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 January 1, 2006

                                       or

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

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

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

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

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

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

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


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


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

Indicate  by check mark  whether  the  registrant  is an  accelerated  filer (as
defined in Rule 12b-2 of the Securities Exchange Act of 1934): [X] Yes [ ] No

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 January  30, 2006 was:
18,300,397 shares.


<PAGE>


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


                                                                          PAGE #
PART I.  FINANCIAL INFORMATION

Item 1.    Condensed Consolidated Financial Statements (Unaudited)

           Condensed consolidated balance sheets -
              January 1, 2006 and March 31, 2005                               2

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

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

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

           Notes to condensed consolidated financial statements -
              January 1, 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         22

Item 4.    Disclosure Controls and Procedures                                 22

PART II.  OTHER INFORMATION

Item 1.    Legal Proceedings - none.                                          23

Item 2.    Unregistered Sales of Equity Securities and
              Use of Proceeds - none.                                         23

Item 3.    Defaults upon Senior Securities - none.                            23

Item 4.    Submission of Matters to a Vote of Security Holders - none         23

Item 5.    Other Information - none.                                          23

Item 6.    Exhibits and Reports on Form 8-K                                   23

                                      - 1 -
<PAGE>


PART I.     FINANCIAL INFORMATION

Item 1.     Condensed Consolidated Financial Statements (Unaudited)

                          COLUMBUS MCKINNON CORPORATION
                      CONDENSED CONSOLIDATED BALANCE SHEETS

                                                  JANUARY 1,          MARCH 31,
                                                     2006               2005
                                                  ----------         ----------
                                                  (UNAUDITED)
ASSETS:                                                  (IN THOUSANDS)
Current assets:
      Cash and cash equivalents                   $   41,788         $    9,479
      Trade accounts receivable                       82,059             88,974
      Unbilled revenues                               11,407              8,848
      Inventories                                     75,078             77,626
      Prepaid expenses                                13,883             14,198
                                                  ----------         ----------
Total current assets                                 224,215            199,125
Property, plant, and equipment, net                   53,198             57,237
Goodwill and other intangibles, net                  186,569            187,285
Marketable securities                                 25,809             24,615
Deferred taxes on income                               4,353              6,122
Other assets                                           6,164              6,487
                                                  ----------         ----------
Total assets                                      $  500,308         $  480,871
                                                  ==========         ==========

LIABILITIES AND SHAREHOLDERS' EQUITY:
Current liabilities:
      Notes payable to banks                      $    2,951         $    4,839
      Trade accounts payable                          35,137             33,688
      Accrued liabilities                             54,434             51,962
      Restructuring reserve                              107                144
      Current portion of long-term debt                  192              5,819
                                                  ----------         ----------
Total current liabilities                             92,821             96,452
Senior debt, less current portion                     75,289            115,735
Subordinated debt                                    136,000            144,548
Other non-current liabilities                         44,730             42,369
                                                  ----------         ----------
Total liabilities                                    348,840            399,104
                                                  ----------         ----------
Shareholders' equity
      Common stock                                       182                149
      Additional paid-in capital                     164,016            104,078
      Retained earnings (accumulated deficit)          3,354             (8,644)
      ESOP debt guarantee                             (4,108)            (4,554)
      Unearned restricted stock                          (29)                (6)
      Accumulated other comprehensive loss           (11,947)            (9,256)
                                                  ----------         ----------
Total shareholders' equity                           151,468             81,767
                                                  ----------         ----------
Total liabilities and shareholders' equity        $  500,308         $  480,871
                                                  ==========         ==========

     SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.


                                      - 2 -

<PAGE>

<TABLE>
<CAPTION>

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



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

<S>                                               <C>         <C>          <C>          <C>
Net sales                                         $ 133,322   $ 125,913    $ 408,911    $ 370,282
Cost of products sold                                98,391      95,914      302,279      278,889
                                                  ---------   ---------    ---------    ---------
Gross profit                                         34,931      29,999      106,632       91,393
                                                  ---------   ---------    ---------    ---------

Selling expenses                                     13,281      13,356       40,019       38,326
General and administrative expenses                   8,392       6,918       25,106       21,920
Restructuring charges                                    83         191          320          408
Amortization of intangibles                              61          78          184          231
                                                  ---------   ---------    ---------    ---------
                                                     21,817      20,543       65,629       60,885
                                                  ---------   ---------    ---------    ---------

Income from operations                               13,114       9,456       41,003       30,508
Interest and debt expense                             6,268       6,837       19,617       21,026
Other (income) and expense, net                       4,177        (755)       5,252       (1,344)
                                                  ---------   ---------    ---------    ---------
Income from continuing operations before
   income tax expense                                 2,669       3,374       16,134       10,826
Income tax expense                                    1,471       1,183        4,779        2,893
                                                  ---------   ---------    ---------    ---------
Income from continuing operations                     1,198       2,191       11,355        7,933
Income from discontinued operations                     215         214          643          428
                                                  ---------   ---------    ---------    ---------
Net income                                            1,413       2,405       11,998        8,361
Retained earnings
    (accumulated deficit) - beginning of period       1,941     (19,398)      (8,644)     (25,354)
                                                  ---------   ---------    ---------    ---------
Retained earnings
   (accumulated deficit) - end of period          $   3,354   $ (16,993)   $   3,354    $ (16,993)
                                                  =========   =========    =========    =========

Basic income per share:
   Income from continuing operations              $    0.08   $    0.15    $    0.74    $    0.54
   Income from discontinued operations                 0.01        0.01         0.04         0.03
                                                  ---------   ---------    ---------    ---------
   Net income                                     $    0.09   $    0.16    $    0.78    $    0.57
                                                  =========   =========    =========    =========

Diluted income per share:
   Income from continuing operations              $    0.07   $    0.15    $    0.71    $    0.54
   Income from discontinued operations                 0.01        0.01         0.04         0.03
                                                  ---------   ---------    ---------    ---------
   Net income                                     $    0.08   $    0.16    $    0.75    $    0.57
                                                  =========   =========    =========    =========
</TABLE>

     SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.

                                      - 3 -
<PAGE>

<TABLE>
<CAPTION>


                          COLUMBUS MCKINNON CORPORATION
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
                                                                       NINE MONTHS ENDED
                                                                       -----------------
                                                                  JANUARY 1,         JANUARY 2,
                                                                     2006               2005
                                                                  ----------         ----------
                                                                          (IN THOUSANDS)
OPERATING ACTIVITIES:
<S>                                                               <C>                <C>
Income from continuing operations                                 $   11,355         $    7,933
Adjustments to reconcile income from
   continuing operations to net cash
   provided by operating activities:
     Depreciation and amortization                                     6,809              7,201
     Deferred income taxes                                             1,769              1,823
     Gain on sale of real estate/investments                          (1,794)                 -
     Loss (gain) on early retirement of bonds                          6,432                (93)
     Amortization/write-off of deferred financing costs                2,786              1,029
     Changes in operating assets and liabilities:
           Trade accounts receivable and unbilled revenues             2,658               (172)
           Inventories                                                 2,139             (9,937)
           Prepaid expenses                                              321              1,990
           Other assets                                                 (197)              (220)
           Trade accounts payable                                      2,141               (447)
           Accrued and non-current liabilities                         4,090               (694)
                                                                  ----------         ----------
Net cash provided by operating activities                             38,509              8,413
                                                                  ----------         ----------

INVESTING ACTIVITIES:
Sale of marketable securities, net                                        90                957
Capital expenditures                                                  (4,738)            (3,169)
Proceeds from sale of facilities and surplus real estate               2,091                  -
Net assets held for sale                                                   -                375
                                                                  ----------         ----------
Net cash used in investing activities                                 (2,557)            (1,837)
                                                                  ----------         ----------

FINANCING ACTIVITIES:
Proceeds from issuance of common stock/options exercised              59,944                  -
Net (payments) borrowings under revolving
     line-of-credit agreements                                        (1,417)             2,906
Repayment of debt                                                   (196,881)           (13,244)
Proceeds from issuance of long-term debt                             136,000                  -
Deferred financing costs incurred                                     (2,357)               (24)
Other                                                                    446                427
                                                                  ----------         ----------
Net cash used in financing activities                                 (4,265)            (9,935)
EFFECT OF EXCHANGE RATE CHANGES ON CASH                                  (21)               454
                                                                  ----------         ----------
Net cash provided by (used in) continuing operations                  31,666             (2,905)
NET CASH PROVIDED BY DISCONTINUED OPERATIONS                             643                428
                                                                  ----------         ----------
Net change in cash and cash equivalents                               32,309             (2,477)
Cash and cash equivalents at beginning of period                       9,479             11,101
                                                                  ----------         ----------
Cash and cash equivalents at end of period                        $   41,788         $    8,624
                                                                  ==========         ==========
</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      NINE MONTHS ENDED
                                                  ------------------      -----------------
                                                JANUARY 1,  JANUARY 2,  JANUARY 1,  JANUARY 2,
                                                   2006        2005        2006        2005
                                                   ----        ----        ----        ----
                                                                (IN THOUSANDS)

<S>                                              <C>         <C>         <C>         <C>
Net income                                       $  1,413    $  2,405    $ 11,998    $  8,361
                                                 --------    --------    --------    --------
Other comprehensive (loss) income, net of tax:
   Foreign currency translation adjustments          (818)      4,136      (2,792)      5,074
   Unrealized gain on investments:
     Unrealized holding gains arising
       during the period                              260         971       1,284         580
     Reclassification adjustment for
       gains included in net income                  (192)       (262)     (1,183)       (253)
                                                 --------    --------    --------    --------
                                                       68         709         101         327
                                                 --------    --------    --------    --------
Total other comprehensive (loss) income              (750)      4,845      (2,691)      5,401
                                                 --------    --------    --------    --------
Comprehensive income                             $    663    $  7,250    $  9,307    $ 13,762
                                                 ========    ========    ========    ========

</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)
                                 JANUARY 1, 2006

1.       DESCRIPTION OF BUSINESS

The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with U.S.  generally accepted  accounting  principles for
interim  financial  information.  In the opinion of management,  all adjustments
(consisting  of  normal  recurring  accruals)  considered  necessary  for a fair
presentation of the financial  position of Columbus  McKinnon  Corporation  (the
Company)  at January 1, 2006,  and the  results of its  operations  and its cash
flows for the three and nine-month  periods ended January 1, 2006 and January 2,
2005,  have been included.  Results for the period ended January 1, 2006 are not
necessarily  indicative  of the results  that may be expected for the year ended
March 31,  2006.  The balance  sheet at March 31, 2005 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, 2005.

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  has two  stock-based  employee  compensation  plans in effect.  The
Company   accounts  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 is 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 following table illustrates the effect on net income and earnings
per share if the Company had applied the fair value  recognition of SFAS No. 123
"Accounting for Stock-Based Compensation", to stock-based employee compensation:



                                      - 6 -

<PAGE>

<TABLE>
<CAPTION>


                                                   THREE MONTHS ENDED              NINE MONTHS ENDED
                                               ----------------------------------------------------------
                                               JANUARY 1,      JANUARY 2,      JANUARY 1,      JANUARY 2,
                                                  2006            2005            2006            2005
                                               ----------------------------------------------------------
<S>                                            <C>             <C>             <C>             <C>
   Net income, as reported.................... $    1,413      $    2,405      $   11,998      $    8,361
   Deduct: Total stock-based employee
      compensation expense determined under
      fair value based method for all awards,
      net of related tax effects                     (186)           (495)           (765)           (864)
                                               ----------------------------------------------------------
   Net income, pro forma...................... $    1,227      $    1,910      $   11,233      $    7,497
                                               ==========================================================

   Basic income per share:
   As reported................................ $     0.09      $     0.16      $     0.78      $     0.57
                                               ==========================================================
   Pro forma.................................. $     0.07      $     0.13      $     0.73      $     0.51
                                               ==========================================================

   Diluted income per share:
   As reported................................ $     0.08      $     0.16      $     0.75      $     0.57
                                               ==========================================================
   Pro forma.................................. $     0.07      $     0.13      $     0.71      $     0.51
                                               ==========================================================
</TABLE>

During the first nine months of fiscal 2006,  stock  options for 323,600  shares
were exercised resulting in proceeds to the Company of $3,072.

3.       INVENTORIES

Inventories consisted of the following:
                                                  JANUARY 1,          MARCH 31,
                                                     2006               2005
                                                  ----------         ----------
At cost - FIFO basis:
Raw materials...................................  $   40,768         $   42,283
Work-in-process.................................      11,872             10,238
Finished goods..................................      34,181             35,800
                                                  ----------         ----------
                                                      86,821             88,321
LIFO cost less than FIFO cost...................     (11,743)           (10,695)
                                                  ----------         ----------
Net inventories.................................  $   75,078         $   77,626
                                                  ==========         ==========

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 nine-months of fiscal 2006, the Company recorded  restructuring
costs of $320 for  severance and the  maintenance  of  non-operating  facilities
being held for sale which are  expensed  on an as incurred  basis in  accordance
with SFAS No.  146  "Accounting  for  Costs  Associated  with  Exit or  Disposal
Activities."  $194 and $126 of these  costs are  related  to the  Solutions  and
Products  segments,  respectively.  The  fiscal  2006  second  quarter  employee
restructuring charges are related to the termination of several employees within
our  industrial  crane and conveyor  businesses.  The liability as of January 1,
2006 consists primarily of 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.

                                      - 7 -

<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, 2005                                 $     16      $    128      $    144
    Fiscal 2006 first quarter restructuring charges..........        -            26            26
    Cash payments............................................      (13)          (35)          (48)
                                                              ------------------------------------
    Reserve at July 3, 2005                                   $      3      $    119      $    122
    Fiscal 2006 second quarter restructuring charges.........      178            33           211
    Cash payments............................................     (172)          (47)         (219)
                                                              ------------------------------------
    Reserve at October 2, 2005                                $      9      $    105      $    114
    Fiscal 2006 third quarter restructuring charges..........       81             2            83
    Cash payments............................................      (70)          (20)          (90)
                                                              ------------------------------------
    Reserve at January 1, 2006                                $     20      $     87      $    107
                                                              ====================================
</TABLE>

5.       NET PERIODIC BENEFIT COST

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

                                             THREE MONTHS ENDED              NINE MONTHS ENDED
                                             ------------------              -----------------
                                         JANUARY 1,      JANUARY 2,      JANUARY 1,      JANUARY 2,
                                            2006            2005            2006            2005
                                            ----            ----            ----            ----
<S>                                       <C>             <C>             <C>             <C>
      Service costs...................    $  1,088        $  1,190        $  3,264        $  3,570
      Interest cost...................       1,737           1,755           5,211           5,265
      Expected return on plan assets..      (1,654)         (1,645)         (4,962)         (4,935)
      Net amortization................         508             495           1,524           1,485
                                          --------        --------        --------        --------
      Net periodic pension cost.......    $  1,679        $  1,795        $  5,037        $  5,385
                                          ========        ========        ========        ========
</TABLE>

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, 2005.

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

                                             THREE MONTHS ENDED              NINE MONTHS ENDED
                                             ------------------              -----------------
                                         JANUARY 1,      JANUARY 2,      JANUARY 1,      JANUARY 2,
                                            2006            2005            2006            2005
                                            ----            ----            ----            ----
<S>                                       <C>             <C>             <C>             <C>
      Service costs...................    $      4        $      4        $     12        $     12
      Interest cost ..................         188             200             564             634
      Amortization of plan net losses.         101             105             303             356
                                          --------        --------        --------        --------
      Net periodic postretirement cost    $    293        $    309        $    879        $  1,002
                                          ========        ========        ========        ========
</TABLE>

On  December  8,  2003,   Congress  passed  the  Medicare   Prescription   Drug,
Improvement,  and Modernization Act of 2003 ("Medicare Act"). In March 2004, the
FASB issued Staff Position No. FAS 106-2 "Accounting and Disclosure Requirements
Related to the Medicare  Prescription  Drug Improvement and Modernization Act of
2003 ("FSP No.  106-2")," which provides  accounting  guidance on how to account
for the  effects  of the  Medicare  Act on  postretirement  plans  that  provide
prescription drug benefits.  The Medicare Act also requires certain  disclosures
regarding the effect of the subsidy provided by the Medicare Act.  Additionally,
FSP 106-2 provides two transition methods - retroactive to the date of enactment
or prospective from the date of adoption. The Company elected to adopt FAS 106-2
and apply the  prospective  transition  method in the  second  quarter of fiscal
2005. The accumulated post retirement benefit obligation decreased approximately
$2,200.

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, 2005.

                                      - 8 -
<PAGE>

6.       DEBT

During the second quarter of fiscal 2006, the Company issued  $136,000 of 8 7/8%
Senior Subordinated Notes (8 7/8% Notes) 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, the
Company 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.
The 8 7/8% Notes are  redeemable  at the option of the  Company,  in whole or in
part, at prices declining  annually from the Make-Whole Price (as defined in the
8 7/8% Notes agreement) 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.

Proceeds  from the 8 7/8%  Notes and cash on hand were  used to  repurchase  all
$142,375 of the outstanding 8 1/2% Senior  Subordinated Notes. The repurchase of
the 8 1/2% Notes  occurred  at a premium  resulting  in a pre-tax  loss on early
extinguishment  of debt of $2,298.  As a result of the  repurchase of the 8 1/2%
Notes,  $922 of pre-tax deferred  financing costs and $110 of the original issue
discount were written-off.  The net effect of these items, a $3,330 pre-tax loss
in the second  quarter of fiscal  2006,  is shown as part of other  (income) and
expense, net.

During  the third  quarter of fiscal  2006,  the  Company  used a portion of the
proceeds  from its stock  offering  (see Note 8) to  repurchase  $40,250  of the
outstanding  10% Senior Secured Notes.  The repurchase of the 10% Notes occurred
at a premium  resulting  in a pre-tax  loss on early  extinguishment  of debt of
$4,025. As a result of the repurchase of the 10% Notes, $925 of pre-tax deferred
financing costs was written-off. The net effect of these items, a $4,950 pre-tax
loss in the third quarter of fiscal 2006, is shown as part of other (income) and
expense, net.

7.       INCOME TAXES

Income tax expense as a percentage of income from continuing  operations  before
income tax expense  was 55.1%,  35.1%,  29.6%,  and 26.7% in the fiscal 2006 and
2005 quarters and the nine-month  periods then ended,  respectively.  The fiscal
2006  and  2005  percentages  vary  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 results
from non-U.S.  taxable income and state taxes on U.S. taxable income. The higher
effective   income  tax  rate  in  fiscal  2006   reflects  the  loss  on  early
extinguishment of debt which reduced U.S. taxable income by $4,950 and $8,280 in
the  quarter  and  nine-month  period  respectively,  but did not affect our tax
expense due to the existence of fully  reserved U.S.  Federal net operating loss
carry-forwards.

8.       EARNINGS PER SHARE

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

                                                            THREE MONTHS ENDED      NINE MONTHS ENDED
                                                            ------------------      -----------------
                                                          JANUARY 1,  JANUARY 2,  JANUARY 1,  JANUARY 2,
                                                             2006        2005        2006        2005
                                                             ----        ----        ----        ----
Numerator for basic and diluted earnings per share:
<S>                                                        <C>         <C>         <C>         <C>
  Net income                                               $ 1,413     $ 2,405     $11,998     $ 8,361
                                                           =======     =======     =======     =======

Denominators:
  Weighted-average common stock outstanding -
      denominator for basic EPS                             16,611      14,594      15,368      14,585

  Effect of dilutive employee stock options                    676         209         538         148
                                                           -------     -------     -------     -------

  Adjusted weighted-average common stock
     outstanding and assumed conversions -
     denominator for diluted EPS                            17,287      14,803      15,906      14,733
                                                           =======     =======     =======     =======
</TABLE>
                                      - 9 -
<PAGE>

During the third  quarter of fiscal 2006,  the Company  registered an additional
3,350,000  shares of its common  stock which were sold at $20.00 per share.  The
number of shares  offered by the Company was  3,000,000 and 350,000 were offered
by a selling shareholder. The Company did not receive any proceeds from the sale
of shares by the selling shareholder. This stock offering increased our weighted
average common stock outstanding by 1,615,000 and 533,000 shares for the quarter
and  nine-month  period ended  January 1, 2006,  respectively.  A portion of the
proceeds received by the Company were used to redeem $40,250 principal amount of
the Company's  outstanding Senior Secured 10% Notes. The balance of the proceeds
is available  for other  general  corporate  purposes to advance its strategy of
global  growth,   including   additional   debt   repayment,   investments   and
acquisitions.

9.       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 nine  months  ended  January 1, 2006 and
January 2, 2005, is as follows:

<TABLE>
<CAPTION>
                                                          NINE MONTHS ENDED JANUARY 1, 2006
                                                          ---------------------------------
                                                      PRODUCTS        SOLUTIONS         TOTAL
                                                      --------        ---------         -----
<S>                                                  <C>              <C>             <C>
 Sales to external customers......................   $ 362,405        $  46,506       $ 408,911
 Income from operations...........................      39,089            1,914          41,003
 Depreciation and amortization....................       5,893              916           6,809
 Total assets.....................................     470,108           30,200         500,308

                                                          NINE MONTHS ENDED JANUARY 2, 2005
                                                          ---------------------------------
                                                      PRODUCTS        SOLUTIONS         TOTAL
                                                      --------        ---------         -----
 Sales to external customers......................   $ 326,847        $  43,435       $ 370,282
 Income from operations...........................      29,195            1,313          30,508
 Depreciation and amortization....................       6,461              740           7,201
 Total assets.....................................     445,487           32,174         477,661
</TABLE>

                                     - 10 -

<PAGE>


10.      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 JANUARY 1, 2006
Current assets:
<S>                                                       <C>            <C>            <C>            <C>            <C>
 Cash and cash equivalents                                $  22,405      $    (272)     $  19,655      $       -      $  41,788
 Trade accounts receivable and unbilled revenues             53,931            237         39,298              -         93,466
 Inventories                                                 31,841         20,206         25,538         (2,507)        75,078
 Other current assets                                         3,599            867          9,417              -         13,883
                                                          ---------------------------------------------------------------------
  Total current assets                                      111,776         21,038         93,908         (2,507)       224,215
 Property, plant, and equipment, net                         23,741         11,776         17,681              -         53,198
 Goodwill and other intangibles, net                         89,996         57,285         39,288              -        186,569
 Intercompany                                                99,735        (99,688)       (74,198)        74,151              -
 Other assets                                                53,315        197,864         25,267       (240,120)        36,326
                                                          ---------------------------------------------------------------------
  Total assets                                            $ 378,563      $ 188,275      $ 101,946      $(168,476)     $ 500,308
                                                          =====================================================================


Current liabilities                                       $  43,908      $  16,105      $  33,572      $    (764)     $  92,821
 Long-term debt, less current portion                       210,750              -            539              -        211,289
 Other non-current liabilities                                7,285          8,168         29,277              -         44,730
                                                          ---------------------------------------------------------------------
  Total liabilities                                         261,943         24,273         63,388           (764)       348,840

Shareholders' equity                                        116,620        164,002         38,558       (167,712)       151,468
                                                          ---------------------------------------------------------------------
  Total liabilities and shareholders' equity              $ 378,563      $ 188,275      $ 101,946     $ (168,476)     $ 500,308
                                                          =====================================================================



FOR THE NINE MONTHS ENDED JANUARY 1, 2006
Net sales                                                 $ 195,700      $ 109,735      $ 121,098      $ (17,622)     $ 408,911
Cost of products sold                                       146,411         83,126         88,829        (16,087)       302,279
                                                          ---------------------------------------------------------------------
Gross profit                                                 49,289         26,609         32,269         (1,535)       106,632
                                                          ---------------------------------------------------------------------
Selling, general and administrative expenses                 29,767         11,710         23,648              -         65,125
Restructuring charges                                           236              -             84              -            320
Amortization of intangibles                                     132              2             50              -            184
                                                          ---------------------------------------------------------------------
                                                             30,135         11,712         23,782              -         65,629
                                                          ---------------------------------------------------------------------
Income (loss) from operations                                19,154         14,897          8,487         (1,535)        41,003
Interest and debt expense                                    15,867          3,537            213              -         19,617
Other (income) and expense, net                               7,549             24         (2,321)             -          5,252
                                                          ---------------------------------------------------------------------
(Loss) income before income tax expense                      (4,262)        11,336         10,595         (1,535)        16,134
Income tax expense                                              590          1,044          3,145              -          4,779
                                                          ---------------------------------------------------------------------
(Loss) income from continuing operations                     (4,852)        10,292          7,450         (1,535)        11,355
Income from discontinued operations                             643              -              -              -            643
                                                          ---------------------------------------------------------------------
Net (loss) income                                         $  (4,209)     $  10,292      $   7,450      $  (1,535)     $  11,998
                                                          =====================================================================


                                     - 11 -

<PAGE>


                                                            Parent      Guarantors    Nonguarantors  Eliminations  Consolidated
                                                          ---------------------------------------------------------------------
FOR THE NINE MONTHS ENDED JANUARY 1, 2006
OPERATING ACTIVITIES:
Net cash provided by operating activities                 $  16,996      $   9,296      $  12,217      $       -      $  38,509
                                                          ---------------------------------------------------------------------

INVESTING ACTIVITIES:
Sale of marketable securities, net                                -              -             90              -             90
Capital expenditures                                         (2,641)          (497)        (1,600)             -         (4,738)
Proceeds from sale of facilities and surplus real estate          -            468          1,623              -          2,091
                                                          ---------------------------------------------------------------------
Net cash (used in) provided by investing activities          (2,641)           (29)           113              -         (2,557)
                                                          ---------------------------------------------------------------------

FINANCING ACTIVITIES:
Proceeds from stock offering/options exercised               59,944              -              -              -         59,944
Net borrowings (payments) under revolving
     line-of-credit agreements                                  240              -         (1,657)             -         (1,417)
Repayment of debt                                          (196,706)             -           (175)             -       (196,881)
Proceeds from issuance of long-term debt                    136,000              -              -              -        136,000
Deferred financing costs incurred                            (2,357)             -              -              -         (2,357)
Dividends paid                                                9,067         (8,854)          (213)             -              -
Other                                                           446              -              -              -            446
                                                          ---------------------------------------------------------------------
Net cash provided by (used in) financing
     activities                                               6,634         (8,854)        (2,045)             -         (4,265)
EFFECT OF EXCHANGE RATE CHANGES ON CASH                        (230)            12            197              -            (21)
                                                          ---------------------------------------------------------------------
Cash provided by (used in) continuing operations             20,759            425         10,482              -         31,666
CASH PROVIDED BY DISCONTINUED OPERATIONS                        643              -              -              -            643
                                                          ---------------------------------------------------------------------
Net change in cash and cash equivalents                      21,402            425         10,482              -         32,309
Cash and cash equivalents at beginning of period              1,019           (697)         9,157              -          9,479
                                                          ---------------------------------------------------------------------
Cash and cash equivalents at end of period                $  22,421      $    (272)     $  19,639      $       -      $  41,788
                                                          =====================================================================




AS OF MARCH 31, 2005
Current assets:
 Cash and cash equivalents                                $   1,019      $    (697)     $   9,157      $       -      $   9,479
 Trade accounts receivable and unbilled revenues             57,707            197         39,918              -         97,822
 Inventories                                                 33,651         18,919         26,028           (972)        77,626
 Other current assets                                         7,297            973          5,928              -         14,198
                                                          ---------------------------------------------------------------------
  Total current assets                                       99,674         19,392         81,031           (972)       199,125
 Property, plant, and equipment, net                         25,107         12,847         19,283              -         57,237
 Goodwill and other intangibles, net                         90,027         57,287         39,971              -        187,285
 Intercompany                                                98,964       (102,189)       (70,216)        73,441              -
 Other assets                                                55,396        197,864         24,159       (240,195)        37,224
                                                          ---------------------------------------------------------------------
  Total assets                                            $ 369,168      $ 185,201      $  94,228      $(167,726)     $ 480,871
                                                          =====================================================================


Current liabilities                                       $  50,323      $  14,450      $  33,153      $  (1,474)     $  96,452
 Long-term debt, less current portion                       259,520              -            763              -        260,283
 Other non-current liabilities                                7,898          8,199         26,272              -         42,369
                                                          ---------------------------------------------------------------------
  Total liabilities                                         317,741         22,649         60,188         (1,474)       399,104

Shareholders' equity                                         51,427        162,552         34,040       (166,252)        81,767
                                                          ---------------------------------------------------------------------
  Total liabilities and shareholders' equity              $ 369,168      $ 185,201      $  94,228      $(167,726)  $    480,871
                                                          =====================================================================

                                     - 12 -

<PAGE>

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

FOR THE NINE MONTHS ENDED JANUARY 2, 2005
Net sales                                                 $ 177,905      $ 102,039      $ 108,385      $ (18,047)     $ 370,282
Cost of products sold                                       138,004         80,131         78,801        (18,047)       278,889
                                                          ---------------------------------------------------------------------
Gross profit                                                 39,901         21,908         29,584              -         91,393
                                                          ---------------------------------------------------------------------
Selling, general and administrative expenses                 24,594         14,310         21,342              -         60,246
Restructuring charges                                           357              -             51              -            408
Amortization of intangibles                                     178              2             51              -            231
                                                          ---------------------------------------------------------------------
                                                             25,129         14,312         21,444              -         60,885
                                                          ---------------------------------------------------------------------
Income from operations                                       14,772          7,596          8,140              -         30,508
Interest and debt expense                                    18,496          2,260            270              -         21,026
Other (income) and expense, net                              (1,469)           235           (110)             -         (1,344)
                                                          ---------------------------------------------------------------------
(Loss) income before income tax expense                      (2,255)         5,101          7,980              -         10,826
Income tax expense                                               38            665          2,190              -          2,893
                                                          ---------------------------------------------------------------------
(Loss) income from continuing operations                     (2,293)         4,436          5,790              -          7,933
Income from discontinued operations                             428              -              -              -            428
                                                          ---------------------------------------------------------------------
Net (loss) income                                         $  (1,865)     $   4,436      $   5,790      $       -      $   8,361
                                                          =====================================================================



FOR THE NINE MONTHS ENDED JANUARY 2, 2005
OPERATING ACTIVITIES:
Net cash (used in) provided by operating activities       $ (65,597)     $  68,173      $   5,837      $       -      $   8,413
                                                          ---------------------------------------------------------------------

INVESTING ACTIVITIES:
Sale of marketable securities, net                                -              -            957              -            957
Capital expenditures, net                                    (2,102)          (552)          (515)             -         (3,169)
Other                                                             -            375              -              -            375
                                                          ---------------------------------------------------------------------
Net cash (used in) provided by investing activities          (2,102)          (177)           442              -         (1,837)
                                                          ---------------------------------------------------------------------

FINANCING ACTIVITIES:
Net borrowings (payments) under revolving
     line-of-credit agreements                                5,022              -         (2,116)             -          2,906
Repayment of debt                                           (13,062)             -           (182)             -        (13,244)
Deferred financing costs incurred                               (24)             -              -              -            (24)
Dividends paid                                               68,168        (68,000)          (168)             -              -
Other                                                           427              -              -              -            427
                                                          ---------------------------------------------------------------------
Net cash provided by (used in) financing activities          60,531        (68,000)        (2,466)             -         (9,935)
EFFECT OF EXCHANGE RATE CHANGES ON CASH                        (120)            85            489              -            454
                                                          ---------------------------------------------------------------------
Cash (used in) provided by continuing operations             (7,288)            81          4,302              -         (2,905)
CASH PROVIDED BY DISCONTINUED OPERATIONS                        428              -              -              -            428
                                                          ---------------------------------------------------------------------
Net change in cash and cash equivalents                      (6,860)            81          4,302              -         (2,477)
Cash and cash equivalents at beginning of period              6,981           (329)         4,449              -         11,101
                                                          ---------------------------------------------------------------------
Cash and cash equivalents at end of period                $     121      $    (248)     $   8,751      $       -      $   8,624
                                                          =====================================================================
</TABLE>


                                     - 13 -


<PAGE>


11.      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
$5,450 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 $5,450
to $6,300 as of January 1, 2006.  The range of probable and estimable  liability
reflects  uncertainty  in the number of future claims that will be filed and the
cost to resolve  those  claims,  which may be influenced by a number of factors,
including  the  outcome  of the  ongoing  broad-based  settlement  negotiations,
defensive  strategies,  and the cost to resolve claims  outside the  broad-based
settlement program. Based on the underlying actuarial  information,  the Company
has reflected $5,700 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.


12.      NEW ACCOUNTING STANDARDS

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  becomes  effective for inventory  costs incurred  during fiscal years
beginning  after June 15, 2005. The Company does not expect the adoption of SFAS
No.  151 to have a  material  impact  on the  Company's  consolidated  financial
statements.

In December 2004, the Financial  Accounting  Standards  Board (FASB) issued FASB
Statement No. 123 (revised 2004),  SHARE-BASED  PAYMENT,  which is a revision of
FASB  Statement No. 123,  ACCOUNTING  FOR  STOCK-BASED  COMPENSATION.  Statement
123(R)  supersedes APB Opinion No. 25, ACCOUNTING FOR STOCK ISSUED TO EMPLOYEEs,
and amends  FASB  Statement  No. 95,  STATEMENT  OF CASH FLOWS.  Generally,  the
approach in Statement  123(R) is similar to the approach  described in Statement
123. However,  Statement 123(R) requires all share-based  payments to employees,
including  grants of employee  stock  options,  to be  recognized  in the income
statement  based on their  fair  values.  Pro forma  disclosure  is no longer an
alternative.

Statement 123(R) was to be adopted for interim or annual periods beginning after
June 15, 2005. On April 14th,  2005, the SEC announced that it would provide for
a phased-in  implementation  process for FASB statement No.  123(R).  The SEC is
requiring  that  registrants  adopt  statement  123(R)'s  fair  value  method of
accounting for share-based  payments to employees no later than the beginning of
the first fiscal year  beginning  after June 15, 2005. We expect to adopt 123(R)
in the first quarter of Fiscal 2007.  Statement  123(R) permits public companies
to adopt its requirements using one of two methods:

                                     - 14 -

<PAGE>

     1.   A  "modified   prospective"  method  in  which  compensation  cost  is
          recognized  beginning  with  the  effective  date  (a)  based  on  the
          requirements of Statement 123(R) for all share-based  payments granted
          after  the  effective  date  and  (b)  based  on the  requirements  of
          Statement  123(R) for all  share-based  payments  granted to employees
          prior to the effective date of Statement  123(R) that remain  unvested
          on the effective date.

     2.   A "modified  retrospective"  method which includes the requirements of
          the modified  prospective  method  described  above,  but also permits
          entities  to restate  based on  amounts  previously  recognized  under
          Statement  123 for  purposes of pro forma  disclosures  either (a) all
          prior periods  presented or (b) prior  interim  periods of the year of
          adoption.

The  Company  is still  evaluating  the  method  it plans to use when it  adopts
statement 123(R).

As permitted by Statement 123, the Company  currently  accounts for  share-based
payments to employees  using Opinion 25's  intrinsic  value method and, as such,
recognizes  no  compensation  cost  for  employee  stock  options.  Accordingly,
adoption  of  Statement  123(R)'s  fair value  method will have an impact on our
results of operations,  although it will have no impact on our overall financial
position.  The impact of adoption  of 123(R)  cannot be  predicted  at this time
because it will depend on levels of share based payments  granted in the future.
However,  had we adopted  Statement 123(R) in prior periods,  the impact of that
standard would have approximated the impact of statement 123 as described in the
disclosure  of pro  forma net  income  and  earnings  per share in Note 2 to our
condensed 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  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 130-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.
International sales increased 13% from approximately  $97,000 to $110,000 during
the first nine months of fiscal 2006 and overall  sales  increased  10% over the
same period last year.  Management  believes that the growth rate of total sales
may moderate in future periods due to more difficult comparisons with our fiscal
2005 periods. In addition,  bookings have tapered to the mid-single digit growth
range. We monitor such indicators as U.S. Industrial Capacity Utilization, which
had been  increasing  since July 2003 but have more recently begun to stabilize.
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.  We have
been undergoing  assessments for possible divestiture of several  less-strategic
businesses.  Our manipulator and specialty  marine chain businesses were sold in
fiscal  2004 and two  others  remain as  possible  divestiture  candidates,  our
conveyor  business  which  comprises a majority of our  Solutions  segment and a
specialty  crane  business  within our Products  segment.  In furtherance of our
facility  rationalization  projects,  we  completed  the sale of several  excess
properties  at a gain of $3,700 and $556  during  fiscal 2005 and the first nine
months of fiscal  2006,  respectively.  We will  continue to sell  surplus  real
estate resulting from our facility  rationalization projects and those sales may
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 $33,000 in fiscal 2005 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 $30,000 to $35,000
of steel annually in a variety of forms including rod, wire, bar, structural and
others.  Increases  in our costs  have been  reflected  as price  increases  and
surcharges  to our  customers  and we  continue  to monitor  them.  The costs of
implementing  Sarbanes-Oxley internal control documentation and compliance had a
substantial impact on fiscal 2005 profitability and we are focused on minimizing
the  future  added  costs of  compliance.  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.  Based on current trends,  we
look forward to slowed growth over the remainder of fiscal 2006.

RESULTS OF OPERATIONS

THREE MONTHS AND NINE MONTHS ENDED JANUARY 1, 2006 AND JANUARY 2, 2005
Net sales in the fiscal 2006 quarter  ended  January 1, 2006 were  $133,322,  up
$7,409 or 5.9% from the fiscal 2005 quarter ended January 2, 2005. Net sales for
the nine months ended January 1, 2006 were  $408,911,  an increase of $38,629 or
10.4% from the nine months ended January 2, 2005.  Sales in the Products segment
increased  by $8,541 or 7.8% from the  previous  year's  quarter  and $35,558 or
10.9% from the previous year's nine-month period then ended. These increases are
due to the continued strength of the U.S. and European  industrial  markets,  as
well as the impact of price  increases  of $3,300 and $16,000 in the quarter and
nine  months  ended  January  1,  2006,  respectively.  Translation  of  foreign
currencies, particularly the Euro and Canadian dollar, into U.S. dollars reduced
sales in the Products  segment by $1,100 for the quarter  ended  January 1, 2006
and  contributed  $900  toward the  Products  segment  increase in sales for the
nine-month  period  ended  January  1,  2006.  Sales  in the  Solutions  segment
decreased  6.8% or $1,132 for the quarter and  increased  7.1% or $3,071 for the
nine months ended  January 1, 2006 when compared to the same period in the prior
year.  The  decrease  in this  segment  for  quarter  ended  January  1, 2006 is
primarily due to the translation of foreign  currencies into U.S.  dollars which
reduced sales by $900.  The increase in this segment for the  nine-month  period
ended January 1, 2006 is primarily due to improvement  in our European  conveyor
business.  Translation of foreign  currencies into U.S. dollars reduced sales in
the Solutions  segment by $100 for the nine-months  ended January 1, 2006. Sales
in the segments are summarized as follows:

<TABLE>
<CAPTION>
                                 THREE MONTHS ENDED                               NINE MONTHS ENDED
                                 ------------------                               -----------------
                       JAN. 1,      JAN. 2,           CHANGE            JAN. 1,       JAN. 2,          CHANGE
                        2006         2005       AMOUNT       %           2006          2005        AMOUNT     %
                    ----------   ----------    --------    -----     ----------    ---------    ---------   ----
<S>                 <C>          <C>           <C>          <C>      <C>           <C>          <C>         <C>
Products            $  117,850   $  109,309    $  8,541     7.8      $  362,405    $ 326,847    $  35,558   10.9
Solutions               15,472       16,604      (1,132)   (6.8)         46,506       43,435        3,071    7.1
                    ----------   ----------    --------              ----------    ---------    ---------
Net sales           $  133,322   $  125,913    $  7,409     5.9      $  408,911    $ 370,282    $  38,629   10.4
                    ==========   ==========    ========              ==========    =========    =========
</TABLE>

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

                                      THREE MONTHS ENDED                            NINE MONTHS ENDED
                                      ------------------                            -----------------
                                JAN. 1, 2006        JAN. 2, 2005            JAN. 1, 2006          JAN. 2, 2005
                                ------------        ------------            ------------          ------------
                                  $       %           $       %               $       %             $       %
                                -----   -----       -----   -----           -----   -----         -----   -----
<S>                          <C>         <C>     <C>         <C>         <C>         <C>       <C>         <C>
Products                     $  32,142   27.3    $  27,533   25.2        $  99,027   27.3      $  84,583   25.9
Solutions                        2,789   18.0        2,466   14.9            7,605   16.4          6,810   15.7
                             ---------           ---------               ---------             ---------
Total Gross Profit           $  34,931   26.2    $  29,999   23.8        $ 106,632   26.1      $  91,393   24.7
                             =========           =========               =========             =========
</TABLE>

The increase in the gross profit  margin for the Products  segment is the result
of product mix,  the  realization  of  operational  leverage at increased  sales
volumes and previous cost containment  activities.  The Solutions  segment gross
profit margin was impacted by product mix.

                                     - 17 -
<PAGE>

Selling expenses were $13,281,  $13,356, $40,019, and $38,326 in the fiscal 2006
and 2005  quarters  and the  nine-month  periods then ended,  respectively.  The
changes in expense dollars were impacted by increased  investment in new markets
($200 and $925 for the  quarter and  nine-month  period  ended  January 1, 2006,
respectively), translation from changes in foreign exchange rates ($225 decrease
in selling  expense for the quarter ended January 1, 2006,  and $50 increase for
the  nine-month  period ended  January 1, 2006) and increased  variable  selling
costs as a result of higher sales volume.  As a percentage of  consolidated  net
sales,  selling expenses were 10.0%,  10.6%,  9.8%, and 10.4% in the fiscal 2006
and 2005 quarters and the nine-month periods then ended, respectively.

General and administrative expenses were $8,392, $6,918, $25,106, and $21,920 in
the  fiscal  2006 and 2005  quarters  and the  nine-month  periods  then  ended,
respectively.  The  quarterly  increase  is  primarily  the result of  increased
variable  compensation  expense ($900),  increased  salaries and fringe benefits
($150), increased bad debt reserves ($200), increased Employee Stock Option Plan
expense  ($125),  increased  support costs for our Mexican chain business ($75),
and increased board of directors  expense ($75). The fiscal 2006 nine-month data
is higher than the prior year due to  increased  variable  compensation  expense
($700),  increased  salaries  and fringe  benefits  ($600),  increased  bad debt
reserves  ($450),  severance  expenses ($300),  increased  support costs for our
foreign  operations  ($200),  and  currency  translation  impact  ($100).  As  a
percentage of consolidated net sales,  general and administrative  expenses were
6.3%,  5.5%,  6.1%  and  5.9% in the  fiscal  2006  and  2005  quarters  and the
nine-month periods then ended, respectively.

Restructuring charges were $83, $191, $320, and $408 in the fiscal 2006 and 2005
quarters and the nine-month periods then ended, respectively.

Amortization  of intangibles was $61, $78, $184, and $231 in the fiscal 2006 and
2005 quarters and the nine-month periods then ended, respectively.

Interest and debt expense was $6,268, $6,837, $19,617, and $21,026 in the fiscal
2006 and 2005  quarters and the  nine-month  periods  then ended,  respectively.
These  decreases  are the  result  of lower  debt  levels.  As a  percentage  of
consolidated net sales,  interest and debt expense was 4.7%, 5.4%, 4.8% and 5.7%
in the fiscal 2006 and 2005  quarters  and the  nine-month  periods  then ended,
respectively.

Other (income) and expense, net was $4,177,  $(755),  $5,252 and $(1,344) in the
fiscal  2006  and  2005  quarters  and  the   nine-month   periods  then  ended,
respectively.  The 2006 quarter expense consisted  primarily of a $4,950 loss on
early  extinguishment  of debt,  offset by $350 of realized gains and investment
income on investments within our captive insurance company portfolio and $375 of
interest income.  The fiscal 2006 nine month expense  consisted  primarily of an
$8,300 loss on early  extinguishment of debt, offset by $1,650 of realized gains
and  investment  income on  investments  within our  captive  insurance  company
portfolio,  $500 of gains on sales of real estate,  and $750 of interest income.
The fiscal  2005 income for both the quarter  and  nine-month  period  consisted
primarily of realized  gains and  investment  income on  investments  within our
captive insurance portfolio and of interest income.

Income tax expense as a percentage of income from continuing  operations  before
income tax expense  was 55.1%,  35.1%,  29.6%,  and 26.7% in the fiscal 2006 and
2005 quarters and the nine-month  periods then ended,  respectively.  The fiscal
2006  and  2005  percentages  vary  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 results
from non-U.S.  taxable income and state taxes on U.S. taxable income. The higher
effective   income  tax  rate  in  fiscal  2006   reflects  the  loss  on  early
extinguishment of debt which reduced U.S. taxable income by $4,950 and $8,280 in
the  quarter  and nine  month  period  respectively,  but did not affect our tax
expense due to the existence of fully  reserved U.S.  Federal net operating loss
carry-forwards.  We  evaluate  our  estimated  annual  effective  tax rate  each
quarter.  In light of the our continuing  improvement in the results of our U.S.
operations  during  fiscal  2005 and  2006,  we plan to  review  the  previously
established valuation reserves for our net deferred tax assets in more detail as
information becomes available.

LIQUIDITY AND CAPITAL RESOURCES

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

                                     - 18 -
<PAGE>

by a selling shareholder. The Company did not receive any proceeds from the sale
of shares by the selling shareholder. This stock offering increased our weighted
average common stock outstanding by 1,615,000 and 533,000 shares for the quarter
and  nine-month  period ended  January 1, 2006,  respectively.  A portion of the
proceeds received by the Company were used to redeem $40,250 principal amount of
the Company's  outstanding Senior Secured 10% Notes. The balance of the proceeds
is available  for other  general  corporate  purposes to advance its strategy of
global  growth,   including   additional   debt   repayment,   investments   and
acquisitions.

The Company's Revolving Credit Facility provides availability up to a maximum of
$65,000.  Underlying  collateral  at January 1, 2006  amounted to  $65,000.  The
unused  portion  totaled  $54,800,  net  of  outstanding  borrowings  of $0  and
outstanding  letters  of credit of  $10,200.  Interest  is  payable  at  varying
Eurodollar rates based on LIBOR or prime plus spreads determined by our leverage
ratio,  amounting to 150 or 25 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.

During the second quarter of fiscal 2006, the Company issued  $136,000 of 8 7/8%
Senior Subordinated Notes (8 7/8% Notes) 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.  The 8
7/8% Notes are redeemable at the option of the Company,  in whole or in part, at
prices  declining  annually from the Make-Whole  Price (as defined in the 8 7/8%
Notes agreement) 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.

Proceeds from the 8 7/8% Notes and cash on hand were used to  repurchase  all of
the outstanding 8 1/2% Senior  Subordinated  Notes. The repurchase of the 8 1/2%
Notes occurred at a premium resulting in a pre-tax loss on early  extinguishment
of debt of $2,298.  As a result of the  repurchase of the 8 1/2% Notes,  $922 of
pre-tax  deferred  financing  costs and $110 of the original issue discount were
written-off in the second quarter of fiscal 2006. The net effect of these items,
a $3,330 pre-tax loss, is shown as part of other (income) and expense, net.

The Senior  Secured 10% Notes  issued on July 22, 2003  amounted to $115,000 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.  During the third quarter of
fiscal 2006,  the Company used a portion of the proceeds from its stock offering
to repurchase  $40,250 of the outstanding  10% Notes.  The repurchase of the 10%
Notes occurred at a premium resulting in a pre-tax loss on early  extinguishment
of debt of  $4,025.  As a result of the  repurchase  of the 10%  Notes,  $925 of
pre-tax deferred financing costs was written-off. The net effect of these items,
a $4,950  pre-tax loss in the third  quarter of fiscal 2006, is shown as part of
other  (income) and expense,  net. 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.

The  corresponding  credit  agreements  associated  with  the  Revolving  Credit
Facility  place  certain debt  covenant  restrictions  on us  including  certain
financial requirements and a restriction on dividend payments.

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 is  focused  on cash  generation  for debt  repayment.  The
business plan includes continued implementation of Lean Manufacturing,  facility
rationalization   projects,   divestiture  of  excess   facilities  and  certain
non-strategic operations,  improving working capital utilization, and new market
and new product development.

                                     - 19 -
<PAGE>

Net cash provided by operating  activities was $38,509 for the nine months ended
January 1, 2006  compared to $8,413 for the nine months  ended  January 2, 2005.
The  $30,096  increase  is the  result  of a  $3,422  increase  in  income  from
continuing  operations,  an $8,280  loss on early  extinguishment  of debt,  and
$20,632  of changes  in net  working  capital  components,  primarily  decreased
accounts receivable and inventories,  and increased accounts payable and accrued
liabilities,  offset  by  $1,794  of  gains  on the  sale  of  real  estate  and
investments.

Net cash used in  investing  activities  was  $2,557 for the nine  months  ended
January 1, 2006  compared to $1,837 for the nine months  ended  January 2, 2005.
The $720  increase  in cash  used  was the  result  of an  increase  in  capital
expenditures  to $4,738 in fiscal 2006 compared to $3,169 in fiscal 2005, and by
a  decrease  in sales of  marketable  equity  securities  to $90 in fiscal  2006
compared  to $957 in  fiscal  2005.  This  increase  in cash  used in  investing
activities  was offset by $2,091 of  proceeds  from sale of  property  in fiscal
2006.

Net cash used in  financing  activities  was  $4,265 for the nine  months  ended
January 1, 2006  compared to $9,935 for the nine months  ended  January 2, 2005.
The net cash used in financing  activities  for the nine months ended January 1,
2006  consisted  primarily  of $196,881  repayment  of debt,  $2,357 of deferred
financing  costs  incurred,  and $1,417 of net payments under  revolving line of
credit agreements, offset by $136,000 of proceeds from the issuance of long-term
debt and $59,944 of proceeds from the issuance of common stock and stock options
exercised.  The net cash used in financing  activities for the nine months ended
January 2, 2005  consisted  primarily of $13,244  repayment  of debt,  offset by
$2,906 net borrowings under revolving line of credit agreements.

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 nine months  ended
January 1, 2006 and  January 2, 2005 were $4,738 and  $3,169,  respectively.  We
expect capital  spending for fiscal 2006 to in the range of $6.0 to $7.0 million
compared  with $5.2  million in fiscal 2005.  Higher  capital  expenditures  for
fiscal 2006 have been  primarily  directed  toward new product  development  and
productivity improvement.

INFLATION AND OTHER MARKET CONDITIONS

Our costs are affected by inflation in the U.S. economy and, to a lesser extent,
in foreign economies including those of Europe,  Canada, Mexico, and the Pacific
Rim. We do not  believe  that  general  inflation  has had a material  effect on
results of operations  over the periods  presented  primarily due to overall low
inflation  levels 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, 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.  In the future,
we may be further  affected by  inflation  that we may not be able to pass on as
price increases.

SEASONALITY AND QUARTERLY RESULTS

Quarterly  results may be  materially  affected by the timing of large  customer
orders,  periods of high  vacation  and  holiday  concentrations,  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.

                                     - 20 -
<PAGE>

EFFECTS OF NEW ACCOUNTING PRONOUNCEMENTS

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 becomes effective for inventory costs incurred during
fiscal years  beginning  after June 15,  2005.  We do not expect the adoption of
SFAS No. 151 to have a material impact on our consolidated financial statements.

In December 2004, the Financial  Accounting  Standards  Board (FASB) issued FASB
Statement No. 123 (revised 2004),  SHARE-BASED  PAYMENT,  which is a revision of
FASB  Statement No. 123,  ACCOUNTING  FOR  STOCK-BASED  COMPENSATION.  Statement
123(R)  supersedes APB Opinion No. 25, ACCOUNTING FOR STOCK ISSUED TO EMPLOYEEs,
and amends  FASB  Statement  No. 95,  STATEMENT  OF CASH FLOWS.  Generally,  the
approach in Statement  123(R) is similar to the approach  described in Statement
123. However,  Statement 123(R) requires all share-based  payments to employees,
including  grants of employee  stock  options,  to be  recognized  in the income
statement  based on their  fair  values.  Pro forma  disclosure  is no longer an
alternative.

Statement 123(R) was to be adopted for interim or annual periods beginning after
June 15, 2005. On April 14th,  2005, the SEC announced that it would provide for
a phased-in  implementation  process for FASB statement No.  123(R).  The SEC is
requiring  that  registrants  adopt  statement  123(R)'s  fair  value  method of
accounting for share-based  payments to employees no later than the beginning of
the first fiscal year  beginning  after June 15, 2005. We expect to adopt 123(R)
in the first quarter of Fiscal 2007.  Statement  123(R) permits public companies
to adopt its requirements using one of two methods:

     1.   A  "modified   prospective"  method  in  which  compensation  cost  is
          recognized  beginning  with  the  effective  date  (a)  based  on  the
          requirements of Statement 123(R) for all share-based  payments granted
          after  the  effective  date  and  (b)  based  on the  requirements  of
          Statement  123(R) for all  share-based  payments  granted to employees
          prior to the effective date of Statement  123(R) that remain  unvested
          on the effective date.

     2.   A "modified  retrospective"  method which includes the requirements of
          the modified  prospective  method  described  above,  but also permits
          entities  to restate  based on  amounts  previously  recognized  under
          Statement  123 for  purposes of pro forma  disclosures  either (a) all
          prior periods  presented or (b) prior  interim  periods of the year of
          adoption.

We are  still  evaluating  the  method  we plans to use when we adopt  statement
123(R).

As permitted by Statement 123, we currently account for share-based  payments to
employees using Opinion 25's intrinsic  value method and, as such,  recognize no
compensation cost for employee stock options. Accordingly, adoption of Statement
123(R)'s  fair value  method will have an impact on our  results of  operations,
although it will have no impact on our overall financial position. The impact of
adoption of 123(R)  cannot be  predicted  at this time because it will depend on
levels of share based payments  granted in the future.  However,  had we adopted
Statement  123(R) in prior  periods,  the  impact of that  standard  would  have
approximated  the impact of statement 123 as described in the  disclosure of pro
forma net income and earnings per share in Note 2 to our condensed  consolidated
financial statements.

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
declines 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.

                                     - 21 -
<PAGE>

Item 3.     Quantitative and Qualitative Disclosures About Market Risk


There have been no material  changes in the market risks since the end of Fiscal
2005.


Item 4.     Disclosure Controls and Procedures

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


                                     - 22 -

<PAGE>

PART II.  OTHER INFORMATION

Item 1.   Legal Proceedings - none.

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 and Reports on Form 8-K

    (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.

    (b)   Reports on Form 8-K:

          On November 8, 2005,  the Company  filed a Current  Report on Form 8-K
          with respect to the pricing of its  previously  announced  offering of
          3,350,000 shares of common stock at $20.00 per share.

          On November 15, 2005,  the Company filed a Current  Report on Form 8-K
          with respect to the completion of its previously disclosed offering of
          3,350,000 shares of common stock at $20.00 per share.

          On November 18, 2005,  the Company filed a Current  Report on Form 8-K
          with  respect  to the  call for  redemption  of  approximately  $40.25
          million of its outstanding Senior Subordinated 10% Notes due 2010.

          On January 24, 2006,  the Company  filed a Current  Report on Form 8-K
          with respect to its financial  results for the third quarter of fiscal
          2006.

          On January 26, 2006,  the Company  filed a Current  Report on Form 8-K
          with respect to the appointment of its Chief Financial Officer.



                                     - 23 -

<PAGE>


                                   SIGNATURES


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


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




Date: FEBRUARY 1, 2006                    /S/ KAREN L. HOWARD
      ----------------                    --------------------------------------
                                          Karen L. Howard
                                          Vice President and Treasurer and Chief
                                             Financial Officer (Principal
                                             Financial Officer)

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