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 September 27, 1998 

                                       or

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

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

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

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

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

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

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


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


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

The number of shares of common  stock  outstanding  as of October  30, 1998 was:
13,768,358 shares.


<PAGE>

                                 FORM 10-Q INDEX
                          COLUMBUS MCKINNON CORPORATION
                               SEPTEMBER 27, 1998


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

Item 1.  Condensed Consolidated Financial Statements (Unaudited)

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

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

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

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

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

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


PART II.  OTHER INFORMATION

Item 1.    Legal Proceedings                                                 17

Item 2.    Changes in Securities - none.                                     17

Item 3.    Defaults upon Senior Securities - none.                           17

Item 4.    Submission of Matters to a Vote of Security Holders               17

Item 5.    Other Information - none.                                         17

Item 6.    Exhibits and Reports on Form 8-K                                  17


                                     - 1 -
<PAGE>

PART I.     FINANCIAL INFORMATION

Item 1.     Condensed Consolidated Financial Statements (Unaudited)

<TABLE>
<CAPTION>

                          COLUMBUS MCKINNON CORPORATION
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                   (UNAUDITED)

                                                       SEPTEMBER 27,   MARCH 31,
                                                           1998          1998
                                                         --------      --------
                                                             (IN THOUSANDS)
<S>                                                    <C>             <C>
ASSETS:
Current assets:
  Cash and cash equivalents                                $ 17,132    $ 22,841
  Trade accounts receivable                                 131,233     113,509
  Unbilled revenues                                          16,659      19,634
  Inventories                                               103,885     107,673
  Net assets held for sale                                    8,993      10,396
  Prepaid expenses                                            6,711       9,969
                                                           --------    --------
Total current assets                                        284,613     284,022
Net property, plant, and equipment                           80,747      81,927
Goodwill and other intangibles, net                         355,977     368,137
Marketable securities                                        15,980      16,665
Deferred taxes on income                                      6,859       7,534
Other assets                                                  8,697       5,463
                                                           --------    --------
Total assets                                               $752,873    $763,748
                                                           ========    ========

LIABILITIES AND SHAREHOLDERS' EQUITY:
Current liabilities:
  Notes payable to banks                                   $  2,660    $  2,801
  Trade accounts payable                                     39,381      53,901
  Excess billings                                             4,853       3,290
  Accrued liabilities                                        45,987      43,065
  Current portion of long-term debt                           1,425       1,456
                                                           --------    --------
Total current liabilities                                    94,306     104,513
Senior debt, less current portion                           244,270     247,388
Subordinated debt                                           199,468     199,468
Other non-current liabilities                                37,843      45,857
                                                           --------    --------
Total liabilities                                           575,887     597,226
Shareholders' equity:
  Common stock                                                  137         137
  Additional paid-in capital                                 97,248      96,544
  Retained earnings                                          85,473      76,187
  ESOP debt guarantee                                        (2,767)     (3,203)
  Unearned restricted stock                                    (394)       (538)
  Total accumulated other comprehensive income (loss)        (2,711)     (2,605)
                                                           --------    --------
Total shareholders' equity                                  176,986     166,522
                                                           --------    --------
Total liabilities and shareholders' equity                 $752,873    $763,748
                                                           ========    ========
</TABLE>

See accompanying notes to condensed consolidated financial statements.

                                     - 2 -
<PAGE>
<TABLE>
<CAPTION>

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





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



<S>                                             <C>              <C>               <C>                <C>     
Net sales                                            $168,634         $123,907          $339,138           $248,349
Cost of products sold                                 126,234           88,071           253,283            177,310
                                                      -------          -------           -------            -------
Gross profit                                           42,400           35,836            85,855             71,039
                                                      -------          -------           -------            -------

Selling expenses                                       12,461           10,628            24,941             21,793
General and administrative expenses                     7,213            5,993            14,109             12,336
Amortization of intangibles                             3,847            2,545             7,607              5,094
                                                      -------          -------           -------            -------
                                                       23,521           19,166            46,657             39,223
                                                      -------          -------           -------            -------

Income from operations                                 18,879           16,670            39,198             31,816
Interest and debt expense                               8,978            5,910            17,596             12,435
Interest and other income                                 262              328               633                644
                                                      -------          -------           -------            -------
Income before income taxes                             10,163           11,088            22,235             20,025
Income tax expense                                      5,078            5,458            11,066              9,964
                                                      -------          -------           -------            -------
Net income                                              5,085            5,630            11,169             10,061
Retained earnings - beginning of period                81,330           64,497            76,187             60,999
Cash dividends of $0.07, $0.07, $0.14 and
   $0.14 per share                                       (942)            (933)           (1,883)            (1,866)
                                                      -------          -------           -------            -------
Retained earnings - end of period                     $85,473          $69,194           $85,473            $69,194
                                                      =======          =======           =======            =======

Earnings per share data, both basic and diluted:        $0.38            $0.42             $0.83              $0.75
                                                        =====            =====             =====              =====
</TABLE>

See accompanying notes to condensed consolidated financial statements.

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


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

                                                                                       SIX MONTHS ENDED
                                                                                       ----------------
                                                                             SEPTEMBER 27,      SEPTEMBER 28,
                                                                                  1998               1997
                                                                                  ----               ----
                                                                                         (IN THOUSANDS)
<S>                                                                          <C>                <C>     
OPERATING ACTIVITIES:
Net income                                                                       $  11,169           $ 10,061
Adjustments to reconcile net income to net cash
 provided by operating activities:
  Depreciation and amortization                                                     13,231              9,539
  Other                                                                              1,166                347
  Changes in operating assets and liabilities net
   of effects from businesses purchased and sold:
    Trade accounts receivable                                                      (18,940)            (4,906)
    Unbilled revenues and excess billings                                            4,538                -
    Inventories                                                                      1,656                210
    Prepaid expenses                                                                   (67)               769
    Other assets                                                                      (367)              (284)
    Trade accounts payable                                                         (14,231)            (4,900)
    Accrued and non-current liabilities                                              4,072              5,132
                                                                                 ---------           --------
Net cash provided by operating activities                                            2,227             15,968
                                                                                 ---------           --------

INVESTING ACTIVITIES:
Purchase of marketable securities, net of sales                                        438             (1,687)
Capital expenditures                                                                (5,363)            (3,280)
Proceeds from sale of businesses                                                     9,301                -
Purchases of businesses, net of cash                                                (7,323)               -
Net assets held for sale                                                             1,403               (324)
Other                                                                                  -                 (148)
                                                                                 ---------           ---------
Net cash used in investing activities                                               (1,544)            (5,439)
                                                                                 ----------          ---------

FINANCING ACTIVITIES:
Net payments under revolving line-of-credit agreements                              (2,741)            (1,526)
Repayment of debt                                                                     (549)            (7,093)
Dividends paid                                                                      (1,883)            (1,866)
Reduction of ESOP debt guarantee                                                       436                407
Other                                                                                 (891)              (558)
                                                                                 ----------          ---------
Net cash used in financing activities                                               (5,628)           (10,636)
Effect of exchange rate changes on cash                                               (764)              (730)
                                                                                 ----------          ---------
Net change in cash and cash equivalents                                             (5,709)              (837)
Cash and cash equivalents at beginning of period                                    22,841              8,907
                                                                                 ---------           --------
Cash and cash equivalents at end of period                                       $  17,132           $  8,070
                                                                                 =========           ========
</TABLE>

See accompanying notes to condensed consolidated financial statements.

                                     - 4 -

<PAGE>
<TABLE>
<CAPTION>


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

                                                      THREE MONTHS ENDED                  SIX MONTHS ENDED
                                                      ------------------                  ----------------
                                                SEPTEMBER 27,      SEPTEMBER 28,   SEPTEMBER 27,     SEPTEMBER 28,
                                                    1998               1997            1998              1997
                                                    ----               ----            ----              ----
                                                                           (IN THOUSANDS)

<S>                                             <C>                <C>             <C>               <C>       
Net income                                         $    5,085         $    5,630      $   11,169        $   10,061
                                                   ----------         ----------      ----------        ----------
Other comprehensive income (loss), net of tax:
  Foreign currency translation adjustments                360               (219)            143              (957)
  Unrealized gains on investments:
    Unrealized holding gains arising during
      the period                                         (268)               304            (221)              801
    Less:  reclassification adjustment for gains
      included in net income                               48               (158)            (28)             (247)
                                                   ----------         ----------      ----------        ----------
                                                         (220)               146            (249)              554
                                                   ----------         ----------      ----------        ----------
Total other comprehensive income (loss)                   140                (73)           (106)             (403)
                                                   ----------         ----------      ----------        ----------
Comprehensive income                               $    5,225         $    5,557      $   11,063        $    9,658
                                                   ==========         ==========      ==========        ==========

</TABLE>

See accompanying notes to condensed consolidated financial statements.

                                     - 5 -

<PAGE>



                          COLUMBUS MCKINNON CORPORATION
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)
                               SEPTEMBER 27, 1998


1.   The accompanying unaudited condensed consolidated financial statements have
     been prepared in accordance with generally accepted  accounting  principles
     for  interim  financial  information.  In the  opinion of  management,  all
     adjustments  (consisting of normal recurring accruals) considered necessary
     for a fair  presentation  of the  financial  position  of  the  Company  at
     September 27, 1998,  and the results of its  operations  and its cash flows
     for the three and six month periods ended  September 27, 1998 and September
     28, 1997,  have been included.  Results for the period ended  September 27,
     1998 are not necessarily indicative of the results that may be expected for
     the year  ended  March 31,  1999.  For  further  information,  refer to the
     consolidated  financial  statements and footnotes  thereto  included in the
     Columbus McKinnon Corporation annual report on Form 10-K for the year ended
     March 31, 1998.


2.   Inventories consisted of the following:

                                          SEPTEMBER 27,         MARCH 31,
                                              1998                1998
                                          -------------------------------
                                                   (IN THOUSANDS)
     At cost - FIFO basis:
        Raw materials                      $    47,835        $    52,158
        Work-in-process                         17,401             22,188
        Finished goods                          42,399             37,089
                                           -----------        -----------
                                               107,635            111,435
     LIFO cost less than FIFO cost              (3,750)            (3,762)
                                           -----------        -----------
                                           $   103,885        $   107,673
                                           ===========        ===========

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


3.   Property,  plant,  and equipment is net of $35,722,000  and  $30,876,000 of
     accumulated  depreciation  at  September  27,  1998  and  March  31,  1998,
     respectively.

4.   Goodwill and other intangibles, net includes $21,993,000 and $14,979,000 of
     accumulated  amortization  at  September  27,  1998  and  March  31,  1998,
     respectively.

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

                                     - 6 -
<PAGE>

     Yale was  self-insured  for  product  liability  claims up to a maximum  of
     $500,000 per occurrence and maintained  product liability  insurance with a
     $100 million cap per  occurrence  through July 31, 1997 when Yale was added
     to the Company's  coverage as described above. The Company has been advised
     that a customer has alleged that one of Yale's  products was the cause of a
     fire that occurred in January 1995 at a manufacturing  facility,  resulting
     in losses in excess of Yale's policy  limits.  A formal  complaint has been
     filed seeking damages in excess of $500 million. However, it is the opinion
     of  management  that there was no  manufacturing  defect and that the claim
     will in all likelihood be settled within the Company's policy limits.

6.   To manage its  exposure  to  interest  rate  fluctuations,  the Company has
     interest rate swaps with a notional value of $22 million through January 2,
     1999 and $3.5 million from January 2, 1999 through July 2, 2002, both based
     on LIBOR at 5.9025%. The Company also has LIBOR-based interest rate caps on
     $40 million of debt through  December 16, 1998 and on an  additional  $49.5
     million of debt through December 16, 1999 at 9% and 10%, respectively.  Net
     payments  or receipts  under the swap and cap  agreements  are  recorded as
     adjustments  to interest  expense.  The  carrying  amount of the  Company's
     senior  debt  instruments  approximates  the  fair  values.  The  Company's
     subordinated  debt has an approximate fair value of $184,000,000,  which is
     less than its carrying amount of $199,468,000.


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


<TABLE>
<CAPTION>

                                                        THREE MONTHS ENDED                  SIX MONTHS ENDED
                                                        ------------------                  ----------------
                                                  SEPTEMBER 27,     SEPTEMBER 28,      SEPTEMBER 27,   SEPTEMBER 28,
                                                      1998              1997               1998            1997
                                                      ----              ----               ----            ----


<S>                                               <C>               <C>                <C>             <C>        
Numerator for basic and diluted earnings per share:
  Income before extraordinary charge                 $5,085,000       $5,630,000         $11,169,000    $10,061,000
                                                     ==========       ==========         ===========    ===========

Denominators:
  Weighted-average common stock outstanding -
     denominator for basic EPS                       13,456,000       13,352,000          13,444,000     13,340,000

  Effect of dilutive employee stock options              47,000           53,000              66,000         41,000
                                                     ----------       ----------          ----------     ----------

  Adjusted weighted-average common stock
     outstanding and assumed conversions -
     denominator for diluted EPS                     13,503,000       13,405,000          13,510,000     13,381,000
                                                     ==========       ==========          ==========     ==========

</TABLE>

8.   Income tax expense for the three month periods ended September 27, 1998 and
     September  28, 1997 and also for the six month  periods then ended  exceeds
     the  customary  relationship  between  income tax expense and income before
     income taxes due to  nondeductible  amortization of goodwill of $3,847,000,
     $2,545,000, $7,607,000, and $5,094,000, respectively.


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

                                     - 7 -
<PAGE>

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

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

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

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

                                                     SIX MONTHS ENDED
                                                     ----------------
                                       SEPTEMBER 27, 1998     SEPTEMBER 28, 1997
                                       ------------------     ------------------
                                         (IN THOUSANDS,  EXCEPT PER SHARE DATA)
     Pro forma:
        Net sales                          $  335,836                 $  322,615
        Income from operations                 38,818                     35,365
        Net income                             11,087                      8,729
        Earnings per share, 
          both basic and diluted                 0.82                       0.65


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

<TABLE>
<CAPTION>


                                                               Domestic      Foreign     Elimina-   Consoli-
(In thousands)                                      Parent   Subsidiaries  Subsidiaries   tions      dated
                                                  ------------------------------------------------------------
<S>                                               <C>        <C>           <C>          <C>         <C>      
AS OF SEPTEMBER 27, 1998 
Current assets:
 Cash and cash equivalents                        $   17,038  $     (3,526)  $    3,620 $        -  $  17,132
 Trade accounts receivable                            57,073        56,209       17,951          -    131,233
 Unbilled revenues                                         -        16,659            -          -     16,659
 Inventories                                          46,479        34,806       22,802       (202)   103,885
 Other current assets                                  1,742        10,156        3,806          -     15,704
                                                  ------------------------------------------------------------
  Total current assets                               122,332       114,304       48,179       (202)   284,613
Net property, plant, and equipment                    34,567        29,676       16,504          -     80,747
Goodwill and other intangibles, net                   43,511       263,960       48,506          -    355,977
Intercompany                                         214,865      (380,000)     (64,073)   229,208         (0)
Other assets                                         218,229       161,251       (1,811)  (346,133)    31,536
                                                  ------------------------------------------------------------
  Total assets                                    $  633,504  $    189,191   $   47,305 $ (117,127) $  752,873
                                                  ============================================================

                                     - 8 -
<PAGE>

Current liabilities                               $   31,098  $     45,645   $   17,817 $     (254) $  94,306
Long-term debt, less current portion                 441,088           103        2,547          -    443,738
Other non-current liabilities                         10,725        24,103        3,015          -     37,843
                                                  ------------------------------------------------------------
  Total liabilities                                  482,911        69,851       23,379       (254)   575,887

Shareholders' equity                                 150,593       119,340       23,926   (116,873)   176,986
                                                  ------------------------------------------------------------
  Total liabilities and shareholders' equity      $  633,504  $    189,191   $   47,305 $ (117,127) $ 752,873
                                                  ============================================================

FOR THE SIX MONTHS ENDED SEPTEMBER 27, 1998
Net sales                                         $  130,613    $  166,862    $  48,050 $  (6,387)  $ 339,138
Cost of products sold                                 93,092       132,050       34,528    (6,387)    253,283
                                                  ------------------------------------------------------------
Gross profit                                          37,521        34,812       13,522          -     85,855
                                                  ------------------------------------------------------------
Selling, general and administrative expenses          17,372        12,503        9,175          -     39,050
Amortization of intangibles                              976         5,577        1,054          -      7,607
                                                  ------------------------------------------------------------
                                                      18,348        18,080       10,229          -     46,657
                                                  ------------------------------------------------------------
Income from operations                                19,173        16,732        3,293          -     39,198
Interest and debt expense                             17,358            73          165          -     17,596
Interest and other income                                752            50         (169)         -        633
                                                  ------------------------------------------------------------
Income before income taxes                             2,567        16,709        2,959          -     22,235
Income tax expense                                     1,375         8,134        1,557          -     11,066
                                                  ------------------------------------------------------------
Net income                                        $    1,192    $    8,575    $   1,402 $        -  $  11,169
                                                  ============================================================

FOR THE SIX MONTHS ENDED SEPTEMBER 27, 1998
OPERATING ACTIVITIES:
Net cash (used in) provided by operating
  activities                                      $    5,414    $   (4,456)   $   1,219   $     50  $   2,227
                                                  ------------------------------------------------------------

INVESTING ACTIVITIES:
Purchase of marketable securities, net                   438             -            -          -        438
Capital expenditures                                  (3,720)         (449)      (1,194)         -     (5,363)
Proceeds from sale of businesses                       9,390           (89)           -          -      9,301
Purchases of businesses, net of cash                  (7,000)         (323)           -          -     (7,323)
Other                                                      -         1,403            -          -      1,403
                                                  ------------------------------------------------------------
Net cash used in investing activities                   (892)          542       (1,194)         -     (1,544)
                                                  ------------------------------------------------------------

FINANCING ACTIVITIES:
Net payments under revolving
  line-of-credit agreements                           (2,600)            -         (141)         -     (2,741)
Repayment of debt                                       (537)         (380)         368          -       (549)
Dividends paid                                        (1,883)            -            -          -     (1,883)
Other                                                   (455)            -            -          -       (455)
                                                  ------------------------------------------------------------
Net cash used in financing activities                 (5,475)         (380)         227          -     (5,628)
                                                  ------------------------------------------------------------
Effect of exchange rate changes on cash                    -             -         (714)       (50)      (764)
                                                  ------------------------------------------------------------
Net change in cash and cash equivalents                 (953)       (4,294)        (462)         -     (5,709)
Cash and cash equivalents at beginning of period      17,991           768        4,082          -     22,841
                                                  ------------------------------------------------------------
Cash and cash equivalents at end of period        $   17,038    $   (3,526)   $   3,620   $      -  $  17,132
                                                  ============================================================
</TABLE>

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

                                     - 9 -
<PAGE>

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

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



                                     - 10 -

<PAGE>


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


OVERVIEW

Excluding  the recent  acquisitions  of LICO and  Univeyor on March 31, 1998 and
January 7, 1998, respectively, the Company's products are sold, domestically and
internationally,  principally  to third party  distributors  in  commercial  and
consumer distribution channels, and to a lesser extent directly to manufacturers
and other  end-users.  These are  referred to as  "Products"  sales.  Commercial
distribution  channels  include general  distributors,  specialty  distributors,
service-after-sale  distributors and original equipment  manufacturers ("OEMs").
The general distributors are comprised of industrial distributors, rigging shops
and crane builders.  Specialty  distributors  include  catalog houses,  material
handling specialists and entertainment equipment riggers. The service-after-sale
network includes repair parts distribution  centers,  chain service centers, and
hoist repair  centers.  Company  products are also sold to OEMs, and to the U.S.
and  Canadian   governments.   Consumer   distribution   channels  include  mass
merchandisers,  hardware distributors, trucking and transportation distributors,
farm hardware  distributors and rental outlets. LICO and Univeyor sales, as well
as those of  previously  existing  specialty  divisions,  are made  primarily to
end-users.  These  are  referred  to as  "Solutions"  sales.  LICO's  sales  are
concentrated in the domestic  automotive  industry and, to a lesser extent,  the
steel,  construction and other industrial markets.  Univeyor's sales are made to
automotive,  consumer products  manufacturing,  warehousing and other industrial
markets, primarily in Europe.

RESULTS OF OPERATIONS

Three Months and Six Months Ended  September 27, 1998 and September 28, 1997 Net
sales in the fiscal 1999 quarter ended September 27, 1998 were $168,634,000,  an
increase of  $44,727,000  or 36.1% over the fiscal 1998 quarter ended  September
28,  1997.  Net  sales  for  the  six  months  ended  September  27,  1998  were
$339,138,000,  an increase  of  $90,789,000  or 36.6% over the six months  ended
September 28, 1997. Sales growth during the current quarter was due primarily to
the March 1998 LICO  acquisition  and January  1998  Univeyor  acquisition.  The
impact of the August 1998 sale of the Mechanical Products division resulted in a
decrease  in sales of  $2,446,000  for the  quarter  ended  September  27,  1998
compared to the quarter ended  September 28, 1997.  Excluding the effects of the
acquisitions  and the  divestiture,  compared with the prior year  quarter,  the
Company  experienced  consistent  sales volume through certain of its commercial
distribution channels due to solid demand in the marketplace. This was offset by
softness in the  international  and consumer market channels.  Softness resulted
from the effect of the General Motors  strike,  the impact of the Asian economic
situation and also a shift in demand from small retail hardware stores to larger
do-it-yourself superstores, to which the Company supplies only a small share. In
addition,  list price  increases of  approximately  4% were  introduced  in both
December 1997 and November/December  1996 affecting many of the Company's hoist,
chain and forged products sold in its domestic commercial markets.  Sales in the
Products and  Solutions  segments  were as follows,  in thousands of dollars and
with percentage changes for each group:

                                     - 11 -

<PAGE>

<TABLE>
<CAPTION>



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

<S>                <C>        <C>         <C>       <C>         <C>         <C>         <C>       <C>  
Products           $ 115,998  $ 118,304   $ (2,306)  (1.9)      $  233,923  $ 237,479   $ (3,556)  (1.5)
Solutions             55,906      8,788     47,118  536.2          111,602     16,944     94,658  558.7
Intercompany
 Eliminations         (3,270)    (3,185)       (85)  (2.7)          (6,387)    (6,074)      (313)  (5.2)
                   ---------  ---------   --------              ----------  ---------   --------
   Net sales       $ 168,634  $ 123,907   $ 44,727   36.1       $  339,138  $ 248,349   $ 90,789   36.6
                   =========  =========   ========              ==========  =========   ========
</TABLE>

The Company's gross profit margins were  approximately  25.1%,  28.9%, 25.3% and
28.6% for the  fiscal  1999 and 1998  quarters  and the six months  then  ended,
respectively. The decrease in gross profit margin in the current quarter and six
month periods  resulted from the inclusion of the LICO and Univeyor  operations.
These design and engineer-to-order  businesses typically experience gross profit
margins of approximately  20%, which is lower than the Company's  margins in its
product-oriented businesses.

Selling expenses were $12,461,000,  $10,628,000,  $24,941,000 and $21,793,000 in
the fiscal 1999 and 1998  quarters and the six months then ended,  respectively.
The 1999 expenses were impacted by the addition of LICO and Univeyor activities.
As a percentage of consolidated  net sales,  selling  expenses were 7.4%,  8.6%,
7.4% and 8.8% in the  fiscal  1999 and 1998  quarters  and the six  months  then
ended,  respectively.  The more favorable percentages in the fiscal 1999 quarter
and the six month period are primarily due to low selling  expenses  relative to
sales for LICO and Univeyor, which is normal for these businesses.

General and administrative expenses were $7,213,000, $5,993,000, $14,109,000 and
$12,336,000  in the fiscal 1999 and 1998 quarters and the six months then ended,
respectively.  The 1999  expenses  were  impacted  by the  addition  of LICO and
Univeyor  activities.  As a percentage of  consolidated  net sales,  general and
administrative  expenses were 4.3%,  4.8%,  4.2% and 5.0% in the fiscal 1999 and
1998  quarters  and  the six  months  then  ended,  respectively.  The  improved
percentages  result from  continued  integration of  acquisitions  and the fixed
nature of costs in relation to the increased sales.

Amortization  of  intangibles  was   $3,847,000,   $2,545,000,   $7,607,000  and
$5,094,000  in the fiscal 1999 and 1998  quarters and the six months then ended,
respectively.  The fiscal 1999 increase is due to the  amortization  of goodwill
resulting from the acquisitions of LICO and Univeyor.

As a result of the above, income from operations  increased  $2,209,000 or 13.3%
in the fiscal 1999 quarter and  $7,382,000 or 23.2% in the fiscal 1999 six month
period  compared  to the  respective  periods in fiscal  1998.  This is based on
income from operations of $18,879,000,  $16,670,000, $39,198,000 and $31,816,000
or 11.2%,  13.5%,  11.6% and 12.8% as a percentage of consolidated  net sales in
the fiscal 1999 and 1998 quarters and six months then ended, respectively.

Interest  and  debt  expense  was   $8,978,000,   $5,910,000,   $17,596,000  and
$12,435,000  in the fiscal 1999 and 1998 quarters and the six months then ended,
respectively.  The fiscal 1999  increase is  primarily  due to debt  incurred to
finance  the LICO  acquisition.  As a  percentage  of  consolidated  net  sales,
interest and debt expense was 5.3%,  4.8%,  5.2% and 5.0% in the fiscal 1999 and
1998 quarters and the six months then ended, respectively.

                                     - 12 -
<PAGE>

Interest and other income was $262,000,  $328,000,  $633,000 and $644,000 in the
fiscal 1999 and 1998 quarters and the six months then ended,  respectively.  The
fiscal 1999 decrease is due to decreases in the investment  return on marketable
securities  held for  settlement  of a  portion  of the  Company's  general  and
products liability claims.

Income taxes as a percentage of income  before  income taxes were 50.0%,  49.2%,
49.8% and 49.8% in the fiscal  1999 and 1998  quarters  and the six months  then
ended,  respectively.  The  percentages  reflect  the  effect  of  nondeductible
amortization of goodwill resulting from acquisitions.

As a result of the above, net income decreased  $545,000 or 9.7% for the quarter
and increased $1,108,000 or 11.0% for the six months then ended. As a percentage
of  consolidated  net sales,  net income  was 3.0%,  4.5%,  3.3% and 4.1% in the
fiscal 1999 and 1998 quarters and the six months then ended, respectively.

LIQUIDITY AND CAPITAL RESOURCES

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

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

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

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

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

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

                                     - 13 -
<PAGE>

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

Net cash provided by operating  activities  decreased to $2,227,000  for the six
months  ended  September  27,  1998 from  $15,968,000  for the six months  ended
September  28, 1997.  The  $13,741,000  decrease is primarily  due to changes in
working capital,  reflecting fluctuations in the temporary working capital needs
of LICO.

Net cash used in investing activities decreased to $1,544,000 for the six months
ended  September 27, 1998 from $5,439,000 for the six months ended September 28,
1997.  The  $3,895,000  decrease  in cash  usage is due  primarily  to  proceeds
received  from the  sale of  Mechanical  Products  offset  by cash  used for the
acquisition of Abell-Howe.

Net cash used in financing activities decreased to $5,628,000 for the six months
ended September 27, 1998 from $10,636,000 for the six months ended September 28,
1997.  The  $5,008,000  decrease in cash usage is primarily due to the timing of
debt repayments.



CAPITAL EXPENDITURES

In addition to keeping its current equipment and plants properly maintained, the
Company is committed to replacing, enhancing, and upgrading its property, plant,
and  equipment  to reduce  production  costs,  increase  flexibility  to respond
effectively to market fluctuations and changes, meet environmental requirements,
enhance safety, and promote  ergonomically  correct work stations.  Consolidated
capital  expenditures  for the six months ended September 27, 1998 and September
28, 1997 were $5,363,000 and  $3,280,000,  respectively.  The increase  reflects
timing of the incurrence of maintenance capital expenditures.

INFLATION AND OTHER MARKET CONDITIONS

The  Company's  costs are affected by inflation  in the U.S.  economy,  and to a
lesser extent, in foreign economies including those of Europe,  Canada,  Mexico,
and the Pacific  Rim.  The Company  does not believe  that  inflation  has had a
material effect on results of operations over the periods  presented  because of
low inflation levels over the periods and because the Company has generally been
able to pass on rising costs through  price  increases.  However,  in the future
there can be no assurance  that the  Company's  business will not be affected by
inflation or that it will be able to pass on cost increases.

                                     - 14 -
<PAGE>

YEAR 2000 CONVERSIONS

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

The Company has determined that it needs to modify  significant  portions of its
corporate  business  information  software  so that  its  computer  system  will
function  properly  with  respect  to dates in the year  2000 and  beyond.  Both
internal   and  external   resources   have  been   dedicated  to   identifying,
implementing,  and testing corrective action in order to make such programs Year
2000  compliant;  all such work is planned to be  completed  by July 1999 and is
currently on schedule.  To date the corporate business  information software has
been  100%  assessed,   approximately  75%  has  been  remedially  reprogrammed,
approximately  25% has been  successfully  tested,  and approximately 20% is now
implemented as totally Year 2000  compliant.  The Company  believes  that,  with
modifications  to  existing  software,   the  Year  2000  issue  will  not  pose
significant operational problems for its computer systems.

The Company has completed a corporate-wide assessment of the Year 2000 readiness
of  microprocessor  controlled  equipment  such as robotics,  CNC machines,  and
security and environmental  systems.  This assessment has revealed that at least
70% of microprocessor  controlled equipment,  including over 95% of all security
and environmental  systems,  is currently  compliant.  Any necessary upgrades to
ensure Year 2000  readiness  are  expected to be in place by the end of December
1998.  In  addition,  the Company has  determined  that all of its  manufactured
products are 100% Year 2000 compliant.

The Company has  initiated  communications  with its  suppliers and customers to
determine the extent to which  systems,  products or services are  vulnerable to
failure should those third parties fail to remediate their own Year 2000 issues.
To date the Company has received  responses to over 60% of its  inquiries and no
Year 2000 compliance problem has been identified from these responses.  While we
believe that our Year 2000 compliance plan adequately  addresses  potential Year
2000 concerns and to date no significant  Year 2000 issues have been  identified
with our suppliers and customers,  there can be no guarantee that the systems of
other companies on which our operations rely will be compliant on a timely basis
and will not have an effect on our operations.

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

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

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

                                     - 15 -
<PAGE>

EFFECTS OF NEW ACCOUNTING PRONOUNCEMENTS

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

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


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

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

                                     - 16 -


<PAGE>


PART II.    OTHER INFORMATION

Item 1. Legal  Proceedings - none other than that  previously  disclosed  within
        "Notes to Condensed Consolidated Financial Statements" footnote number 5
        contained herein.

Item 2. Changes in Securities - none.

Item 3. Defaults upon Senior Securities - none.

Item 4. Submission of Matters to a Vote of Security  Holders 
          On August 17, 1998, the following  directors were elected at an Annual
          Meeting of Shareholders with:
            12,717,917 votes cast for and 5,112 against:  Herbert P. Ladds, Jr.;
              Timothy T. Tevens;  Robert L.  Montgomery,  Jr.;  Edward W. Duffy;
              Randolph A. Marks; and L. David Black.

Item 5. Other Information - none.

Item 6. Exhibits and Reports on Form 8-K

      Exhibit 10.1 -  First  Amendment to the Credit  Agreement By and Among THE
                      BANKS,  FINANCIAL  INSTITUTIONS  AND  OTHER  INSTITUTIONAL
                      LENDERS NAMED THEREIN, as Lenders, FLEET NATIONAL BANK, as
                      Initial  Issuing Bank,  FLEET NATIONAL BANK, as Swing Line
                      Bank,  FLEET  NATIONAL BANK, as  Administrative  Agent and
                      Columbus McKinnon Corporation as the Borrower, Dated as of
                      September 23, 1998.

      On October 29, 1998 the Company filed Form 8-K dated October 29, 1998 with
      respect to First Amendment and Restatement of Rights Agreement.


                                     - 16 -
<PAGE>


                                   SIGNATURES


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



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






Date: NOVEMBER 11, 1998                  /S/ ROBERT L.  MONTGOMERY, JR.
      ------------------                 ------------------------------

                                         Robert L. Montgomery, Jr.
                                         Executive Vice President and
                                         Chief Financial Officer (Principal 
                                           Financial Officer)





                                     - 17 -