price of our common  shares for the 940,300  options that were  in-the-money  at
that date. The aggregate  intrinsic  value of exercisable  options as of July 2,
2006  is  calculated  as  the  difference  between  the  exercise  price  of the
underlying  options  and the market  price of our common  shares for the 587,175
exercisable  options that were  in-the-money at that date. The Company's closing
stock price was $21.74 as of July 2, 2006.  The total  intrinsic  value of stock
options  exercised  during the first quarter of fiscal 2007 was $2,206 ($201 for
fiscal 2006).

Cash received from option exercises under all share-based  payment  arrangements
for the quarter  ended July 2, 2006 was $1,725.  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  July 2,  2006,  $1,300  of  unrecognized  compensation  cost  related  to
non-vested  stock options is expected to be recognized  over a  weighted-average
period of approximately 3 years.

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.

3.       INVENTORIES

Inventories consisted of the following:
                                            JULY 2,           MARCH 31,
                                             2006               2006
                                          ----------        -----------
At cost - FIFO basis:
Raw materials..........................   $   43,566        $    41,134
Work-in-process........................       13,576             12,199
Finished goods.........................       35,916             33,424
                                          ----------        -----------
                                              93,058             86,757
LIFO cost less than FIFO cost..........      (12,033)           (11,912)
                                          ----------        -----------
Net inventories........................   $   81,025        $    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

During the first three-months of fiscal 2007, the Company recorded restructuring
costs  of $4 for  severance  which  are  expensed  on an as  incurred  basis  in
accordance  with SFAS No.  146  "Accounting  for Costs  Associated  with Exit or
Disposal  Activities."  All of these costs are related to the Products  segment.
The liability as of July 2, 2006 consists primarily of environmental remediation
costs  accrued in  accordance  with SFAS No. 143 and costs  associated  with the
preparation and maintenance of non-operating  facilities prior to disposal which
were accrued prior to the adoption of SFAS No. 146.


                                     - 8 -
<PAGE>

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
                                                       =============================================
</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:

                                                     THREE MONTHS ENDED
                                                     ------------------
                                                   JULY 2,            JULY 3,
                                                    2006               2005
                                                    ----               ----
      Service costs..........................   $    1,049         $    1,088
      Interest cost..........................        1,879              1,737
      Expected return on plan assets.........       (1,831)            (1,654)
      Net amortization.......................          623                508
                                                ----------         ----------
      Net periodic pension cost..............   $    1,720         $    1,679
                                                ==========         ==========

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:

                                                     THREE MONTHS ENDED
                                                   JULY 2,            JULY 3,
                                                    2006               2005
                                                    ----               ----
      Service costs..........................   $        2         $        2
      Interest cost .........................          161                188
      Amortization of plan net losses........          100                103
                                                ----------         ----------
      Net periodic postretirement cost.......   $      263         $      293
                                                ==========         ==========

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 44.0% and 18.3% in the fiscal  2007 and 2006  quarters,
respectively. The fiscal 2007 percentage varies from the U.S. statutory rate due
to $798 of  non-deductible  stock  option  expense.  The 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 and  jurisdictional
mix.  Therefore,  income tax expense  primarily  resulted from non-U.S.  taxable
income and state  taxes on U.S.  taxable  income.  During the fourth  quarter of
fiscal 2006, as a result of the increased  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.


                                     - 9 -
<PAGE>


7.       EARNINGS PER SHARE

The following table sets forth the computation of basic and diluted earnings per
share:

<TABLE>
<CAPTION>
                                                                  THREE MONTHS ENDED
                                                                  ------------------
                                                                 JULY 2,        JULY 3,
                                                                  2006           2005
                                                                  ----           ----
Numerator for basic and diluted earnings per share:
<S>                                                           <C>             <C>
  Net income                                                  $    5,572      $   7,322
                                                              ==========      =========

Denominators:
  Weighted-average common stock outstanding -
      denominator for basic EPS                                   18,431         14,672

  Effect of dilutive employee stock options                          530            357
                                                              ----------      ---------

  Adjusted weighted-average common stock
     outstanding and assumed conversions -
     denominator for diluted EPS                                  18,961         15,029
                                                              ==========      =========
</TABLE>

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 three months ended July 2, 2006 and July
3, 2005, is as follows:

<TABLE>
<CAPTION>

                                                  THREE MONTHS ENDED JULY 2, 2006
                                                  -------------------------------
                                           PRODUCTS          SOLUTIONS            TOTAL
                                           --------          ---------            -----
<S>                                      <C>                <C>               <C>
 Sales to external customers............ $   128,139        $    18,555       $   146,694
 Income from operations.................      16,809                971            17,780
 Depreciation and amortization..........       1,889                216             2,105
 Total assets...........................     514,909             37,766           552,675

                                                  THREE MONTHS ENDED JULY 3, 2005
                                                  -------------------------------
                                           PRODUCTS          SOLUTIONS            TOTAL
                                           --------          ---------            -----
 Sales to external customers............ $   123,881        $    16,996       $   140,877
 Income from operations.................      14,128                494            14,622
 Depreciation and amortization..........       2,035                297             2,332
 Total assets...........................     452,810             33,451           486,261

</TABLE>

                                     - 10 -
<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 JULY 2, 2006
Current assets:
<S>                                                  <C>          <C>           <C>           <C>          <C>
 Cash and cash equivalents                           $     (501)  $   (1,164)   $  21,592     $        -   $   19,927
 Trade accounts receivable and unbilled revenues         62,869          272       50,852              -      113,993
 Inventories                                             36,220       20,335       26,985         (2,515)      81,025
 Other current assets                                     5,597        1,417       10,609              -       17,623
                                                   --------------------------------------------------------------------
  Total current assets                                  104,185       20,860      110,038         (2,515)     232,568
 Property, plant, and equipment, net                     24,462       11,515       19,684              -       55,661
 Goodwill and other intangibles, net                     89,827       58,035       39,843              -      187,705
 Intercompany                                            87,177      (88,931)     (72,890)        74,644            -
 Other assets                                            93,674      197,328       25,875       (240,136)      76,741
                                                   --------------------------------------------------------------------
  Total assets                                       $  399,325   $  198,807    $ 122,550     $ (168,007)  $  552,675
                                                   ====================================================================


Current liabilities                                  $   44,065   $   18,358    $  48,102     $     (442)  $  110,083
 Long-term debt, less current portion                   176,468            -          505              -      176,973
 Other non-current liabilities                           15,765        8,623       26,661              -       51,049
                                                   --------------------------------------------------------------------
  Total liabilities                                     236,298       26,981       75,268           (442)     338,105

Shareholders' equity                                    163,027      171,826       47,282       (167,565)     214,570
                                                   --------------------------------------------------------------------
  Total liabilities and shareholders' equity         $  399,325   $  198,807    $ 122,550     $ (168,007)  $  552,675
                                                   ====================================================================



FOR THE THREE MONTHS ENDED JULY 2, 2006
Net sales                                            $   71,491   $   42,498    $  45,254     $  (12,549)  $  146,694
Cost of products sold                                    52,145       31,521       33,144        (12,399)     104,411
                                                   --------------------------------------------------------------------
Gross profit                                             19,346       10,977       12,110           (150)      42,283
                                                   --------------------------------------------------------------------
Selling, general and administrative expenses             11,276        4,286        8,894              -       24,456
Restructuring charges                                         4            -            -              -            4
Amortization of intangibles                                  25            1           17              -           43
                                                   --------------------------------------------------------------------
                                                         11,305        4,287        8,911              -       24,503
                                                   --------------------------------------------------------------------
Income (loss) from operations                             8,041        6,690        3,199           (150)      17,780
Interest and debt expense (income)                        4,717         (293)          88              -        4,512
Other (income) and expense, net                           4,363           (7)        (786)             -        3,570
                                                   --------------------------------------------------------------------
(Loss) income before income tax expense                  (1,039)       6,990        3,897           (150)       9,698
Income tax expense                                          144        2,784        1,337              -        4,265
                                                   --------------------------------------------------------------------
(Loss) income from continuing operations                 (1,183)       4,206        2,560           (150)       5,433
Income from discontinued operations                         139            -            -              -          139
                                                   --------------------------------------------------------------------
Net (loss) income                                    $   (1,044)  $    4,206    $   2,560     $     (150)  $    5,572
                                                   ====================================================================




                                     - 11 -
<PAGE>

                                                      Parent      Guarantors  Nonguarantors Eliminations  Consolidated
                                                   --------------------------------------------------------------------
FOR THE THREE MONTHS ENDED JULY 2, 2006
OPERATING ACTIVITIES:
Net cash provided by operating activities            $    2,021   $      527    $   2,241     $        -   $    4,789
                                                   --------------------------------------------------------------------

INVESTING ACTIVITIES:
Sale of marketable securities, net                            -            -           47              -           47
Capital expenditures                                     (1,041)        (145)        (717)             -       (1,903)
Proceeds from discontinued operations note
     receivable - revised                                   139            -            -              -          139
                                                   --------------------------------------------------------------------
Net cash used by investing activities                      (902)        (145)        (670)             -       (1,717)
                                                   --------------------------------------------------------------------

FINANCING ACTIVITIES:
Proceeds from stock options exercised                     1,725            -            -              -        1,725
Net borrowings under revolving line-of-credit
     agreements                                          11,632            -          211              -       11,843
Repayment of debt                                       (42,328)           -           26              -      (42,302)
Deferred financing costs incurred                          (325)           -            -              -         (325)
Other                                                       145            -            -              -          145
                                                   --------------------------------------------------------------------
Net cash (used) provided by financing activities        (29,151)           -          237              -      (28,914)
EFFECT OF EXCHANGE RATE CHANGES ON CASH                       -          (85)         256              -          171
                                                   --------------------------------------------------------------------
Net change in cash and cash equivalents                 (28,032)         297        2,064              -      (25,671)
Cash and cash equivalents at beginning of period         27,531       (1,461)      19,528              -       45,598
                                                   --------------------------------------------------------------------
Cash and cash equivalents at end of period           $     (501)  $   (1,164)   $  21,592     $        -   $   19,927
                                                   ====================================================================




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



                                     - 12 -
<PAGE>

                                                      Parent      Guarantors  Nonguarantors Eliminations  Consolidated
                                                   --------------------------------------------------------------------

FOR THE THREE MONTHS ENDED JULY 2, 2005
Net sales                                            $   67,049   $   37,922    $  42,193     $   (6,287)  $  140,877
Cost of products sold                                    49,881       28,790       31,495         (5,832)     104,334
                                                   --------------------------------------------------------------------
Gross profit                                             17,168        9,132       10,698           (455)      36,543
                                                   --------------------------------------------------------------------
Selling, general and administrative expenses             10,225        3,965        7,643              -       21,833
Restructuring charges                                        26            -            -              -           26
Amortization of intangibles                                  44            1           17              -           62
                                                   --------------------------------------------------------------------
                                                         10,295        3,966        7,660              -       21,921
                                                   --------------------------------------------------------------------
Income (loss) from operations                             6,873        5,166        3,038           (455)      14,622
Interest and debt expense                                 5,573        1,053           90              -        6,716
Other (income) and expense, net                            (181)          (3)        (605)             -         (789)
                                                   --------------------------------------------------------------------
Income (loss) before income tax expense                   1,481        4,116        3,553           (455)       8,695
Income tax expense                                          175          309        1,103              -        1,587
                                                   --------------------------------------------------------------------
Income (loss) from continuing operations                  1,306        3,807        2,450           (455)       7,108
Income from discontinued operations                         214            -            -              -          214
                                                   --------------------------------------------------------------------
Net income (loss)                                    $    1,520   $    3,807    $   2,450     $     (455)  $    7,322
                                                   ====================================================================



FOR THE THREE MONTHS ENDED JULY 2, 2005
OPERATING ACTIVITIES:
Net cash provided (used) by operating activities     $    6,655   $     (160)   $   4,142     $        -   $   10,637
                                                   --------------------------------------------------------------------

INVESTING ACTIVITIES:
Purchase of marketable securities, net                        -            -         (688)             -         (688)
Capital expenditures, net                                (1,283)        (151)        (240)             -       (1,674)
Proceeds from discontinued operations note
     receivable - revised                                   214            -            -              -          214
                                                   --------------------------------------------------------------------
Net cash used by investing activities                    (1,069)        (151)        (928)             -       (2,148)
                                                   --------------------------------------------------------------------

FINANCING ACTIVITIES:
Proceeds from issuance of common stock                        1            -            -              -            1
Net borrowings under revolving
     line-of-credit agreements                            4,040            -          165              -        4,205
Repayment of debt                                        (8,109)           -          (77)             -       (8,186)
Deferred financing costs incurred                           (98)           -            -              -          (98)
Other                                                       145            -            -              -          145
                                                   --------------------------------------------------------------------
Net cash (used) provided by financing activities         (4,021)           -           88              -       (3,933)
EFFECT OF EXCHANGE RATE CHANGES ON CASH                    (166)           8         (250)             -         (408)
                                                   --------------------------------------------------------------------
Net change in cash and cash equivalents                   1,399         (303)       3,052              -        4,148
Cash and cash equivalents at beginning of period          1,019         (697)       9,157              -        9,479
                                                   --------------------------------------------------------------------
Cash and cash equivalents at end of period           $    2,418   $   (1,000)   $  12,209     $        -   $   13,627
                                                   ====================================================================

</TABLE>

                                     - 13 -
<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, 2031 and March 31, 2082 to range between
$5,500 and $19,000 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, 2031 and ranges from $5,500
to $6,500 as of July 2, 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 $6,300 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  $250 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:

                                                       THREE MONTHS ENDED
                                                       ------------------
                                                     JULY 2,         JULY 3,
                                                      2006            2005
                                                      ----            ----
      Loss (gain) on bond redemptions............  $   4,583       $    (12)
      Investment income .........................       (474)          (576)
      Interest income............................       (402)          (157)
      Other......................................       (137)           (44)
                                                   ---------       --------
      Total other (income) and expense, net......  $   3,570       $   (789)
                                                   =========       ========


12.      NEW ACCOUNTING STANDARDS

In June 2006,  the  Financial  Accounting  Standards  Board  (FASB)  issued FASB
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 evaluating  the
impact of adopting FIN 48.


                                     - 14 -
<PAGE>

In May 2005, the Financial Accounting Standards Board (FASB) issued Statement of
Financial  Accounting  Standards (SFAS) No. 154,  "Accounting  Changes and Error
Corrections" which replaces APB Opinion No. 20,  "Accounting  Changes," and SFAS
No. 3, "Reporting Accounting Changes in Interim Financial  Statements." SFAS No.
154  changes  the  requirements  for and  reporting  of a change  in  accounting
principle. This Statement was effective for changes in accounting methods during
fiscal  years  beginning  after  December  15,  2005 and did not have a material
impact  on the  Company's  consolidated  results  of  operations  and  financial
condition.

In  November  2004,  the FASB  issued  SFAS No.  151,  "Inventory  Costs," as an
amendment  to ARB No.  43,  Chapter  4,  "Inventory  Pricing,"  to  clarify  the
accounting  for abnormal  amounts of idle facility  expense,  freight,  handling
costs and wasted materials (spoilage).  This Statement requires that these items
be recognized  as  current-period  charges and requires the  allocation of fixed
production overheads to inventory based on the normal capacity of the production
facilities.  This Statement was effective for inventory  costs  incurred  during
fiscal years beginning after June 15, 2005 and did not have a material impact on
our consolidated financial statements.





                                     - 15 -
<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  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.  Integration  of the
operations of the acquired businesses with our previously existing businesses is
substantially  complete.   Ongoing  integration  of  these  businesses  includes
improving our productivity,  further reducing our excess manufacturing  capacity
and extending our sales  activities to the European and Asian  marketplaces.  We
are executing those initiatives through our Lean Manufacturing efforts, facility
rationalization  program, new product development and expanded sales activities.
Shareholder value will be enhanced through continued emphasis on the 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 development of 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.  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  quarter 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
such  indicators  as  U.S.  Industrial  Capacity  Utilization,  which  has  been
increasing  since July 2003.  In addition,  we continue to monitor the potential
impact of global and domestic trends, including rising energy costs, steel price
fluctuations,  rising  interest rates and  uncertainty in some 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, generating $2,100 from real estate sales which has been, and
will continue to be used to repay our outstanding debt. We will continue to sell
surplus real estate  resulting  from our facility  rationalization  projects and
those sales will result in gains or losses.


                                     - 16 -
<PAGE>

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 $38,000 to $43,000
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
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 ENDED JULY 2, 2006 AND JULY 3, 2005
Net sales in the fiscal 2007 quarter ended July 2, 2006 were $146,694, up $5,817
or 4.1% from the fiscal 2006 quarter  ended July 3, 2005.  Sales in the Products
segment  increased by $4,258 or 3.4% from the  previous  year's  quarter.  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 $2,300 in the quarter ended
July 2, 2006.  Translation  of  foreign  currencies,  particularly  the Euro and
Canadian  dollar,  into U.S.  dollars  contributed  $1,100  toward the  Products
segment  increase  in sales for the  quarter  ended July 2,  2006.  Sales in the
Solutions  segment  increased  9.2% or $1,559 for the quarter ended July 2, 2006
when compared to the same period in the prior year. The increase in this segment
for the quarter ended July 2, 2006 is primarily due to  improvement  in our tire
shredder  business.  Translation of foreign currencies into U.S. dollars reduced
sales in the Solutions segment by $200 for the quarter ended July 2, 2006. Sales
in the segments are summarized as follows:

                                                 THREE MONTHS ENDED
                                                 ------------------
                                        JULY 2,     JULY 3,          CHANGE
                                         2006        2005       AMOUNT      %
                                         ----        ----       ------     ---
Products..........................   $  128,139   $ 123,881    $  4,258    3.4
Solutions.........................       18,555      16,996       1,559    9.2
                                     ----------   ---------    --------
Net sales.........................   $  146,694   $ 140,877    $  5,817    4.1
                                     ==========   =========    ========

Gross profit and gross profit  margins by operating  segment are  summarized  as
follows:

                                               THREE MONTHS ENDED
                                               ------------------
                                        JULY 2, 2006         JULY 3, 2005
                                        ------------         ------------
                                          $        %            $        %
                                         ---      ---          ---      ---
Products..........................   $  39,417   30.8      $  34,220   27.6
Solutions.........................       2,866   15.4          2,323   13.7
                                     ---------             ---------
   Total Gross Profit.............   $  42,283   28.8      $  36,543   25.9
                                     =========             =========

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 previous cost containment  activities.  The Solutions  segment gross
profit margin was impacted by product mix.

Selling  expenses were $15,367 and $13,658 in the fiscal 2007 and 2006 quarters,
respectively.  The  changes  in  expense  dollars  were  impacted  by  increased
investment in new markets ($450), increased salaries and fringe benefits ($380),
stock based and  discretionary  compensation  expense ($225),  increased travel,
catalog,  advertising and promotional expenses ($175),  translation from changes
in foreign  exchange  rates ($200) and  increased  variable  selling  costs as a
result of higher  sales  volume.  As a  percentage  of  consolidated  net sales,
selling  expenses  were  10.5% and 9.7% in the  fiscal  2007 and 2006  quarters,
respectively.


                                     - 17 -
<PAGE>

General and  administrative  expenses  were $9,089 and $8,175 in the fiscal 2007
and 2006 quarters,  respectively.  The increase is primarily the result of stock
based compensation  expense ($425),  increased research and development  ($200),
increased  training,  recruiting and relocation expenses ($200). As a percentage
of consolidated  net sales,  general and  administrative  expenses were 6.2% and
5.8% in the fiscal 2007 and 2006 quarters, respectively.

Restructuring  charges  were $4 and $26 in the  fiscal  2007 and 2006  quarters,
respectively.

Amortization  of  intangibles  was $43  and  $62 in the  fiscal  2007  and  2006
quarters, respectively.

Interest  and debt  expense  was $4,512  and $6,716 in the fiscal  2007 and 2006
quarters,  respectively.  The decrease is the result of lower debt levels.  As a
percentage  of  consolidated  net sales,  interest and debt expense was 3.1% and
4.8% in the fiscal 2007 and 2006 quarters, respectively.

Other  (income)  and  expense,  net was $3,570 and $(789) in the fiscal 2007 and
2006 quarters,  respectively.  The 2007 quarter expense consisted primarily of a
$4,583 loss on early  extinguishment  of debt,  offset by $474 of realized gains
and  investment  income on  investments  within our  captive  insurance  company
portfolio  and $402 of  interest  income.  The  2006  quarter  income  consisted
primarily of $576 of realized gains and investment income on investments  within
our captive insurance company portfolio.

Income tax expense as a percentage of income from continuing  operations  before
income tax  expense  was 44.0% and 18.3% in the fiscal  2007 and 2006  quarters,
respectively. The fiscal 2007 percentage varies from the U.S. statutory rate due
to $798 of  non-deductible  stock  option  expense.  The 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 and  jurisdictional
mix.  Therefore,  income tax expense  primarily  resulted from non-U.S.  taxable
income and state  taxes on U.S.  taxable  income.  During the fourth  quarter of
fiscal 2006, as a result of the increased  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.

LIQUIDITY AND CAPITAL RESOURCES

The Company's Revolving Credit Facility 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 unused portion totaled $52,632,
net of outstanding  borrowings of $11,632 and  outstanding  letters of credit of
$10,736 as of July 2, 2006.  Interest  is  payable at varying  Eurodollar  rates
based on LIBOR or prime plus spreads determined by our leverage ratio, amounting
to 100 or 0 basis points  applied to each,  respectively.  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,
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.


                                     - 18 -
<PAGE>

The 10% Notes issued on July 22, 2003 amounted to $28,836 as of July 2, 2006 and
are due August 1, 2010. 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.

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,  improving working capital utilization,
and divestiture of excess facilities.

Net cash provided by operating  activities was $4,789 for the quarter ended July
2, 2006  compared  to $10,637  for the  quarter  ended July 3, 2005.  The $5,848
decrease is the result of stronger operating  performance $3,966 being offset by
changes  in  net  working  capital  components,   primarily  increased  accounts
receivable,  inventories,  prepaid expenses and accounts payable,  and decreased
accrued liabilities.

Net cash used in investing  activities  was $1,717 for the quarter ended July 2,
2006 compared to $2,148 for the quarter ended July 3, 2005. The $431 decrease in
cash  used is the  result of sales of  marketable  equity  securities  of $47 in
fiscal 2007 compared to the purchase of marketable  securities of $688 in fiscal
2006.  This decrease in net cash used in investing  activities  was offset by an
increase in capital  expenditures  to $1,903 in fiscal 2007 compared with $1,674
in fiscal 2006.

Net cash used in financing  activities was $28,914 for the quarter ended July 2,
2006 compared to $3,993 for the quarter ended July 3, 2005. The $24,921 increase
is the result of $34,116  increase in debt  repayment,  offset by an increase of
$7,278 in net borrowings under revolving line of credit agreements and $1,724 of
proceeds from stock options exercised.

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 three months ended July
2, 2006 and July 3, 2005 were $1,903 and $1,674, respectively. We expect capital
spending for fiscal 2007 to be in the range of $9 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.


                                     - 19 -
<PAGE>


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 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,  workers
compensation  insurance,  pensions as well as energy and business insurance have
exceeded general inflation levels. We generally incorporate those cost increases
into our sales price  increases as well as  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,  gain or loss on
early retirement of bonds, restructuring charges and other costs attributable to
our  facility  rationalization  program,  divestitures,   acquisitions  and  the
magnitude of rationalization integration costs. 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 FASB
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 evaluating  the
impact of adopting FIN 48.

In May 2005, the Financial Accounting Standards Board (FASB) issued Statement of
Financial  Accounting  Standards (SFAS) No. 154,  "Accounting  Changes and Error
Corrections" which replaces APB Opinion No. 20,  "Accounting  Changes," and SFAS
No. 3, "Reporting Accounting Changes in Interim Financial  Statements." SFAS No.
154  changes  the  requirements  for and  reporting  of a change  in  accounting
principle. This Statement was effective for changes in accounting methods during
fiscal  years  beginning  after  December  15,  2005 and did not have a material
impact on our consolidated results of operations and financial condition.

In  November  2004,  the FASB  issued  SFAS No.  151,  "Inventory  Costs," as an
amendment  to ARB No.  43,  Chapter  4,  "Inventory  Pricing,"  to  clarify  the
accounting  for abnormal  amounts of idle facility  expense,  freight,  handling
costs and wasted materials (spoilage).  This Statement requires that these items
be recognized  as  current-period  charges and requires the  allocation of fixed
production overheads to inventory based on the normal capacity of the production
facilities.  This Statement was effective for inventory  costs  incurred  during
fiscal years beginning after June 15, 2005 and did not have a material impact on
our consolidated financial statements.

                                     - 20 -
<PAGE>

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.


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 July 2, 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 July 2,  2006.  There  were no changes in the
Company's  internal  controls or in other factors during our first quarter ended
July 2, 2006.


                                     - 21 -
<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 - none.

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.





                                     - 22 -
<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: AUGUST 11, 2006                     /S/ KAREN L. HOWARD
      ---------------                     -------------------------------------
                                          Karen L. Howard
                                          Vice President and Treasurer and Chief
                                            Financial Officer (Principal
                                            Financial Officer)


                                     - 23 -