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                                    FORM 10-K

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

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

                  For the fiscal year ended September 30, 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 0-21461

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                          OMNIQUIP INTERNATIONAL, INC.
             [Exact name of registrant as specified in its charter]

                  DELAWARE                                       43-1721419

       (State or other jurisdiction of                        (I.R.S. employer
       incorporation or organization)                        identification no.)
              222 East Main Street
           Port Washington, Wisconsin                               53074
    (Address of principal executive offices)                     (Zip code)

       Registrant's telephone number, including area code: (414) 268-8965

                              --------------------

           SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

                                                   Name of each exchange
       Title of each class                          on which registered
       -------------------                          -------------------
                                    None

           SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
                                  Common Stock
                         Preferred Stock Purchase Rights
                    Series A Preferred Stock, $.01 par value
                                (Title of class)

                              --------------------

         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. Yes. X No.

         Indicate by check mark if disclosure of delinquent  filers  pursuant to
Item 405 of Regulation S-K is not contained  herein,  and will not be contained,
to the best of  registrant's  knowledge,  in  definitive  proxy  or  information
statements  incorporated  by  reference  in Part  III of this  Form  10-K or any
amendment to this Form 10-K. [ ]

         As of December 18, 1998, the aggregate market value of the common stock
held by  non-affiliates  (13,474,639  shares) of the registrant was $176,854,637
(based on the closing price, on such date, of $13.125 per share).

         As of December 18, 1998, there were 14,271,000  shares of common stock,
$0.01 par value, outstanding.

                       DOCUMENTS INCORPORATED BY REFERENCE

    Proxy Statement dated on or about December 31, 1998 (portion) (Part III)

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<PAGE>
                          OMNIQUIP INTERNATIONAL, INC.

                               INDEX TO FORM 10-K

                                                                       Page
                                                                       ----
                                     Part I

Item 1.   Business....................................................   1
Item 2.   Properties..................................................  12
Item 3.   Legal Proceedings...........................................  13
Item 4.   Submission of Matters to a Vote of Security Holders.........  13

                                     Part II

Item 5.   Market for Registrant's Common Stock and Related              
           Stockholder Matters........................................  13
Item 6.   Selected Consolidated Financial Data........................  14
Item 7.   Management's Discussion and Analysis of Financial
           Condition and Results of Operations........................  15
Item 7a.  Quantitative and Qualitative Disclosures about Market Risk..  24
Item 8.   Financial Statements and Supplementary Data.................  25
Item 9.   Changes in and Disagreements with Accountants on
           Accounting and Financial Disclosure........................  47

                                    Part III

Item 10.  Directors and Executive Officers of the Registrant..........  47
Item 11.  Executive Compensation......................................  47
Item 12.  Security Ownership of Certain Beneficial Owners and           
           Management.................................................  47
Item 13.  Certain Relationships and Related Transactions..............  47

                                     Part IV

Item 14.  Exhibits, Financial Statement Schedules and Reports on        
           Form 8-K...................................................  48

<PAGE>

Item 1.  Business

General

              OmniQuip International,  Inc. (the "Company" or "OmniQuip") is the
largest North American  manufacturer of telescopic  material handlers and one of
the leading North American  producers of aerial work  platforms.  Other products
manufactured  by the  Company  include  skid steer  loaders and a range of other
material handling equipment.  OmniQuip's highly versatile products are used in a
variety of applications for construction,  industrial, maintenance, military and
agricultural  markets.  The Company's  principal products are marketed under the
well-recognized and highly-regarded SKY TRAK, LULL, SNORKELIFT and WILDCAT brand
names.

              Telescopic  material  handlers  are  especially  useful  in  rough
terrain  environments and congested job sites, where their  maneuverability  and
ability to raise, extend and lower payloads provide significant  advantages over
more  traditional  material  handling  equipment,  such as cranes,  straightmast
forklifts and  elevators.  The  Company's  telescopic  material  handlers have a
maximum lift capacity of 5,000 pounds to 10,000 pounds and can position payloads
from 28 feet to 54 feet  above the  ground or 15 feet to 39 feet in front of the
machine's chassis.  The versatility of these units allows users to lower overall
costs by substituting a single telescopic material handler for one or more other
types of material  handling  equipment,  as well as for certain labor  intensive
material  handling  tasks.  The Company  believes it  manufactures  the broadest
product line of  telescopic  material  handlers in North  America.  Shipments of
commercial  telescopic  material handlers increased from approximately 950 units
in  calendar  1990 to  approximately  3,550  units in fiscal  1998.  Based  upon
industry  reports,  the Company believes that its North American market share of
fiscal 1998 shipments of telescopic  material handlers was approximately 31%. In
addition,  OmniQuip  has been a  principal  supplier  since  1988 of  telescopic
material handlers to the military. The Company has a contract to supply the U.S.
Army with a new  generation  of  telescopic  material  handlers  to support  the
logistics  requirements of the Rapid Deployment  Forces.  The Army has estimated
that its  requirements  under the contract  could range up to a maximum of 1,200
ATLAS vehicles,  or a maximum contract value of $120 million.  Through September
30, 1998, the Company has sold  approximately  248 vehicles under this contract.
The Company believes that this contract will enhance its ability to pursue sales
to other  branches of the United  States  armed  forces and to foreign  military
agencies.

              Aerial work  platforms  are mobile,  versatile  units  designed to
position  workers and materials  easily in elevated work locations.  Such highly
versatile   products   allow   users  to   increase   productivity   in  certain
labor-intensive  tasks in an enhanced safety  environment  compared to equipment
traditionally  used to reach  elevated and difficult to reach  positions such as
scaffolding   and  ladders.   The   Company's   broad   product  line   includes
self-propelled  telescoping and/or articulating boom-type platforms,  which have
maximum elevation  capabilities  ranging from 33 feet to 126 feet from ground to
platform height and self-propelled scissor-type platforms with maximum elevation
capabilities ranging from 15 feet to 40 feet from ground to platform height. The
Company also  manufactures  a small line of  truck-mounted  and  trailer-mounted
booms with  elevation  capabilities  ranging  from 40 feet to 69 feet in height.
Shipments of aerial work  platforms  marketed  under the  SNORKELIFT and WILDCAT
brand names increased from  approximately  1,900 units in 1990 to  approximately
4,700 units in fiscal 1998.

              OmniQuip sells and  distributes  its material  handling and aerial
work platform products  commercially  through independent  equipment dealers and
rental companies, including national rental fleets, located in the United States
and Canada.  Internationally,  OmniQuip  markets and  distributes  its  products
through a variety of arrangements with dealers and distributors in approximately
50 countries. To facilitate the sale of its material handling products, OmniQuip
offers its independent  equipment  dealers floor plan and rental fleet financing
assistance  in  connection  with the purchase of the  Company's  


<PAGE>

products.  Such assistance consists of limited,  backup financing guarantees and
repurchase agreements which benefit dealers by providing them the opportunity to
obtain  attractive  financing  terms on the  Company's  products,  which in turn
allows dealers to stock more units for sale or rental.

Industry Overview

              OmniQuip competes principally in selected segments of the material
handling and light  equipment  markets  which  utilize  engines of less than 130
horsepower.  With limited exceptions,  competitors with leading market shares in
these  segments  typically  are  not  large  full-line   construction  equipment
manufacturers.

              North American shipments of construction and allied equipment grew
from $30.8  billion in 1990 to $43.1  billion  in 1996,  representing  a nominal
compound annual growth rate of 5.8%. According to industry estimates,  shipments
of telescopic  material handlers in North America grew from approximately  2,400
units in 1990 to approximately 9,100 units in 1997, representing a real compound
annual growth rate of 20.8%,  and shipments of aerial work  platforms  increased
from approximately  13,200 units in 1990 to approximately  40,900 units in 1997,
representing a real compound annual growth rate of 17.6%.  For the twelve months
ended  September  30, 1998,  unit  shipments of  telescopic  material  handlers,
boom-type  aerial work  platforms and  scissor-type  aerial work  platforms grew
approximately  32.9%,  6.1% and 33.1%,  respectively,  each as  compared  to the
twelve months ended  September 30, 1997. The Company  believes  growth rates for
telescopic  material  handlers and aerial work platforms are  attributable  to a
number of factors, including the following:

                  Increased   Productivity  and  Safety.   Telescopic   material
         handlers and aerial work platforms enable users to reduce costs through
         increased   labor   productivity   compared  to  other   methods  using
         alternative  equipment  or  direct  labor.   Productivity  enhancements
         include a reduction  in the number of indirect  personnel  required for
         material  handling  support  to  load,  transport  and  place  building
         materials and to operate certain other types of construction equipment.
         The  versatility  and variety of  attachments  available for telescopic
         material  handlers  results in higher  utilization of the equipment and
         permits  end-users  to  increase  inventory  turnover at job sites more
         rapidly by taking loads  directly off delivery  trucks and placing them
         where they will be used.  Aerial work platforms provide distinct safety
         and  productivity   advantages  over  alternative   equipment  and  are
         increasingly  attractive  in light of federal  and state  safety  rules
         requiring  the use of tethers and other  safety  devices for workers in
         elevated work environments.

                  Product  Versatility.  Telescopic  material  handlers are more
         versatile  than  other  material  handling  equipment  such as  cranes,
         straightmast forklifts and elevators.  Telescopic material handlers can
         unload,  carry and place  materials  up to five  stories  high in rough
         terrain work environments,  eliminating the need for multiple pieces of
         more  specialized  equipment and reducing the labor  required to handle
         materials  at the work  site.  In  addition,  using  one or more of the
         approximately 40 Company-approved  attachments,  OmniQuip's  telescopic
         material  handlers  can be used in numerous  applications.  Attachments
         include  forks  and  carriages,  grapples,  buckets,  augers,  concrete
         hoppers and truss  booms.  The numerous  applications  provided by such
         attachments used in conjunction with the Company's  telescopic material
         handlers  allow  customers to decrease  aggregate  equipment  costs and
         increase utilization of their material handling equipment.  Aerial work
         platforms also offer increased versatility relative to more traditional
         devices such as ladders and scaffolding.

                  Growth of Equipment  Rentals.  The equipment  rental  industry
         serves a wide variety of industrial,  manufacturing,  construction  and
         governmental  markets. The equipment rental industry,  including rental
         centers,  national  rental  fleets and  independent  dealers  who offer
         equipment for either sale or rental, has grown significantly.  A survey
         conducted for an industry 

                                       2

<PAGE>

         trade association estimates that construction equipment rental revenues
         were  approximately $6.6 billion in 1990 and increased to approximately
         $16.2 billion in 1996.  Increased  availability of rental  construction
         equipment has substantially  broadened the group of potential end-users
         for the Company's products.  Equipment rentals provide end-users having
         limited  needs  or  resources  with the  ability  to  conveniently  and
         economically  rent material  handling  equipment,  as well as necessary
         attachments.  Rental companies can fulfill significant,  but temporary,
         needs of large end-users,  supplementing  capacity during peak activity
         periods. Additionally, rental companies can rent a single unit to small
         contractors for short-term projects.

                  Growth of  Non-Construction  Applications.  Historically,  the
         primary   market  for  telescopic   material   handlers  has  been  the
         construction  market  while  the  principal  markets  for  aerial  work
         platforms have been the construction and building  maintenance markets.
         In recent  years,  however,  applications  for each  product  line have
         emerged in other markets. For example,  since 1988, telescopic material
         handlers  have been used by the Army for  munitions  handling and, more
         recently, general logistics purposes. Telescopic material handlers have
         also   experienced   increasing   acceptance  in  the   industrial  and
         agricultural markets where they are used, among other applications,  to
         transport  and  position  bulk  materials.  Aerial work  platforms  are
         increasingly used in the industrial and commercial market by automobile
         and other manufacturers, airlines and ship builders, among others.

Business Strategy

              The  Company's  strategy  is to  grow  primarily  within  selected
segments of the material  handling  and light  equipment  markets  which (i) are
growing  faster  than  the  construction  equipment  industry  generally,   (ii)
constitute core rental products for the construction  equipment rental industry,
(iii) utilize  engines of less than 130  horsepower,  and (iv) are not typically
dominated by full-line construction equipment manufacturers.

              Key elements of the Company's business strategy include:

                  Providing superior products. The Company focuses on developing
         innovative,  high  performance  products with low  life-cycle  cost. By
         introducing  unique  product  features  and  enhancements,  the Company
         believes that it increases demand for the Company's products.  Examples
         include the pioneering introduction in 1994 of a SKY TRAK model capable
         of lifting and  positioning  materials up to five stories above ground,
         the  proprietary  sliding  telescopic  booms  developed  by  one of the
         Company's wholly-owned subsidiaries, Lull International, Inc. ("Lull"),
         which permit higher precision,  horizontal  maneuvering of materials at
         various lift heights,  and the  introduction by Snorkel  International,
         Inc. ("Snorkel") of industry-leading  safety features, such as envelope
         management,  slope-level  interlocks and pothole protection.  Recently,
         the Company  introduced  its first  model of a new range of  telescopic
         material  handlers  designed to be used for  expanded  applications  in
         North America and to be  competitive  with products  currently  used in
         international markets.

                  Pursuing a multiple brand distribution  strategy.  The Company
         is  pursuing  a  strategy  of  marketing  multiple  light  construction
         equipment products with leading brand names through independently owned
         distributors and increasingly through rapidly expanding national rental
         fleets.  While these national  companies have grown  primarily  through
         acquisition of many of the Company's formerly  independent  dealers and
         rental houses,  strong  representation  of one or more of the Company's
         brands in these expanding  fleets insures broad market coverage and the
         opportunity  to leverage the sale of other  products  and/or  brands to
         these  customers.  This strategy affords the Company the opportunity to
         realize  economies  of  scale  in  providing  parts

                                       3

<PAGE>

         supply and other aftermarket services to its customers, while achieving
         similar  economies in component  purchasing and  manufacturing  for the
         Company. OmniQuip's multiple brand distribution strategy is designed to
         appeal to customers' differing price, performance and support needs.

                  Acquiring  complementary  businesses.  A key  component of the
         Company's  growth  strategy is the  identification  and  completion  of
         complementary acquisitions. The Company's acquisition of Lull in August
         1996 and Snorkel in November 1997  reflects the  Company's  strategy of
         acquiring businesses which utilize complementary  distribution channels
         or which  manufacture and market products which complement the products
         currently  manufactured  and  sold  by the  Company.  The  Company  has
         identified numerous potential acquisition  candidates in the relatively
         fragmented under-130 horsepower market segment.

                  Achieving  cost  savings  from  the  integration  of  acquired
         operations.  The  Company  believes  that  it can  realize  substantial
         additional  cost savings from the  integration of acquired  operations.
         For example,  the Company  anticipates that it can increase  purchasing
         efficiencies  for  components  and  materials,   eliminate  duplicative
         overhead  costs,  streamline  production  processes  and achieve  other
         economies of scale in areas such as parts  supply,  product  design and
         development and dealer finance.

                  Penetrating  international  markets.  While the Company is the
         largest North American  manufacturer of telescopic  material  handlers,
         its sales of such products outside North America are relatively modest.
         The Company is in the process of "globalizing" its telescopic  material
         handler products to increase their appeal in international markets. The
         Company  believes that its  acquisition of Snorkel will help it improve
         its distribution  networks outside North America by utilizing Snorkel's
         existing sales force, particularly in the Far East, and by enabling the
         Company  to  offer  a  broader   line  of  products  to   international
         distributors.

Products

              The Company designs,  manufactures and markets telescopic material
handlers and aerial work platforms as its principal  product lines. In addition,
the Company  manufactures  and distributes a variety of other material  handling
equipment  and  attachments  and offers  parts and service  with  respect to the
products it sells.

              Pro Forma (Unaudited) Net Sales By Product Category1
                                 (in thousands)

<TABLE>
<CAPTION>
                                                                   Fiscal Year Ended September 30,
                                                   -----------------------------------------------------------
                                                      1998        1997       1996         1995      1994
                                                      ----        ----       ----         ----      ----
<S>                                                   <C>       <C>         <C>         <C>       <C>
Telescopic material handlers................          $263,005  $225,778    $166,041    $121,464  $ 75,245
Aerial work platforms.......................           151,778   142,889     146,780     103,998    70,400
Other2......................................            56,762    52,486      54,237      45,047    29,362
                                                      --------  --------    --------    --------  --------
     Total..................................          $471,545  $421,345    $367,058    $270,509  $175,007

</TABLE>
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(1)   The information in the foregoing table reflects the pro forma net sales by
      product  category of TRAK  International,  Inc.  ("TRAK"),  a wholly-owned
      subsidiary of the Company,  Lull and Snorkel for the applicable periods as
      if the acquisitions of these companies had occurred on October 1, 1993.

                                       4

<PAGE>

(2)   Includes  parts and service,  skid steer  loaders and other  miscellaneous
      equipment lines and attachments.

Telescopic Material Handlers

              Telescopic  material  handlers are rough terrain  vehicles used to
transport,  lift  and  position  materials  between  ground  locations,  between
vehicles  and to  elevations  up to five  stories in height.  This  equipment is
typically utilized in North America by residential and non-residential  building
contractors  to  handle  a wide  range of  building  materials  and  components,
including  bricks,  concrete blocks,  open-wall  panels,  roof trusses,  lumber,
drywall sheets,  structural steel and roofing materials.  In addition,  by using
one or more of the approximately 40 Company-approved  attachments, the Company's
telescopic  material  handlers can also be used in  nontraditional,  specialized
applications,  such as  steel  building  construction  or  pole  and  post  hole
drilling. Available attachments include forks and carriages,  grapples, buckets,
augers, concrete hoppers and truss booms. End-users for the Company's telescopic
material handlers  currently include the construction,  military,  agricultural,
landscaping and industrial markets.

              The  Company  currently   manufactures  15  models  of  telescopic
material handlers marketed under the SKY TRAK and LULL brand names. These models
have rated load capacities of 5,000,  6,000, 8,000 and 10,000 pounds and possess
the  capacity  to place  loads  28,  36,  37, 42 and 54 feet  above the  ground.
Suggested  list prices for these products  range from  approximately  $70,000 to
approximately $135,000 per unit.

              Each of the Company's two brands of telescopic  material  handlers
has  unique  characteristics,  which  have  contributed  to  strong  competitive
positions  in the market.  The success of the SKY TRAK brand has been built on a
reputation for strong product  performance and design innovation,  with emphasis
on design  simplicity  and  serviceability.  The LULL brand has a long tradition
associated with its patented transfer carriage technology, which facilitates the
precision  placement of palletized  loads.  LULL brand  products enjoy a premium
reputation for their ease of operation,  durability,  and high resale value. The
Company  believes  the  combination  of its  well-known  SKY TRAK and LULL brand
names,  its  ability  to offer  the  industry's  broadest  product  line and its
dual-brand distribution strategy provide OmniQuip with competitive advantages in
the telescopic material handler market.

              Since 1988,  OmniQuip has been the primary  supplier of telescopic
material  handlers to the United States military.  Such products are used by the
United  States  military  for a variety  of  logistics  requirements,  including
loading  certain  types of rocket  launchers,  loading  and  unloading  military
equipment,  and for a variety of other military  materials  handling tasks.  The
U.S.  military  exclusively used the Company's  telescopic  material handlers in
Operation  Desert  Storm.  In May 1995,  the Company  was awarded a  fixed-price
government  contract  to serve as sole  supplier  to the Army of the ATLAS,  the
latest  generation  of the  military  version  of the  Company's  rough  terrain
telescopic  material handler.  ATLAS is designed as an integral component of the
Army's logistics support strategy for its Rapid Deployment  Forces. The contract
provides for the supply of the Army's  requirements over a period of four years.
The Army has estimated that its requirements for ATLAS vehicles over this period
could range up to a maximum of 1,200 units, or a maximum  contract value of $120
million,  although the Army is not obligated to purchase any specified number of
ATLAS  vehicles.  The  contract  also  affords  the Army an  option  to order an
additional 300 units above the 1,200 unit maximum. The Company believes that the
award of the ATLAS contract also will provide additional opportunities to market
the ATLAS product  directly and through the Army to other branches of the United
States armed forces and to foreign military agencies.

Aerial Work Platforms

              Aerial work  platforms  are mobile,  versatile  units  designed to
position  workers  and  materials  easily  in  elevated  work  locations.  These
platforms  are  used  primarily  by  building  contractors

                                       5

<PAGE>

and commercial and industrial  end-users to enable workers to quickly and easily
reach  elevated  work sites and to perform tasks inside and outside of buildings
at heights up to 126 feet.  Aerial  work  platforms  compete  with  ladders  and
scaffolding,  but provide superior flexibility and improved safety features. For
example,  the  Occupational  Safety  and  Health  Administration  mandates  that
individuals  working  above a certain  height be tethered  to prevent  potential
accidents.  Aerial  work  platforms  allow  such  workers  to  comply  with  the
regulation while at the same time being highly mobile and efficient. The Company
manufactures  and  markets  a full line of  boom-type  telescoping  aerial  work
platforms.  The Company also manufactures and markets  scissor-type  aerial work
platforms and a limited range of truck- and trailer-mounted equipment.

              The Company  manufactures  22 models of boom-type work  platforms.
The  Company's   products  include  units  with  straight   telescoping   booms,
telescoping  booms with  articulating  jib,  units with  articulating  booms and
articulated booms with articulating jib.  Telescoping boom aerial work platforms
can place workers from 37 feet to 126 feet high. Units with  articulating  booms
and  articulating  jibs can place work  platforms  from 33 feet to 60 feet high.
List  prices  of the  Company's  boom-type  aerial  work  platforms  range  from
approximately $40,000 to $270,000.

              The  Company  also   manufactures  12  scissor-type   aerial  work
platforms. Finished-surface ("slab") scissor-type aerial work platforms can lift
workers 15 feet to 40 feet from ground to maximum platform height. Rough-terrain
scissor-type  aerial work  platforms  have a maximum range of 25 feet to 40 feet
from ground to platform  height.  The list prices of the Company's  scissor-type
aerial work platforms range from approximately $13,000 to $56,000.

Other

              Other products  manufactured  and marketed by the Company  include
(i) skid  steer  loaders  (under  the SCAT TRAK  name),  which are  compact  and
versatile  material  handling  machines  used to dig,  lift and  transport  bulk
materials,  (ii)  specialized  material  handling  equipment,  such as  crucible
transporters  (under the  ERICKSON  brand  name) and,  (iii) a limited  range of
self-propelled  power haulers and power  lifters  (under the WORKPRO brand name)
and  articulated  forklifts and loaders,  all of which are used primarily in the
masonry  industry.   In  addition,   the  Company  markets  a  limited  line  of
straightmast  forklifts and  mini-excavators.  The Company also provides product
service support to its distribution networks, and produces and sells through its
distributors  a  wide  range  of  service  parts  to  maintain  the  operational
performance  of its end  products  throughout  their useful  lives.  The sale of
service parts provides an important source of revenue and profitability, as such
sales are historically less sensitive to industry cycles and typically  generate
higher gross  margins  than sales of original  equipment.  The Company  seeks to
provide a high level of parts  availability  and timely  shipments  of orders to
maintain the production availability of its products on customer job sites.

Marketing and Distribution

              The Company sells its products to  independent  equipment  dealers
for  retail  sale  and  rental  and to  equipment  rental  companies,  including
independent  rental centers and national rental fleets,  for rental. The Company
has a multiple brand strategy in its telescopic material handler product line to
appeal to  customers'  differing  price,  performance  and support  needs.  This
strategy provides wider coverage of the available  customer base while affording
the Company the  opportunity  to realize  economies of scale in providing  parts
supply,  service,   attachments,   dealer  finance,   component  purchasing  and
manufacturing.  In addition,  current customer  consolidation  initiatives being
driven by the national  rental  companies are rapidly  increasing the overlap of
several of the Company's  products among common customers,  again increasing the
opportunity  for  economies  of scale,  particularly  in  providing  aftermarket
services.  SKY TRAK and LULL brand telescopic material handlers,  SNORKELIFT and
WILDCAT  brand  aerial  work  platforms,  and SCAT TRAK skid steer  loaders  and

                                       6

<PAGE>

WORKPRO material  handlers are marketed to a mix of independent  retail dealers,
rental centers and national rental fleets.

              Traditionally,  independent  dealers have focused their efforts on
resale of products to end-users.  In recent  years,  however,  many  independent
dealers have built their own rental  fleets to augment  their sales  activities.
Rental  centers are equipment  rental  dealers who focus  exclusively on renting
units on a daily,  weekly  or  monthly  basis to  customers  whose  needs do not
require purchase and full-time  utilization of units. National rental fleets are
large  equipment  rental  companies  which,  through   company-owned  stores  or
franchises, carry out rental activities nationwide.

              During  fiscal 1998,  the light  construction  equipment  industry
began undergoing a dramatic shift as independent  dealers and distributors  were
acquired by  fast-growing  national  rental  companies.  As the national  rental
companies  continue to purchase  more  distributors,  the  consolidation  of the
industry  will  result in fewer,  but  larger  customers.  During  fiscal  1998,
OmniQuip net sales to Rental Service  Corporation and United Rentals,  Inc. were
each greater than 10% of total net sales (after  giving  effect to  acquisitions
made by each such company).

              The Company employs a sales and service force of field and factory
based  managers  and  representatives  to support the sales,  service and rental
activities of its customers with product advertising,  sales literature, product
training and major trade show participation.  OmniQuip seeks to promote end-user
acceptance and continued satisfactory performance of its products worldwide. The
Company  pursues this goal in  cooperation  with a network of  distributors  and
rental  companies  who provide for the  maintenance  and repair of all  OmniQuip
products for end-users.  The Company  promotes a high level of customer  support
through  programs  which closely  monitor the  performance  of its products with
rental fleets and with end-users. This level of product support is maintained by
a  variety  of  programs  and  procedures,   including:  a  toll-free  technical
assistance  program;  on-site service  representative  visits;  factory training
programs;  organization of product  assessment teams  facilitated by the service
department;  and continuing  interaction among  distributors,  rental companies,
end-users and major vendors for failure  analysis of products both in and out of
warranty.

              International sales represented  approximately 12%, 10% and 11% of
pro  forma  consolidated  net  sales,  including  the  acquisitions  of Lull and
Snorkel,  for the  fiscal  years  ended  September  30,  1996,  1997  and  1998,
respectively.   All  of  the   Company's   products   are   primarily   marketed
internationally through dealers and rental companies,  with the exception of the
LULL brand of telescopic  material handlers,  which is marketed  internationally
primarily  through an  exclusive  distribution  agreement  with a single  United
States  exporter.  Most of Snorkel's  international  sales for such periods were
made through Snorkel's  Australian  subsidiary to Australian and other customers
principally located in the Far East.

Financing

              The  Company   supports  its  independent   dealers  in  obtaining
conventional  floor plan  financing and rental fleet  financing to assist in the
purchase of its products.  Under these  financing  arrangements,  dealers borrow
money from  independent  lenders on a secured basis for up to five years.  Where
dealer  financing  is provided  directly  by  independent  lenders,  the Company
assists the  financing  by providing  the  independent  lenders  either a backup
guarantee of a dealer's credit or an undertaking to repurchase used equipment at
a   discounted   price  to  market  at  specified   times  or  under   specified
circumstances.

              At   September   30,   1998,   approximately   $62.4   million  of
Company-assisted  floor  plan  and  rental  fleet  financing  arrangements  were
outstanding on a consolidated  basis.  The Company's actual exposure under these
financing   arrangements   is   significantly   less  than  the  nominal  amount
outstanding. 

                                       7

<PAGE>

Aggregate losses under substantially all of the Company's guarantee  obligations
to third party lenders with respect to the Company's dealers in each of calendar
years 1997 and 1998 are limited to the greater of $1.5 million or 5% of the loan
balance at the previous calendar year end (approximately $47.2 million and $55.0
million  at  December  31,  1996 and 1997,  respectively).  To the  extent  that
independent  lenders  providing  financing for the Company's dealers do not have
(or  do  not  exercise)   direct  recourse  against  the  Company  under  backup
guarantees,  the Company is committed to perform its  repurchase  undertaking to
reacquire  equipment  sold to a defaulting  dealer at a purchase  price equal to
amounts due the independent  lender.  The Company's  actual exposure under these
repurchase  arrangements  is reduced by underlying  equipment  values as well as
careful  portfolio  management,  by both the  Company  and its  lenders.  At the
present time, an active  resale market exists for such  equipment.  At September
30, 1998, past due principal and interest as a percentage of the total portfolio
on a pro forma  consolidated  basis was less than  one-half of one percent.  The
Company's loss experience in recent years has been insignificant.

Manufacturing and Raw Materials

              The Company fabricates, welds, machines and assembles the chassis,
telescopic  booms,  attachments  and many  component  parts  for its  telescopic
material  handlers and aerial work platforms.  During the past three years,  the
Company  has  made  significant   capital  investments  in  its  principal  Port
Washington,  Wisconsin  facility to implement robotic welding and a five-station
wash,  automatic prime and finish coat paint system and to complete a 25,000 sq.
ft.  plant  addition.  In its St.  Paul,  Minnesota  facility,  the  Company has
invested  in  machining  centers  and  numerically  controlled  plasma  punching
capability.   These  investments,   along  with  numerous  projects  to  improve
production  flow  and  material  handling,  have  provided  the  foundation  for
continuing productivity improvements.

              Recent strong demand for telescopic  material  handlers has pushed
the limits of the Company's  manufacturing  capacity.  As a result, in September
1998, the Company launched a two-year, $20 million capacity expansion program to
expand telescopic material handler capacity and improve production  efficiencies
by moving to focused  factories and lean  manufacturing  processes.  The Company
believes that these  integrated  manufacturing  approaches will shorten the lead
time to deliver superior,  lower cost products through the elimination of waste.
A key element of this  program  will be the  consolidation  of SKY TRAK and LULL
telescopic boom production into a dedicated  150,000 square foot leased facility
in Port  Washington.  Other important  elements of this program are expansion of
the light fabrication facility in Oakes, North Dakota and the main LULL facility
in St. Paul as well as re-layout of the main Port Washington facility,  which is
now  dedicated  to SKY TRAK  production.  The  objective of the new and expanded
facilities is to create focused  factories that concentrate on specific elements
of the manufacturing  process such as light fabrication,  boom manufacturing and
LULL and SKY TRAK vehicle  fabrication  and  assembly.  It is expected that this
program will result in  significant  increases in  telescopic  material  handler
capacity.  It is expected that fiscal year 1999 capital spending related to this
capacity  expansion program will be approximately $16 million with the remaining
$4 million to be spent in fiscal year 2000.

              As part of this  strategy  of focused  factories,  in fiscal  year
1998, assembly of skid steer loaders was relocated from the main Port Washington
factory to a separate dedicated facility. In addition, key fabrications for skid
steer loaders,  which were also being made in the main Port Washington facility,
have been outsourced.

              In early 1995, the Company completed  registration  under ISO 9001
of its Port Washington, Wisconsin quality systems, becoming the first telescopic
material handler  manufacturer in North America to achieve this recognition.  In
early 1998, Snorkel completed registration under ISO 9001 for its Elwood, Kansas
facilities.  Registration  under  ISO  9001  represents  the  achievement  of an
internationally  recognized  standard of quality systems  implementation  and is
important for  competing in 

                                       8

<PAGE>

markets with ISO requirements,  such as Europe.  In addition,  the United States
Department  of Defense has  mandated  the use of ISO 9001 for new  procurements,
including the ATLAS contract.  The Company expects to implement  similar quality
system standards in its other facilities.

              The Company is pursuing opportunities to reduce costs of purchased
components  primarily  by  developing  strategic  sourcing  alliances  with  key
suppliers.  As part of this program, the Company will consolidate vendor sources
and enter into  long-term  agreements,  typically  five years or more,  with the
suppliers  that are  selected.  Agreements  have been reached with  suppliers of
axles and  transmissions  and  others are in the  process  of being  negotiated.
Potential annual savings from these alliances are expected to be in the range of
$10-15 million.

              The  principal  raw   materials   and   components   used  in  the
manufacturing  of  the  Company's   products  are  steel,   aluminum,   engines,
transmissions,  axles, hydraulic systems, wheels and tires and cabs. The Company
procures its raw materials and components from multiple vendors, although in the
case of  particular  models it typically  purchases  certain  components  from a
single  vendor.  Although  alternative  suppliers  are  available  for  all  raw
materials  and  components,  the Company  could  experience  delays in obtaining
components meeting the requisite  specifications  from alternative  suppliers in
the event a principal supplier was unable to supply a particular  component.  In
the case of the ATLAS  product  supplied  to the Army,  the  governing  contract
specifies   precisely  the  source  of  key  component  parts  utilized  in  the
manufacture of the ATLAS product. In the event of unavailability of any of these
key  components,  the Company could be precluded from  completing  production of
ATLAS products in a timely fashion unless the Army agreed to  substitution of an
alternative component. The Company seeks to manage the risk of unavailability of
key components and raw materials by dealing only with  substantial,  financially
responsible  vendors and managing  closely its material  requirements as well as
its vendor  relationships.  To date, the Company has not  experienced a material
delay in obtaining a satisfactory supply of key components from vendors.

Product Development and Engineering

              The Company maintains an active program of product development and
engineering  activities  designed to upgrade  existing product lines and develop
new products.  The Company employs approximately 76 employees with experience in
the design of products. On a pro forma basis, including the acquisitions of Lull
and Snorkel,  for the fiscal years ended  September 30, 1996, 1997 and 1998, the
Company  spent  approximately  $5.2  million,  $5.8  million,  and $7.7 million,
respectively, on product development and engineering activities. Since 1987, the
Company has  invested in the computer  systems and  training of its  engineering
staff to support  the  increasing  use of  computer-aided  design.  To  decrease
product  development  time,  reduce  product  development  cost, and improve the
quality of its new  products,  the  Company has  further  invested to  implement
finite  element  analysis  capability,   three-dimensional   solid  design,  and
concurrent  engineering.  The  Company's  product  development  and  engineering
efforts during future periods are expected to emphasize  continued  product line
expansion,  design  modifications  to expand  the  worldwide  acceptance  of its
products,  and the expanded  sourcing of  attachments  to improve access to more
end-user markets.

Warranty and Service

              OmniQuip  products  are  warranted  for  design,  workmanship  and
material  quality.  Warranty  lengths vary  depending on  competitive  standards
within individual  markets.  In general,  warranties tend to be for one year and
cover all parts and labor for non-maintenance  repairs,  provided the repair was
not necessitated by operator abuse.  Optional  extended  warranties,  beyond the
base period,  are  available for  purchase.  Warranty work is performed  only by
authorized  distributors.  Distributors submit claims for warranty reimbursement
to the Company and are  credited  for the cost of repairs so long as the repairs
meet prescribed standards.

                                       9

<PAGE>

Trademarks and Patents

              The Company owns and maintains U.S.  trademark  registrations  for
all of its principal trademarks.  The Company owns or otherwise has the right to
use  these  trademarks  in other  countries  where a  significant  volume of its
products  are sold  and  where  such  ownership  or  right to use is  considered
necessary to protect the Company's proprietary rights.

              The Company applies for and maintains patents in the United States
and elsewhere where the Company  believes such patents are necessary to maintain
the Company's  interest in its inventions.  Currently,  the Company  possesses a
patent on  three-stage  telescopic  booms used in the LULL  brand of  telescopic
material  handlers,  which  expires in 2007.  The Company  believes  this patent
provides  it with a  competitive  advantage  in selected  markets,  but does not
believe that the expiration of this patent would have a material  adverse effect
upon its business or ability to compete.

Competition

              The markets for the Company's products are highly competitive. The
principal  competitive  factors include  distribution,  price,  design features,
performance, product reliability and the availability of financing.

              In the market for telescopic material handlers, the Company is the
largest  North  American  manufacturer,  with an estimated  share of fiscal 1998
shipments  of  telescopic  material  handlers  of  approximately  31%,  and  its
principal  competitors  include Gradall  Industries,  Inc. and JCB International
Co.,  Ltd.  Other   competitors  in  the  North  American  market  include  Case
Corporation,  Caterpillar Inc., Gehl Company,  Ingersoll-Rand  Company,  Manitou
S.A.,  Pettibone  Corporation  and  Traverse  Lift.  Competitors  in this market
outside  the  United  States  include   Caterpillar   Inc.,   FDI/Sambron,   JCB
International Co., Ltd., Manitou S.A. and Merlo S.p.A. The largest  manufacturer
of aerial work platforms is JLG  Industries,  Inc. Other  principal  competitors
include Genie Industries,  Grove Worldwide,  Skyjack Inc., Terex Corporation and
UpRight, Inc.

              Many of the Company's  competitors are larger than the Company and
possess  significantly  greater  financial,  marketing and technical  resources.
There can be no  assurance  that the  Company  will not  experience  significant
competition in the future from large global construction equipment manufacturers
and other  competitors or that existing  competitors will not take actions which
could adversely affect the Company's operating results.

Environmental and Safety Regulation

              OmniQuip  is  subject  to  federal,   state,   local  and  foreign
environmental  laws and regulations that impose  limitations on the discharge of
pollutants  into the  environment  and establish  standards  for the  treatment,
storage and disposal of toxic and hazardous wastes.  The Company is also subject
to the Occupational  Safety and Health Act and similar state,  local and foreign
statutes.  The Company believes it is in material compliance with all applicable
environmental  laws and  regulations.  The Company  does not expect any material
impact on future recurring  operating costs of compliance with currently enacted
environmental regulations.

              Under  federal,  state  and  local  laws,  including  the  federal
Comprehensive Environmental Response, Compensation, and Liability Act, a current
owner or operator of real  property may be held liable for the costs of cleaning
up certain  hazardous  materials on the  property.  Similarly,  persons who have
arranged for the disposal of hazardous  materials on  properties  owned by third
parties may be held liable for cleanup costs for such properties.  In each case,
liability  may be imposed  without  regard to whether the person knew of or took
reasonable acts to prevent the contamination. Liability under such

                                       10

<PAGE>

laws is often  joint and  several,  that is,  any  single  liable  person may be
required to bear the entire  costs of the  environmental  cleanup.  That person,
however,  may usually seek contribution from other responsible persons, if there
are any;  and it is typical  for  groups of  responsible  parties  to  apportion
liability among themselves.

              The  Company  regularly   conducts  an  environmental   assessment
consistent  with  recognized  standards  of  due  diligence  on  properties  and
businesses  which it acquires.  To date,  these  assessments have not identified
contamination in respect of acquired  properties that would be reasonably likely
to result in a material  adverse  effect on the Company's  business,  results of
operations or financial condition. As a general rule, the Company intends to use
such  assessments as part of the evaluation of proposed  acquisitions.  However,
there can be no assurance that  environmental  assessments have  identified,  or
will in the future identify,  all material liabilities relating to the Company's
properties  and  businesses,  that any  indemnification  agreements  that can be
negotiated  will cover all  potential  liabilities,  or that  changes in cleanup
requirements  or subsequent  events at the  Company's  properties or at off-site
locations will not result in significant costs to the Company.

Product Recall

              From time to time, the Company discovers defects in product design
for existing products which require it to take steps to correct or retrofit,  at
the Company's expense, previously sold products. During the year ended September
30,  1998,  the  Company  identified  a defect in its LULL  brand of  telescopic
material handlers and established reserves of approximately $1.4 million for the
cost of retrofitting such telescopic material handlers. It is expected that this
retrofit program will be substantially  complete by the end of fiscal year 1999.
There can be no  assurance,  however,  that the  ultimate  cost of the  retrofit
program  will not exceed the amount of  reserves  established  by the Company or
that the retrofit program will not adversely affect the Company's reputation and
result in a decline in sales of the Company's products.

              In connection with the acquisition of Snorkel, the Company assumed
responsibility   for  a  recall  program  involving   HUNTERLIFT  scissor  lifts
manufactured  by Snorkel  between  1979 and 1992.  The recall was  prompted by a
compliance  issue with certain  voluntary  industry  standards.  The Company has
established a reserve in  connection  with the recall  program.  There can be no
assurance,  however,  that the ultimate cost of the  HUNTERLIFT  recall will not
exceed the amount of reserves established by the Company or that the recall will
not adversely  affect the Company's  reputation and result in a decline in sales
of the Company's products.  In connection with the assumption of the recall, the
Company has assumed  responsibility  for a lawsuit  relating to the recall.  The
lawsuit  currently  includes  approximately 25 plaintiffs and alleges damages in
connection with the recall.  The Company is defending the lawsuit vigorously.

Employees

              At September 30, 1998, the Company  employed  approximately  1,750
persons. Approximately 330 employees at the Company's Port Washington, Wisconsin
facility  are  covered  under  a  collective   bargaining   agreement  with  the
International  Association of Machinists and Aerospace Workers, which expires in
November 2003.  This is the only  collective  bargaining  agreement to which the
Company is a party.  Substantially all of the approximately 280 employees at the
Company's St. Paul, Minnesota facility and the approximately 75 employees of the
Company's  Oakes,  North  Dakota  facility  are  employed  pursuant  to a  lease
arrangement with CBM Industries,  Inc., d/b/a RJ Associates.  Under the terms of
such agreement,  RJ Associates (which is not an affiliate of the Company) leases
employees  to the Company and pays the  employees'  salaries and  benefits.  The
Company in turn pays RJ Associates a management fee and reimburses RJ Associates
for the  employees'  salaries and  benefits.  The agreement can be terminated by
either  party upon short  notice.  The Company is  obligated  to hire the leased
employees if the Company terminates the arrangement but continues conducting the
operations in which the employees are engaged.  The Company does not  anticipate
any material  

                                       11

<PAGE>

disruption in its business in the event of a termination of this agreement.  The
Company has not  experienced  any work  stoppage  during the past five years and
considers its relations with employees to be good.

Item 2. Properties

              The  Company's   headquarters  are  located  in  Port  Washington,
Wisconsin,  and the Company  maintains  manufacturing  facilities  in Minnesota,
North Dakota,  Kansas, and New Zealand.  Set forth below is certain  information
with respect to the Company's manufacturing and warehouse facilities.

<TABLE>
<CAPTION>
                                   Square
                                   Footage         Owned/
          Location              (Approximate)      Leased                        Activities/Products
----------------------------- ------------------ ----------- ------------------------------------------------------------
<S>                           <C>                <C>         <C>    
Port Washington, Wisconsin         150,000       Owned       Telescopic material handlers; research and development
Port Washington, Wisconsin         165,000       Leased(1)   Boom fabrication and assembly; office and storage
Port Washington, Wisconsin         45,000        Leased(2)   Skid steer loader assembly
St. Paul, Minnesota                100,000       Owned       Telescopic material handlers; research and development
Eagan, Minnesota                   40,000        Leased(3)   Parts warehouse; office space
Oakes, North Dakota                30,000        Leased(4)   Miscellaneous products and component parts
Elwood, Kansas                     77,000        Owned       Aerial work platform assembly
Elwood, Kansas                     182,000       Leased(5)   Aerial work platform fabrication
Wathena, Kansas                    50,000        Leased(6)   Aerial work platform assembly
Levin, New Zealand                 15,000        Leased(7)   Aerial work platforms

</TABLE>

---------------------
(1)   The lease is on a month-to-month basis.
(2)   The initial term of the lease  expires on July 14,  2002.  The Company has
      two options to renew the lease for successive three-year terms.
(3)   The initial term of the lease expires on October 1, 2004.  The Company has
      the option to renew the lease for two additional five-year terms.
(4)   The  initial  term of the lease  expires  on April 1,  2000 (the  "Initial
      Term"). Upon expiration of the Initial Term, the Company has the option to
      purchase the facility or to extend the lease for an  additional  30 months
      (the "Extended  Term").  If the Company  chooses to extend the lease term,
      lease payments during the Extended Term will be applied to the purchase of
      the facility.
(5)   The initial term of the lease expires on February 1, 1999. The Company has
      the option to renew the lease for three additional terms of five years.
(6)   The lease expires on June 30, 2002.
(7)   The lease expires on November 17, 2007.

              The Company also maintains other leased office and warehouse space
in Port Washington,  Wisconsin,  St. Joseph,  Missouri,  Wootton Bassett, United
Kingdom, Sydney and Melbourne,  Australia and Auckland, New Zealand. The Company
anticipates no significant difficulty in leasing alternative space at reasonable
rates in the event of the  expiration,  cancellation  or  termination of a lease
relating  to  any  of  the  Company's   material  leased   properties.   Certain
manufacturing  facilities  have  experienced  capacity  constraints  which  have
limited production output and have caused  manufacturing  inefficiencies  during
fiscal 1998. It is expected  that these  capacity  constraints  will continue to
affect the material  

                                       12

<PAGE>

handling  business in fiscal  1999.  The Company is  addressing  these  capacity
constraints  through the capacity  expansion program described in Item 7 of this
Report under "Capital Resources and Liquidity."

Item 3.  Legal Proceedings

              Product  liability and personal injury claims are asserted against
the Company from time to time for various injuries alleged to have resulted from
defects in the  manufacture  and/or  design of the Company's  products.  Product
liability and personal injury claims are covered by the Company's  comprehensive
general liability insurance policies,  subject to certain deductible amounts and
maximum coverage limits.  The Company has reserves for such deductible  amounts,
which it  believes  to be  adequate  based on its  previous  claims  experience.
However,  there can be no assurance  that  resolution  of product  liability and
personal injury claims in the future will not have a material  adverse effect on
the Company.

              In addition to product liability and personal injury claims,  from
time to time, the Company is the subject of legal proceedings,  including claims
involving employee matters,  commercial matters and similar claims. There are no
such claims  currently  pending which the Company  believes to be material.  The
Company maintains comprehensive general liability insurance which it believes to
be adequate for the continued operation of its business.

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

              None.

                                     PART II

Item 5.  Market for Registrant's Common Stock and Related Stockholder Matters

              The Company's common stock is quoted on the Nasdaq National Market
under the symbol  "OMQP." As of December 18, 1998,  there were 201 record owners
of the Company's  Common Stock.  The following table sets forth,  for the fiscal
quarters  indicated,  the high and low bid prices for the Company's Common Stock
as reported by the Nasdaq  National Market since March 21, 1997, the day trading
commenced and dividends declared per share for the periods indicated.

                                                                      Dividends
                                                   High       Low     Per Share
-------------------------------------------------------------------------------
Fiscal 1997
-----------
  Second quarter (beginning March  21, 1997)     $14 5/8    $14 1/4       --
  Third quarter                                   24 1/4     11 7/8       --
  Fourth quarter                                  25 3/8     18 1/8    $0.01

Fiscal 1998
-----------
  First quarter                                  $21 1/4    $15 1/2    $0.01
  Second quarter                                  26 5/8     19 1/2     0.01
  Third quarter                                   25 3/4     17 1/4     0.01
  Fourth quarter                                  19 1/4      9         0.01


                                       13

<PAGE>

Item 6.  Selected Consolidated Financial Data

         The following table sets forth consolidated financial data derived from
the consolidated financial statements of the Company or TRAK, as the predecessor
to the Company.

<TABLE>
<CAPTION>
                                                             Company                           Predecessor(1)
                                          ----------------------------------------------------------------------------------
                                               Fiscal Year Ended           Aug. 17, 1995   Oct. 1, 1994    Fiscal Year Ended
                                                 September 30,                through        through          September 30,
                                          -------------------------------- Sept. 30, 1995  Aug. 16, 1995           1994
                                          1998 (2)  1997 (3)   1996 (4)      
                                          --------- --------- ------------ -------------------------- ----------------------
                                                         (dollars in thousands, except per share data)
<S>                                       <C>        <C>         <C>          <C>           <C>                <C>
Statement of Operations Data:

Net sales...........................      $455,653  $264,213     $124,861     $  12,723     $ 75,401           $60,973
Cost of sales.......................       349,584   192,270       92,688         9,787       57,707            47,208
                                          --------- --------- ------------ -------------------------- -----------------
Gross profit........................       106,069    71,943       32,173         2,936       17,694            13,765
Selling, general and administrative         47,365    27,717       16,311         1,670       10,903             9,502
expenses............................
                                          --------- --------- ------------ -------------------------- -----------------
Operating income ...................        58,704    44,226       15,862         1,266        6,791             4,263
Interest expense....................        10,261     6,106        3,434           353        1,379             1,363
Other finance charges...............         2,553     2,182        2,012           269        1,121               699
                                          --------- --------- ------------ -------------------------- -----------------
Income before income taxes..........        45,890    35,938       10,416           644        4,291             2,201
Provision  for income taxes.........        18,547    14,556        4,060           262        1,762               876
                                          --------- --------- ------------ -------------------------- -----------------
Income  before extraordinary item and
change in accounting principles.....        27,343    21,382        6,356           382        2,529             1,325
Extraordinary item, net(5)..........         (545)     (782)        (314)           ---          ---               ---
Cumulative effect of change in
accounting principles...............           ---       ---          ---           ---         (241)(6)           ---
                                          --------- --------- ------------ -------------------------- -----------------
Net income..........................      $ 26,798  $ 20,600      $ 6,042      $    382      $ 2,288           $ 1,325
                                          --------- --------- ------------ -------------------------- -----------------

Basic Earnings Per Share: (7)(8)

     Income before extraordinary item       $ 1.92    $ 1.66       $ 0.56        $ 0.03
     Extraordinary item(5)..........        (0.04)    (0.06)       (0.03)           ---
                                          --------- --------- ------------ -------------
     Net income.....................        $ 1.88    $ 1.60       $ 0.53        $ 0.03
                                          --------- --------- ------------ -------------
Diluted Earnings Per Share: (7)(8)

     Income before extraordinary item       $ 1.90    $ 1.66       $ 0.56        $ 0.03
     Extraordinary item(5)..........        (0.04)    (0.06)       (0.03)           ---
                                          --------- --------- ------------ -------------
     Net income.....................        $ 1.86    $ 1.60       $ 0.53        $ 0.03
                                          --------- --------- ------------ -------------
Dividends Per Share ................        $ 0.04    $ 0.01       $ 0.00        $ 0.00
                                          --------- --------- ------------ -------------

</TABLE>

<TABLE>
<CAPTION>
                                                                 Company                            Predecessor (1)
                                           ----------------------------------------------------  ----------------------
                                                           As of September 30,                    As of September 30,
                                           ----------------------------------------------------  ----------------------
                                            1998 (2)     1997 (3)     1996 (4)      1995 (9)           1994 (9)
                                           -----------  -----------  ------------ -------------  ----------------------
                                                                     (Dollars in thousands)
<S>                                          <C>           <C>           <C>           <C>                     <C>
Balance Data Sheet:

Working capital                              $ 58,892     $ 14,402      $ 13,393       $10,699                 $   260
Total assets........................          316,462      144,298       139,580        48,332                  28,651
Short-term debt.....................           13,750        8,625         3,875           540                   9,436
Long-term debt......................          124,250       25,609        84,566        23,781                   2,966
Mandatorily redeemable preferred stock            ---          ---           ---           ---                   3,262
Stockholders' equity................           94,969       70,398(10)    12,425(10)     6,383                   1,783

</TABLE>

                                       14

<PAGE>

-----------------
(1)  The Company was  organized in 1995 for the purpose of acquiring  TRAK,  the
     predecessor company.
(2)  Amounts as of and for the fiscal year ended  September 30, 1998 reflect the
     acquisition of Snorkel on November 17, 1997.
(3)  Amounts as of and for the fiscal year ended  September 30, 1997 reflect the
     effects of the Company's  initial public offering of common shares on March
     20, 1997.
(4)  Amounts as of and for the fiscal year ended  September 30, 1996 reflect the
     acquisition of Lull on August 15, 1996.
(5)  Amount in fiscal year 1998  reflects  the  write-off  of  deferred  finance
     charges,  net of $371 of  income  tax  benefits,  in  connection  with  the
     refinancing  of debt.  Amount in fiscal  1997  reflects  the  write-off  of
     deferred finance charges, net of $521 of income tax benefits, in connection
     with the  refinancing  of debt.  Amount in fiscal  year 1996  reflects  the
     write-off of deferred finance charges,  net of $200 of income tax benefits,
     in connection with the refinancing of debt.
(6)  In October 1994, TRAK adopted Statement of Financial Accounting  Standards,
     No. 106,  "Employer's  Accounting  for  Postretirement  Benefits Other Than
     Pensions"  (SFAS 106).  The  cumulative  effect of adopting SFAS 106 was to
     record a charge of $241, net of income tax benefits.
(7)  Basic and diluted  earnings per share is based on  weighted-average  shares
     outstanding of 14,261,000 and 14,392,000, respectively, for the fiscal year
     ended September 30, 1998, 12,845,000 and 12,905,000,  respectively, for the
     fiscal year ended September 30, 1997 and 11,250,000 in 1996 and 1995.
(8)  Given  the  historical  organization  and  capital  structure  of TRAK,  as
     predecessor  to  the  Company,   earnings  per  share  information  is  not
     considered meaningful for the predecessor.
(9)  The changes in the balances as of September  30, 1995 versus  September 30,
     1994 primarily reflect the acquisition of TRAK by the Company on August 16,
     1995 and the related financing thereof.
(10) The  change  in  stockholders'  equity  as of  September  30,  1997  versus
     September 30, 1996 includes $37,516 of proceeds from the Company's  initial
     public offering of common stock which was completed in March 1997.

Item 7.  Management's Discussion and Analysis of Financial Condition and Results
         of Operations

Overview

              The Company was formed for the purpose of acquiring TRAK in August
1995.  Subsequent thereto, the Company completed the acquisition of the business
of Lull in August 1996 and Snorkel in November  1997. Set forth below is certain
information with respect to these acquisitions:

Acquisition  Date of Acquisition  Business                          Year Founded
-----------  -------------------  --------                          ------------
TRAK             August 1995      Manufacturer of telescopic material    1954
                                  handlers and skid steer loaders
Lull             August 1996      Manufacturer of telescopic material    1956
                                  handlers
Snorkel          November 1997    Manufacturer of aerial work platforms  1959

                                       15

<PAGE>

              The Company  accounted  for each of these  acquisitions  under the
purchase  method  of  accounting,  with  the  purchase  price  allocated  to the
estimated fair market value of the assets acquired and the liabilities  assumed.
The excess of the purchase price over the estimated fair market value of the net
assets  acquired  has been  allocated to  goodwill,  resulting in  approximately
$120.7  million of goodwill at September  30,  1998.  The  amortization  of such
goodwill  over 40 years  will  result  in an  annual  noncash  charge  to future
operations of approximately $3.1 million.

              On November 17, 1997,  the Company  completed the  acquisition  of
substantially  all of the  assets of  Snorkel.  The  purchase  price paid by the
Company for Snorkel was $100 million in cash at closing plus the  assumption  of
certain  liabilities.  The funds were  obtained  by the  Company  pursuant  to a
secured credit facility which replaced the Company's  existing credit  facility.
The Company is also  required to pay an additional  purchase  price of up to $50
million.  Any additional payment will be equal to the amount of the net sales of
Snorkel for the  twelve-month  period  commencing on April 1, 1998 and ending on
March  31,  1999  (the  "Earn-Out  Period")  in  excess  of $140  million,  such
additional  amount not to exceed $20 million,  plus 70% of the amount of the net
sales of Snorkel  during the  Earn-Out  Period in excess of $160  million,  such
additional amount not to exceed $30 million.  The acquisition has been accounted
for under the purchase  method of accounting  with the excess of purchase  price
over the estimated fair value of net assets acquired  recorded as goodwill.  Any
additional  purchase  price  determined  as  described  above is  expected to be
recorded as additional goodwill when such amounts are determined.

              The Company operates in a single industry  segment.  The Company's
principal  products  consist of material  handling  and  construction  equipment
utilizing  engines of less than 130 horsepower.  In addition to specific factors
affecting  the  Company's  results of  operations  as discussed  below,  certain
factors  typically  recur from period to period.  For example,  cost of sales is
driven to a large extent by the cost of purchased  components and raw materials,
which typically comprise 80% of the total cost of sales. Other factors affecting
cost of sales  are  production  volume  and the  resultant  leveraging  of fixed
overhead,  as well as  productivity  of the labor force.  In addition,  selling,
general  and   administrative   ("SG&A")   expenses  include  costs  related  to
developing,   marketing  and  selling  the  Company's   products,   as  well  as
infrastructure  costs for management and systems.  While certain SG&A costs vary
with the level of net sales,  many are relatively  fixed over fairly wide ranges
of unit volume. It is the Company's strategy to invest in infrastructure  costs,
in many cases in advance of increased sales.

              The Company  sells its  products to  national  rental  centers for
rental and to  independent  equipment  dealers for sale and rental.  The Company
supports its independent equipment dealers in obtaining conventional  floor-plan
and rental fleet financing to assist in the purchase of its products. Under such
financing  arrangements,  dealers  borrow  money from  independent  lenders on a
secured basis for up to five years.  The Company  assists with such financing by
providing the  independent  lenders  additional  guarantees  or other  financial
support with respect to the  obligations  of its dealers.  In  conjunction  with
these  floor-plan  arrangements,  the Company also  provides  certain  financing
benefits to its dealers to support both retail and rental purchases.  Such costs
are accounted for as other finance charges and approximated  $2.0 million,  $2.3
million and $2.6  million for the Company for the fiscal  years ended  September
30, 1996, 1997 and 1998, respectively.

              Certain   manufacturing   facilities  have  experienced   capacity
constraints which have limited  production output and have caused  manufacturing
inefficiencies  during the last nine months affecting sales and gross margins. A
major capacity  expansion  program,  which was launched in September 1998 and is
described in more detail under "Capital Resources and Liquidity," is expected to
address these issues.  However,  it is expected that these capacity  constraints
will continue to affect the material handling business in fiscal 1999.

              The  following  discussion   summarizes  the  significant  factors
affecting the  consolidated  operating  results and  financial  condition of the
Company  for the year  ended  September  30,  1998  compared  to the year  ended
September  30, 1997,  and the year ended  September  30, 1997 as compared

                                       16

<PAGE>

to the  year  ended  September  30,  1996.  The  discussion  should  be  read in
conjunction with the consolidated  financial statements referenced in Item 14(1)
herein.

Sales

<TABLE>
<CAPTION>
                                                           Fiscal Year Ended September 30,
                                                        1998            1997             1996
                                                   --------------- ---------------  ---------------
   <S>                                             <C>             <C>              <C>
   Commercial telescopic material handlers               $242,033        $221,269         $ 96,174
   Military telescopic material handlers                   20,972           4,510              675
   Compact products (1)                                    23,803          22,327           20,674
   Aerial work platforms                                  137,550             ---              ---
   Parts and other products                                31,295          16,107            7,338
                                                   --------------- ---------------  ---------------
                                                         $455,653        $264,213         $124,861
                                                   --------------- ---------------  ---------------
</TABLE>

(1)  Compact  products  includes  skid  steer  loaders,  mini-excavators,  power
     haulers and power lifters and articulated forklifts and loaders.

Results of Operations

              The following  table sets forth for the fiscal years indicated the
percentage of net sales  represented by certain items reflected in the Company's
consolidated statement of income:

<TABLE>
<CAPTION>
                                                           Fiscal Year Ended September 30,
                                                         1998            1997             1996
                                                    --------------- ---------------  ---------------
<S>                                                 <C>             <C>              <C>
Net sales...................................               100.0%          100.0%           100.0%
Cost of sales...............................                76.7%           72.8%            74.2%
                                                   -------------------------------------------------
Gross profit................................                23.3%           27.2%            25.8%
Selling, general and administrative expenses                10.4%           10.5%            13.1%
                                                   -------------------------------------------------
Operating income............................                12.9%           16.7%            12.7%
Interest expense............................                 2.2%            2.3%             2.8%
Other finance charges.......................                 0.6%            0.8%             1.6%
                                                   -------------------------------------------------
Income before income taxes and extraordinary                10.1%           13.6%             8.3%
item........................................
Provision for income taxes..................                 4.1%            5.5%             3.2%
                                                   -------------------------------------------------
Income before extraordinary item............                 6.0%            8.1%             5.1%
Extraordinary item..........................                -0.1%           -0.3%            -0.3%
                                                   -------------------------------------------------
Net income..................................                 5.9%            7.8%             4.8%
                                                   -------------------------------------------------

</TABLE>

Fiscal Year Ended September 30, 1998 Compared to Fiscal
Year Ended September 30, 1997

              Net sales for fiscal year 1998 were $455.7 million, an increase of
$191.4  million over net sales of $264.2 million for fiscal year 1997. Net sales
from Snorkel, acquired on November 17, 1997, accounted for $150.5 million of the
$191.4  million  increase,  while net sales for the existing  OmniQuip  business
increased by $40.9 million, or 15.5%.

               Commercial sales of telescopic  material handlers for fiscal year
1998 were $242.0  million,  an increase of $20.8 million,  or 9.4%,  over fiscal
year  1997  reflecting  continued  strong  market  growth  partially  offset  by
constraints on manufacturing output due to capacity limitations.  Military sales
were $21.0 million for fiscal 1998 compared to $4.5 million for fiscal 1997 as a
result of increased  production  

                                       17

<PAGE>

under the U.S. Army ATLAS  contract.  Sales of compact  products for fiscal year
1998 were $23.8 million,  up $1.5 million, or 6.6%, compared to fiscal year 1997
due to the  introduction of a new line of  mini-excavators  in the second fiscal
quarter.  Sales of parts and other  products  for  fiscal  year 1998 were  $31.3
million,  an increase of $15.2  million,  or 94%,  over the 1997 period.  Of the
$15.2 million increase in parts and other products,  $12.9 million resulted from
the  acquisition of Snorkel and the remaining $2.2 million  reflected  increased
demand  for parts  driven by the  increased  population  of TRAK and Lull  units
operating in the field.

              Gross profit for fiscal year 1998 was $106.1 million,  an increase
of $34.2  million over gross profit of $71.9  million for fiscal year 1997.  The
increase in gross profit primarily reflected the increase in net sales discussed
above.  The gross margin  decreased to 23.3% for fiscal year 1998 from 27.2% for
fiscal year 1997. The decline in gross margin was due to the addition of Snorkel
sales at significantly  lower gross margin than existing OmniQuip sales, and, to
a lesser extent, increased mix of lower margin military sales. Also contributing
to the margin  decline  were  manufacturing  inefficiencies  related to capacity
constraints and unsuccessful  union organizing  activities  during the middle of
fiscal  1998,  higher  costs  related  to the new  Millennia  series  telescopic
material handler and higher volume discounts  reflecting  increased sales to the
large national rental companies. It is anticipated that the increased proportion
of sales to large national  rental  companies,  including the associated  volume
discounts, will continue in the foreseeable future.

              Selling,  general and administrative  ("SG&A") expenses for fiscal
year 1998 were $47.4 million, an increase of $19.6 million over SG&A expenses of
$27.7 million for fiscal year 1997. Of the $19.6 million increase, $14.9 million
resulted from the  acquisition of Snorkel.  The remainder was a result of higher
research and development  expenses and increased SG&A expenses to support higher
levels of sales.  SG&A expenses as a percentage of net sales  declined  slightly
from 10.4% for fiscal year 1998 compared to 10.5% for fiscal year 1997.

              Operating  income  for  fiscal  year  1998 was $58.7  million,  an
increase of $14.5 million,  or 32.7%, over operating income of $44.2 million for
fiscal year 1997 due to the factors discussed above.  Operating margin decreased
to 12.9% for fiscal  year 1998 from 16.7% for fiscal  year 1997.  The decline in
operating margin reflected the factors described above.

              Interest  expense  for  fiscal  year  1998 was $10.3  million,  an
increase of $4.2 million over  interest  expense of $6.1 million for fiscal year
1997.  The increase in interest  expense was due to additional  debt incurred to
finance the November 1997  acquisition  of Snorkel  partially  offset by a lower
average interest rate.

              Other  finance   charges,   which  are   primarily   comprised  of
dealer-related  finance charges, were $2.6 million for fiscal year 1998 compared
to $2.2  million  for fiscal  year 1997.  The  increase  in finance  charges was
related to increased  financing  activity at TRAK and Lull  primarily  resulting
from increased sales volume.  Other finance charges as a percentage of net sales
decreased from 0.8% to 0.6%. The reduction in finance charges as a percentage of
sales primarily  reflected the fact that, until recently,  Lull and Snorkel have
not historically incurred such charges.

              Provision  for income taxes for fiscal year 1998 was $18.5 million
compared to $14.6  million  for fiscal year 1997.  The  increase  reflected  the
increase in income before income taxes of $10.0 million. The Company's effective
tax rate was 40.4% for fiscal year 1998 compared to 40.5% for fiscal year 1997.

              Income from  continuing  operations for fiscal year 1998 was $27.3
million,  an increase of $5.9 million over income from continuing  operations of
$21.4 million for fiscal year 1997, as a result of the factors described above.

                                       18

<PAGE>

              In November 1997, in connection  with the  refinancing  related to
the Snorkel  acquisition,  the Company incurred an extraordinary  charge of $0.5
million,  net of $0.4  million  of income tax  benefits,  for the  write-off  of
deferred financing charges. In March 1997, in connection with its initial public
offering and the  application of the proceeds  therefrom to repay  indebtedness,
the  Company  incurred  an  extraordinary  charge of $0.8  million,  net of $0.5
million of income tax benefits,  related to pre-payment  penalties and write-off
of deferred financing charges.

              Net income for fiscal year 1998 was $26.8 million,  an increase of
$6.2 million from net income of $20.6  million for fiscal year 1997, as a result
of the factors described above.

              Basic and  diluted  earnings  per share,  before the effect of the
extraordinary  item discussed  above,  were $1.92 and $1.90,  respectively,  for
fiscal year 1998. Basic and diluted earnings per share, before the effect of the
extraordinary item discussed above, were $1.66 for fiscal year 1997.

Fiscal Year Ended September 30, 1997 Compared to Fiscal Year Ended 
September 30, 1996

              Net sales for fiscal year 1997 were $264.2 million, an increase of
$139.4 million over net sales of $124.9  million for fiscal year 1996.  Sales of
commercial  telescopic  material  handlers  for  fiscal  year 1997  were  $221.3
million,  an increase of $125.1  million over fiscal year 1996.  Military  sales
were $4.5  million for fiscal 1997  compared to $0.7 million for fiscal 1996 due
to the  start-up of sales  under the U.S.  Army ATLAS  contract,  which had only
prototype  sales in the 1996 period.  Sales of compact  products for fiscal year
1997 were $22.3 million,  up $1.7 million compared to fiscal year 1996. Sales of
parts and other products for fiscal year 1997 were $16.1 million, an increase of
$8.8 million over the 1996 period.  Of the $125.1 million increase in telescopic
material  handlers,  $93.4 million was due to the  acquisition  of Lull, and the
remaining $31.7 million  reflected  continued strong growth in TRAK's commercial
telescopic  business.  Increased  compact  products sales were due partly to the
acquisition  of Lull and increased  demand in North America and  internationally
outside of Europe,  offset by reduced  shipments to Europe due to the  Company's
European  distributor  being  acquired  by a  competitor.  Of the  $8.8  million
increase in parts and other products, $6.6 million resulted from the acquisition
of Lull and $2.2  million  reflected  increased  demand for parts  driven by the
increased population of TRAK units operating in the field.

              Gross profit for fiscal year 1997 was $71.9  million,  an increase
of $39.8  million over gross profit of $32.2  million for fiscal year 1996.  The
increase in gross profit primarily reflected the increase in net sales discussed
above.  The gross margin  increased to 27.2% for fiscal year 1997 from 25.8% for
fiscal  year  1996.  The  improvement  in  gross  margin  was  due  to  improved
manufacturing  efficiencies  at all three Company  plants,  price increases that
were  implemented  in early 1997,  economies due to higher volumes and increased
mix of  telescopic  material  handlers  which carry  higher  margins  than other
products.  Partially  offsetting  these  improvements  was  the  effect  of  the
acquisition of Lull, whose gross margin has historically been lower than that of
TRAK.

              Selling,  general and administrative expenses for fiscal year 1997
were $27.7  million,  an increase of $11.4  million over SG&A  expenses of $16.3
million  for fiscal  year 1996.  Of the $11.4  million  increase,  $7.3  million
resulted  from the  acquisition  of Lull.  SG&A  expenses as a percentage of net
sales  decreased  to 10.5% for fiscal year 1997 from 13.1% for fiscal year 1996.
This  decrease  in the SG&A  percentage  primarily  reflected  the effect of the
acquisition of Lull, whose SG&A percentage has historically been lower than that
of TRAK.

              Operating  income  for  fiscal  year  1997 was $44.2  million,  an
increase of $28.4 million over operating income of $15.9 million for fiscal year
1996.  Operating  margin  increased to 16.7% for fiscal year 1997 from 12.7% for
fiscal year 1996.  The  improvements  in operating  income and operating  margin
reflected the factors described above.

                                       19

<PAGE>

              Interest  expense  for  fiscal  year  1997  was $6.1  million,  an
increase of $2.7 million over  interest  expense of $3.4 million for fiscal year
1996.  The increase in interest  expense was due primarily to the increased debt
incurred to finance the August 1996  acquisition  of Lull,  partially  offset by
subsequent  reduction of debt with proceeds from the initial public  offering in
March 1997 and with cash flow from operations.

              Other  finance   charges,   which  are   primarily   comprised  of
dealer-related  finance charges, were $2.3 million for fiscal year 1997 compared
to $2.0  million  for fiscal  year 1996.  The  increase  in finance  charges was
related  to  increased  financing  activity  at TRAK  primarily  resulting  from
increased  sales  volume.  Other  finance  charges as a percentage  of net sales
decreased from 1.6% to 0.9%. The reduction in finance charges as a percentage of
sales primarily reflected the fact that Lull has not historically  incurred such
charges.

              Provision  for income taxes for fiscal year 1997 was $14.6 million
compared to $4.1  million  for fiscal  year 1996.  The  increase  reflected  the
increase in income before income taxes of $25.5 million and, to a lesser extent,
an increase in the  effective  tax rate between  these  periods.  The  Company's
effective  tax rate was 40.5% for fiscal year 1997  compared to 39.0% for fiscal
year 1996.

              Income from  continuing  operations for fiscal year 1997 was $21.4
million, an increase of $15.0 million over income from continuing  operations of
$6.4 million for fiscal year 1996, as a result of the factors described above.

              In March 1997, in connection  with the initial public offering and
the  application of the proceeds  therefrom to repay  indebtedness,  the Company
incurred an extraordinary  charge of $0.8 million, net of $0.5 million of income
tax  benefits,  related  to  prepayment  penalties  and  write-off  of  deferred
financing  charges.  In August 1996,  in  connection  with  refinancing  of debt
associated  with the Lull  acquisition,  the Company  incurred an  extraordinary
charge of $0.3 million,  net of $0.2 million of income tax benefits,  related to
write-off of deferred financing charges.

              Net income for fiscal year 1997 was $20.6 million,  an increase of
$14.6  million from net income of $6.0 million for fiscal year 1996, as a result
of the factors described above.

              Diluted  earnings  per share for fiscal year 1997 were  $1.60,  an
increase of $1.07 from diluted  earnings per share of $0.53 for fiscal year 1996
as a result of the increase in net income described above partially offset by an
increase in the weighted  average shares  outstanding  from 11.3 million to 12.8
million.

Capital Resources and Liquidity

              Net cash provided by operating activities of the Company was $17.7
million for fiscal year 1998.  Working capital (excluding the effects of changes
in cash and current  portions of long-term  debt)  increased by $19.9 million in
the  period,   primarily   reflecting  a  $28.1  million  increase  in  accounts
receivable,  and a $9.8 million  increase in inventories,  partially offset by a
$15.1  million  increase in  accounts  payable  and a $3.7  million  increase in
accrued  liabilities.  Accounts receivable  increased primarily due to increased
sales  levels  and  timing  of  shipments  at the end of the  year.  Inventories
increased due to higher sales volume and capacity  constraints  which  prevented
manufacturing  operations from achieving the planned production  schedules.  The
increase in accounts payable primarily  reflected  increased inventory purchases
resulting  from  increases  in  production  schedules.  The  increase in accrued
liabilities primarily reflected increases in accruals related to customer volume
rebate programs.  Application of customer volume rebates subsequent to September
30, 1998 will  adversely  impact cash flows in the first and second  quarters of
fiscal 1999. Net cash used in investing activities was $112.8 million, including
$9.9 million for capital  expenditures and $102.1 million for acquisition of

                                       20

<PAGE>

the net assets of Snorkel.  Capital  expenditures  in fiscal 1998 were primarily
for information systems and capacity improvements.  These cash requirements were
financed with a new credit facility as described  below.  The cash balance as of
September 30, 1998 primarily reflected cash balances of the Company's Australian
subsidiary.

               Net cash  provided  by  operating  activities  of the Company was
$21.6 million for fiscal year 1997.  Working  capital  (excluding the effects of
changes in cash and  current  portions  of  long-term  debt)  increased  by $5.4
million in the period, primarily reflecting increases in accounts receivable and
inventories  related  to growth in sales  volume.  Cash  provided  by  operating
activities of the Company for the period was used  primarily to finance  capital
expenditures  of $3.0 million,  to make payments to former TRAK  shareholders of
$1.0 million tied to receipt of orders under contracts with the U.S. Army and to
repay existing indebtedness.

              Net cash provided by operating  activities of the Company was $8.6
million  for the fiscal year 1996.  Working  capital  (excluding  the effects of
changes in cash and  current  portions  of  long-term  debt)  decreased  by $1.4
million in the period which primarily  reflected  increases in accounts  payable
and  other  current  liabilities  partially  offset  by  increases  in  accounts
receivable and inventories. Cash provided by operating activities of the Company
for the  period  was used  primarily  to finance  capital  expenditures  of $1.4
million,  to make payments to former TRAK  shareholders  of $0.4 million tied to
receipt  of orders  under  contracts  with the U.S.  Army and to repay  existing
indebtedness.  The  aggregate  purchase  price paid by the  Company  for Lull in
August 1996 totaled  approximately  $69.0  million plus assumed  liabilities  of
$14.6 million. The acquisition was financed with additional borrowings under the
Company's amended credit facilities.

              On March 20,  1997,  the  Company  completed  its  initial  public
offering of common stock,  selling 3 million  primary and 6.2 million  secondary
shares (including shares issued upon exercise of the underwriters' overallotment
option)  for $14 per  share,  before  underwriting  discounts  and  commissions.
Proceeds to the Company from the  offering of $37.6  million (net of expenses of
the offering of $1.7 million)  were used to repay $22.6 million of  subordinated
debt (including  accrued interest and prepayment fees) and $15.0 million of bank
term debt.

              On March 11, 1998, a secondary public offering of the common stock
of the Company became  effective,  in which Harbour Group  Investments III, L.P.
and an affiliate  sold an aggregate of 3.6 million  shares of common stock at an
offering price of $25.50 per share, less underwriting discounts and commissions.
No proceeds from the secondary public offering were received by the Company.

              During  November  1997,  in  connection  with the  acquisition  of
Snorkel,  the Company  entered  into a new credit  facility  which  replaced the
existing loan and security  agreement.  The new agreement  provides for a $165.0
million credit facility  consisting of a $40.0 million revolving credit facility
and a $125.0  million  term loan.  The term loan  requires  quarterly  principal
payments  ranging from $2.5 million to $6.25 million  commencing on February 28,
1998  with the  final  maturity  on  November  17,  2004.  Borrowings  under the
agreement  bear interest at a rate that is determined  from a pricing grid based
on the Company's  leverage  ratio (debt / EBITDA).  At September  30, 1998,  the
interest rate under this  agreement was prime or LIBOR plus 1.0%. In conjunction
with  entering  into  the  new  credit  facility,   the  Company  recognized  an
extraordinary  loss  in  November  1997  of  $0.5  million  attributable  to the
write-off of $0.9 million of unamortized deferred financing fees, net of related
tax benefits.

              Amounts  outstanding  under the credit  facility at September  30,
1998 were $138 million.  In addition the Company had $0.2 million in outstanding
letters of credit under this revolving credit  facility.  At September 30, 1998,
the Company had unused borrowing  capacity of $15.8 million under 

                                       21

<PAGE>

this facility. The Company was in compliance with the financial covenants of its
facilities as of September 30, 1998.

              Pursuant to the Snorkel acquisition,  the Company will be required
to pay an  additional  purchase  price of up to $50  million  in May  1999.  The
additional  payment  will be equal to the amount of the net sales of Snorkel for
the twelve-month period commencing on April 1, 1998 and ending on March 31, 1999
in excess of $140  million,  such  additional  amount not to exceed $20 million,
plus 70% of the amount of the net sales of Snorkel during the Earn-Out Period in
excess of $160 million, such additional amount not to exceed $30 million.  Based
on the  performance  of Snorkel  since April 1, 1998,  the Company  expects this
payment to be material and intends to finance  such payment  through an increase
in the existing credit  facility.  Such an increase in the credit facility would
be subject to approval by the banks and will likely result in a higher  interest
rate.

              As the result of a major capacity expansion program for telescopic
material handlers launched in September 1998, the Company's capital expenditures
for fiscal  year 1999 will be higher  than  normal.  It is  expected  that total
capital   expenditures   for  the  year  ending   September  30,  1999  will  be
approximately $22 million,  approximately $16 million of which is related to the
capacity  expansion  program.  These  capital  expenditures  are  expected to be
financed  through  internal  cash  flow  and  existing  credit  lines,  with the
exception  of  approximately  $4  million  related to the  Oakes,  North  Dakota
building  expansion which will most likely be financed  through a capital lease.
It is anticipated that approximately 75% of the capital spending for fiscal year
1999 will occur in the first half of the fiscal year.

Backlog

              The Company's backlog as of September 30, 1998 was $172.7 million,
of which $36.3 million  relates to the ATLAS military  contract.  It is expected
that  substantially  all of the commercial  backlog and approximately 80% of the
military backlog will be shipped before September 30, 1999.

Market Risk

              In the  ordinary  course of  business,  the  Company is exposed to
foreign  currency and interest rate risks,  which the Company does not currently
consider to be material.  These exposures primarily relate to having investments
denominated in foreign currencies and to changes in interest rates. Fluctuations
in currency exchange rates can impact operating results, including net sales and
operating expenses.  The Company may utilize derivative  financial  instruments,
including forward exchange  contracts and swap agreements,  to manage certain of
its foreign  currency and interest rate risks that it considers  practical to do
so. The Company  currently has $67.5 million  outstanding under an interest rate
swap  agreement  which fixes LIBOR at 6.24% through  November  2004. The Company
does not enter into  derivative  financial  instruments  for  trading  purposes.
Market  risks that the Company  currently  has  elected  not to hedge  relate to
foreign currency  exposure and the portion of the floating rate debt not covered
by the interest rate swap.

New Accounting Pronouncements

              In June 1997 the Financial  Accounting  Standards  Board  ("FASB")
issued  Statement  of  Financial   Accounting   Standards  No.  130,  "Reporting
Comprehensive  Income"  ("SFAS 130").  The statement  establishes  standards for
reporting  and display of  comprehensive  income and  components  in a financial
statement  that is  displayed  with  the  same  prominence  as  other  financial
statements.  SFAS 130 is effective for years  beginning after December 15, 1997.
The Company is continuing  to analyze SFAS 130 and does not currently  expect it
to have a significant impact on its financial statement presentation.

                                       22

<PAGE>

              In June 1997 the FASB issued  Statement  of  Financial  Accounting
Standards No. 131,  "Disclosures  about  Segments of an  Enterprise  and Related
Information"  ("SFAS  131").  The  statement  requires  that the Company  report
certain information if specific requirements are met about operating segments of
the Company including information about services,  geographic areas of operation
and major  customers.  SFAS 131 is effective for years  beginning after December
15, 1997. The Company is reviewing the  applicability  of SFAS 131 on its future
reporting requirements.

              In June 1998 the FASB issued  Statement  of  Financial  Accounting
Standards  No.  133,   "Accounting   for  Derivative   Instruments  and  Hedging
Activities"  ("SFAS 133").  The statement  establishes  accounting and reporting
standards for  derivative  instruments  and for hedging  activities and requires
recognition of all derivatives on the balance sheet measured at fair value. SFAS
133 is effective  for all fiscal  quarters  beginning  after June 15, 1999.  The
Company is  continuing  to evaluate the  provisions of SFAS 133 to determine its
impact on financial position and results of operations.

Year 2000

The Company utilizes software and related computer technologies essential to its
operations that use two digits rather than four to specify the year, which could
result in a date  recognition  problem with the transition to the year 2000. The
Company  has  established  a  plan,  utilizing  third-party   consultants  where
necessary,  to assess  the  potential  impact of the year 2000 on the  Company's
systems and  operations  and to implement  solutions to address this issue.  The
Company has  substantially  completed the assessment of its internal systems for
year 2000  compliance  issues.  The Company's  plan for  remediation  includes a
combination  of repair and  replacement of affected  systems.  For the Company's
internal systems at TRAK and Lull, this remediation is an incidental consequence
of the ongoing  implementation  of a new integrated  core business  system.  The
Company  expects  the  remediation  phase to be  completed  by June 1999 and for
testing to be  conducted in July 1999.  For the  Company's  internal  systems at
Snorkel,  this remediation is a software patch for the existing system which has
been  implemented  and is currently  being tested.  The Company expects that all
critical systems will be year 2000 compliant by July 31, 1999. Substantially all
of the costs  incurred,  and  expected  to be  incurred,  to  achieve  year 2000
compliance have been and are a part of ongoing  expenditures to upgrade systems.
The Company is dependent upon various third parties,  including  certain product
suppliers,  to conduct its business operations.  The failure of mission-critical
third parties to achieve year 2000  compliance  could have a material  effect on
the Company's  operations.  The Company is presently in the assessment  phase of
its year 2000 plan with respect to the Company's suppliers,  vendors and service
providers  for year  2000  compliance.  The  Company  expects  to  complete  the
assessment  phase by March 1999. The Company plans to develop a contingency plan
by June 1999 in the event its  systems  or its  mission-critical  vendors do not
achieve  year  2000  compliance.  However,  there can be no  assurance  that the
Company will not experience  unanticipated  costs and/or business  interruptions
due to year 2000 problems in its internal  systems or its supply chain,  or that
such costs and/or  interruptions  will not have a material adverse effect on the
Company's consolidated results of operations.

Cautionary Statements Regarding Forward-Looking Statements

              Certain statements included herein are forward-looking  statements
concerning  the  Company's   operations,   economic  performance  and  financial
condition.  Such  statements  are  subject to various  risks and  uncertainties.
Actual results could differ materially from those currently anticipated due to a
number of factors,  including  cyclical  fluctuations  in demand,  manufacturing
capacity  constraints and production  inefficiencies,  stiffer  competition from
larger and better capitalized companies,  the effects on price and margin of the
rapid  consolidation  of  distributors,  field  warranty  campaigns  for certain
products,  loss of, or reduced orders under, the Company's contract for the sale
of ATLAS vehicles, issues related to year 2000 compliance, the inability to make
complementary  

                                       23

<PAGE>

acquisitions,  or to integrate any such acquisitions,  and risks associated with
the substantial borrowings that may be necessary to finance acquisitions.

Item 7a.  Quantitative and Qualitative Disclosures about Market Risk

              The  information  required  by this  item is set  forth  under the
caption  "Market  Risk"  of  Item  7  of  this  Report,   which  information  is
incorporated herein by reference thereto.















                                       24

<PAGE>

Item 8.  Financial Statements and Supplementary Data


                        Report of Independent Accountants


To the Board of Directors
and Stockholders of
OmniQuip International, Inc.

In our opinion,  the  accompanying  consolidated  balance sheets and the related
consolidated  statements of income,  of changes in  stockholders'  equity and of
cash flows present fairly, in all material  respects,  the financial position of
OmniQuip International,  Inc. and its wholly-owned subsidiaries at September 30,
1998 and 1997 and the results of their  operations and their cash flows for each
of the three fiscal years in the period ended  September 30, 1998, in conformity
with generally accepted accounting  principles.  These financial  statements are
the responsibility of the Company's management; our responsibility is to express
an opinion on these financial  statements based on our audits.  We conducted our
audits of these  statements  in  accordance  with  generally  accepted  auditing
standards which require that we plan and perform the audit to obtain  reasonable
assurance   about  whether  the  financial   statements  are  free  of  material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the  amounts  and  disclosures  in  the  financial  statements,   assessing  the
accounting  principles  used and significant  estimates made by management,  and
evaluating the overall  financial  statement  presentation.  We believe that our
audits provide a reasonable basis for the opinion expressed above.

PricewaterhouseCoopers LLP
St. Louis, Missouri
November 3, 1998


                                       25

<PAGE>

OMNIQUIP INTERNATIONAL, INC.
Consolidated Balance Sheet
September 30, 1998
(Dollars in thousands, except per share data)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>

                                                                                        September 30,
                                                                                    1998            1997
<S>                                                                             <C>             <C>
 Assets
 Current assets:
   Cash                                                                         $     4,684     $         5
   Accounts receivable, net                                                          66,580          22,689
   Inventories                                                                       71,065          30,956
   Prepaid expenses and other current assets                                         10,020           6,640
                                                                                -----------    ------------
       Total current assets                                                         152,349          60,290

 Property, plant and equipment, net                                                  41,375          17,130
 Goodwill                                                                           120,746          65,359
 Other assets, net                                                                    1,992           1,519

                                                                                $   316,462     $   144,298 
                                                                                ===========     ===========

Liabilities and stockholders' equity 
Current liabilities:
   Current portion of long-term debt                                            $    13,750     $     8,625
   Accounts payable                                                                  47,834          20,433
   Accrued liabilities                                                               31,873          16,830 
                                                                                -----------     -----------
       Total current liabilities                                                     93,457          45,888
                                                                                -----------     -----------

 Long-term debt                                                                     124,250          25,609
 Other noncurrent liabilities, net                                                      418             422
 Deferred income taxes                                                                3,368           1,981
                                                                                -----------     -----------
                                                                                    128,036          28,012
                                                                                -----------     -----------
Commitments and contingencies (Notes 4, 7, 13 and 15)

 Stockholders' equity:
   Preferred stock, $.01 par value, 1,500,000 shares
    authorized; no shares issued and outstanding
   Common stock, $.01 par value, 100,000,000 
    shares authorized;  14,270,000 and 14,250,000 
    shares issued and outstanding, respectively                                         143             143
   Additional paid-in capital                                                        44,128          43,726
   Other                                                                              (754)           (352)
   Cumulative translation adjustment                                                (1,657)             ---
   Retained earnings                                                                 53,109          26,881
                                                                                -----------     -----------
       Total stockholders' equity                                                    94,969          70,398 
                                                                                -----------     -----------

                                                                                $   316,462     $   144,298 
                                                                                ===========     ===========
</TABLE>

        The  accompanying  notes  are an  integral  part of  these  consolidated
financial statements.

                                       26

<PAGE>

OMNIQUIP INTERNATIONAL, INC.
Consolidated Statement of Income
September 30, 1998
(In thousands, except per share data)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                   For the Fiscal Year Ended September 30,
                                                                 1998              1997              1996
<S>                                                              <C>               <C>               <C>
Net sales                                                        $ 455,653          $ 264,213        $ 124,861
Cost of sales                                                      349,584            192,270           92,688
                                                             --------------   ----------------  ---------------

Gross profit                                                       106,069             71,943           32,173
Selling, general and administrative expenses                        47,365             27,717           16,311
                                                             --------------   ----------------  ---------------

Operating income                                                    58,704             44,226           15,862
                                                             --------------   ----------------  ---------------

Other expenses:
    Interest on indebtedness                                        10,261              5,578            2,384
    Interest on indebtedness - related parties                           -                528            1,050
    Other finance charges                                            2,597              2,259            1,981
    Other, net                                                        (44)               (77)               31
                                                             --------------   ----------------  ---------------

                                                                    12,814              8,288            5,446
                                                             --------------   ----------------  ---------------

Income before income taxes and extraordinary item                   45,890             35,938           10,416
Provision for income taxes                                          18,547             14,556            4,060
                                                             --------------   ----------------  ---------------

Income before extraordinary item                                    27,343             21,382            6,356
Extraordinary item - loss on refinancing of long-term
 debt, net of income tax benefit of $371, $521 and
 $200 in 1998, 1997 and 1996, respectively                           (545)              (782)            (314)
                                                             --------------   ----------------  ---------------

Net income                                                        $ 26,798           $ 20,600         $  6,042
                                                             ==============   ================  ===============

Basic earnings per share:

    Income before extraordinary item                               $  1.92            $  1.66          $  0.56
    Extraordinary item                                              (0.04)             (0.06)           (0.03)
                                                             --------------   ----------------  ---------------

        Net income                                                 $  1.88            $  1.60          $  0.53
                                                             ==============   ================  ===============

Weighted average shares                                             14,261             12,845           11,250
                                                             ==============   ================  ===============

Diluted earnings per share:
    Income before extraordinary item                               $  1.90            $  1.66          $  0.56
    Extraordinary item                                              (0.04)             (0.06)           (0.03)
                                                             --------------   ----------------  ---------------

        Net income                                                 $  1.86            $  1.60          $  0.53
                                                             ==============   ================  ===============

Weighted average shares                                             14,392             12,905           11,250
                                                             ==============   ================  ===============
</TABLE>

       The  accompanying  notes  are an  integral  part  of  these  consolidated
financial statements.

                                       27

<PAGE>

OMNIQUIP INTERNATIONAL, INC.
Consolidated Statement of Changes in Stockholders' Equity
September 30, 1998
(Dollars in thousands)
--------------------------------------------------------------------------------


<TABLE>
<CAPTION>
                                                  Additional                     Cumulative
                                      Common       paid-in                       translation      Retained
                                      Stock        capital          Other        adjustment       Earnings         Total
<S>                                     <C>           <C>             <C>                <C>        <C>            <C>
Balance, September 30, 1995             $  113        $ 6,240         $  (352)           $  -        $   382        $  6,383

Net income                                   -              -                -              -          6,042           6,042
                                    -----------  -------------  ---------------  -------------  -------------   -------------

Balance, September 30, 1996                113          6,240            (352)              -          6,424          12,425

Common stock issued                         30         37,486                -              -              -          37,516

Net income                                   -              -                -              -         20,600          20,600

Dividends paid                               -              -                -              -          (143)           (143)
                                    -----------  -------------  ---------------  -------------  -------------   -------------

Balance, September 30, 1997                143         43,726            (352)              -         26,881          70,398

Issuance of restricted stock                 -            402            (402)              -              -               -

Cumulative translation adjustment            -              -                -        (1,657)              -         (1,657)

Net income                                   -              -                -              -         26,798          26,798

Dividends paid                               -              -                -              -          (570)           (570)
                                    -----------  -------------  ---------------  -------------  -------------   -------------

Balance, September 30, 1998             $  143       $ 44,128         $  (754)      $ (1,657)       $ 53,109        $ 94,969
                                    ===========  =============  ===============  =============  =============   =============

</TABLE>

       The  accompanying  notes  are an  integral  part  of  these  consolidated
financial statements.

                                       28

<PAGE>

OMNIQUIP INTERNATIONAL, INC.
Consolidated Statement of Cash Flows
September 30, 1998
(Dollars in thousands)
--------------------------------------------------------------------------------


<TABLE>
<CAPTION>
                                                                For the Fiscal Year Ended September 30,
                                                             1998            1997                  1996

<S>                                                         <C>             <C>                <C>    
Cash flows from operating activities:
    Net income                                              $   26,798      $   20,600         $   6,042
    Adjustments to reconcile net income to net cash
     provided by operating activities, excluding the
     effect of acquisitions:

      Depreciation                                               4,618           2,022             1,175
      Amortization                                               3,285           1,996               571
      Deferred income tax provision (benefit)                    1,983             804             (712)
      Loss on refinancing of long-term debt                        916           1,303               514
      (Increase) decrease in current assets:
        Accounts receivable, net                              (28,090)         (1,011)           (1,264)
        Inventories                                            (9,846)         (3,416)           (3,628)
        Prepaid expenses and other current assets                (742)           (670)              (39)
      Increase (decrease) in current liabilities:
        Accounts payable                                        15,106           (462)             2,397
        Other current liabilities                                3,709             188             3,946
      Other                                                       (22)             241             (433)
                                                         --------------  --------------    --------------
Net cash provided by operating activities                       17,715          21,595             8,569
                                                         --------------  --------------    --------------

Cash flows from investing activities:
    Acquisition of net assets of Lull Industries, Inc.               -               -          (69,007)
    Acquisition of net assets of Snorkel Division of
    Figgie International Inc., net                           (102,111)               -                 -
    Capital expenditures, net                                  (9,921)         (3,021)           (1,404)
    Payments to former TRAK shareholders for
     ATLAS program                                               (527)         (1,025)             (446)
    Other                                                        (274)             247             (133)
                                                         --------------  --------------    --------------
Net cash used in investing activities                        (112,833)         (3,799)          (70,990)
                                                         --------------  --------------    --------------

Cash flows from financing activities:
    Proceeds from issuance of long-term debt                   125,000               -            74,000
    Proceeds from initial public offering                            -          37,516                 -
    Net borrowings (payments) on revolver                       20,891         (4,332)           (3,542)
    Payments on long-term debt                                (42,125)        (50,885)           (6,500)
    Payments of dividends                                        (570)           (143)                 -
    Financing costs incurred                                   (1,742)               -           (1,485)
                                                         --------------  --------------    --------------

Net cash provided by (used in) financing activities            101,454        (17,844)            62,473
                                                         --------------  --------------    --------------

Effect of exchange rate changes on cash                        (1,657)               -                 -
                                                         --------------  --------------    --------------
</TABLE>


       The  accompanying  notes  are an  integral  part  of  these  consolidated
financial statements.

                                       29

<PAGE>

<TABLE>
<CAPTION>


<S>                                                          <C>              <C>              <C>            
Net change in cash                                               4,679            (48)                52
Cash at beginning of period                                          5              53                 1
                                                         --------------  --------------    --------------
Cash at end of period                                        $   4,684        $      5          $     53
                                                         ==============  ==============    ==============

SUPPLEMENTAL DISCLOSURES OF CASH
 FLOW INFORMATION:
Cash paid during the period for:
    Interest on indebtedness                                $   10,156       $   5,622         $   2,619
                                                         ==============  ==============    ==============
    Income taxes                                            $   10,342      $   14,543         $   3,672
                                                         ==============  ==============    ==============

</TABLE>

       The  accompanying  notes  are an  integral  part  of  these  consolidated
financial statements.


                                       30

<PAGE>

OMNIQUIP INTERNATIONAL, INC.
Notes to Consolidated Financial Statements
September 30, 1998
(Dollars in thousands, except per share data)
--------------------------------------------------------------------------------

1.       Organization

         OmniQuip owns 100% of the outstanding common stock of its subsidiaries,
         TRAK International,  Inc. (TRAK),  Lull International,  Inc. (Lull) and
         Snorkel  International,  Inc.  (Snorkel).  The  consolidated  financial
         statements  include the  accounts  of the Company and its  wholly-owned
         subsidiaries.  All  significant  intercompany  transactions  have  been
         eliminated.

         On  September  30,  1996,  OmniQuip's  Board  of  Directors  authorized
         OmniQuip  to split its  shares  of  common  stock at a rate of 10 to 1,
         thereby  increasing  issued and  outstanding  shares from  1,000,000 to
         10,000,000.  On  February  19,  1997,  OmniQuip's  Board  of  Directors
         authorized  OmniQuip to further  split its shares at a rate of 1.125 to
         1, thereby  increasing issued and outstanding shares from 10,000,000 to
         11,250,000.  All  shares  and per  share  amounts  in the  accompanying
         consolidated  financial statements and notes have been adjusted to give
         retroactive effect to the stock splits.

2.       Initial Public Offering

         On March 21, 1997,  an initial  public  offering  (Offering)  of common
         stock of OmniQuip  International,  Inc.  (OmniQuip  or the Company) was
         completed.  The  Company  sold  3,000,000  newly  issued  shares  at an
         offering  price of $14.00 per share,  less  underwriting  discounts and
         commissions.  The net  proceeds to the Company of $37,516  were used to
         repay a portion of the Company's outstanding indebtedness.  Pursuant to
         the Offering,  Harbour Group  Investments  III, L.P. (HGI III, L.P.), a
         significant  shareholder  of the Company,  and an affiliate of HGI III,
         L.P. sold an  additional  5,524,200  and 675,800  shares,  respectively
         (including a total of  1,200,000  shares  related to an  over-allotment
         option),   at  $14.00  per  share,  less  underwriting   discounts  and
         commissions.  The net  proceeds  of  approximately  $72,312 and $8,846,
         respectively,  therefrom  were paid  directly to HGI III,  L.P.  and an
         affiliate of HGI III, L.P.

3.       Secondary Public Offering

         On March 11, 1998, a secondary  public  offering of the common stock of
         the Company became  effective,  in which HGI III, L.P. and an affiliate
         sold an aggregate  of  3,600,000  shares of common stock at an offering
         price of $25.50 per share, less underwriting discounts and commissions.
         No proceeds  from the  secondary  public  offering were received by the
         Company.

4.       Acquisitions

         The  following  table  summarizes  certain  information  regarding  the
         Company's acquisitions during the past three years:

         Date                   Name                         Business
         ----                   ----                         --------
    August 16, 1995     TRAK International, Inc.     Manufacturer of telescopic
                                                     material handlers and
                                                     skid steer loaders
    August 15, 1996     Lull Industries, Inc.        Manufacturer of telescopic
                                                     material handlers
   November 17, 1997    Snorkel Division of Figgie   Manufacturer of aerial work
                        International Inc.           platforms

         During the past three years,  the Company has made  acquisitions  which
         have significantly  expanded its product lines. These acquisitions were
         each accounted for using the purchase method of accounting and

                                       31

<PAGE>

OMNIQUIP INTERNATIONAL, INC.
Notes to Consolidated Financial Statements
September 30, 1998
(Dollars in thousands, except per share data)
--------------------------------------------------------------------------------

         financed primarily through bank borrowings, resulting in an increase in
         the Company's  outstanding debt. Results of operations of each acquired
         company  have been  included in the  Company's  consolidated  financial
         statements  from the date of  acquisition.  The purchase  price of each
         acquisition  was  allocated  to the  assets  acquired  and  liabilities
         assumed based on their estimated fair value at the date of acquisition.
         The  excess of  purchase  price  over the  estimated  fair value of net
         assets acquired was, in each instance, recorded as goodwill.

         The purchase price for Lull and Snorkel were allocated as follows:

                                                        Lull          Snorkel
                                                 --------------- ---------------

         Accounts receivable, net                       $  7,572        $ 15,801
         Inventories                                      11,232          30,263
         Prepaid expenses and other current assets         1,937           3,234
         Property, plant and equipment                     7,050          18,924
         Goodwill                                         55,841          57,518
         Accounts payable                                (7,392)        (12,295)
         Accrued liabilities                             (7,233)        (11,334)
                                                 --------------- ---------------

                                                        $ 69,007       $ 102,111
                                                 --------------- ---------------

         The following table sets forth pro forma information for the Company as
         if the acquisition of Snorkel had taken place on October 1, 1996 (after
         giving  effect to certain pro forma  adjustments  and including the pro
         forma effects of the Offering).  This information is unaudited and does
         not purport to represent  actual  revenue,  net income and earnings per
         share had the acquisition and the Offering actually occurred on October
         1, 1996.

<TABLE>
<CAPTION>
                                                                                 PRO FORMA INFORMATION
                                                                                      (UNAUDITED)
                                                                               FOR THE FISCAL YEAR ENDED
                                                                                     SEPTEMBER 30,
                                                                                 1998             1997
                                                                             --------------   --------------
         <S>                                                                 <C>               <C>

         Net sales                                                               $ 471,545        $ 421,345
         Income before extraordinary loss                                           26,473           27,320
         Diluted earnings per common share before extraordinary loss                  1.84             1.92

</TABLE>

         Under the TRAK acquisition agreement,  the purchase price was increased
         for orders received from the U.S. Army under contracts for the delivery
         of rough terrain telescopic material handlers (the ATLAS Program) for a
         period of five  years  from  August 17,  1995.  Amounts  paid to TRAK's
         former  owners  totaling  $1,998  have  been  reflected  as  additional
         goodwill in the  accompanying  consolidated  financial  statements.  No
         further payments under the earn-out  provisions of the TRAK acquisition
         agreement will be made to the former TRAK owners.

                                       32

<PAGE>

OMNIQUIP INTERNATIONAL, INC.
Notes to Consolidated Financial Statements
September 30, 1998
(Dollars in thousands, except per share data)
--------------------------------------------------------------------------------

         Under the Snorkel  acquisition  agreement,  the  purchase  price may be
         increased by up to $50,000  based on Snorkel's  net sales between April
         1,  1998  and  March  31,  1999;   such   additional   purchase   price
         consideration, which is required to be paid in May 1999, is expected to
         result in additional goodwill for financial  reporting purposes.  Based
         on the  performance of Snorkel since April 1, 1998, the Company expects
         this payment to be material and intends to finance such payment through
         an increase in the existing  credit  facility.  Such an increase in the
         credit  facility  would be  subject to  approval  by the banks and will
         likely result in a higher interest rate.

5.       Summary of Significant Accounting Policies

         The accounting policies utilized by OmniQuip require management to make
         estimates and  assumptions  that affect the reported  amounts of assets
         and  liabilities  at the  date  of the  financial  statements  and  the
         reported amounts of revenues and expenses during the reporting  period.
         Actual  amounts  could  differ from those  estimates.  The  significant
         accounting policies followed by OmniQuip are described below and are in
         conformity with generally accepted accounting principles.

         Business
         The Company is principally engaged in the manufacture and sale of rough
         terrain telescopic  material  handlers,  aerial work platforms and skid
         steer loaders to commercial  customers,  national rental fleets and the
         U.S. Government.

         U.S. Army contract
         The Company  was  awarded a contract  to serve as the sole  supplier of
         ATLAS,  a telescopic  material  handler,  for the U.S. Army and related
         entities.  The Company shipments under the contract commenced in fiscal
         1997.  As  discussed  in Note 4, the  purchase  price for TRAK has been
         adjusted for orders received under the contract.

         Revenue recognition
         Revenue is recognized upon shipment to the customer.  Costs and related
         expenses to  manufacture  the  products  are recorded as costs of sales
         when the related revenue is recognized.

         Foreign currency translation
         The accounts of the Company's  foreign  subsidiaries  are maintained in
         their  respective  local  currencies.   The  accompanying  consolidated
         financial statements have been translated and adjusted to reflect U.S.
         dollars on the basis presented below.

         Assets and  liabilities  are translated  into U.S.  dollars at year-end
         exchange  rates.  Income and expense  items are  translated  at average
         exchange rates prevailing during the period. Adjustments resulting from
         the process of translating the  consolidated  amounts into U.S. dollars
         are accumulated in a separate translation adjustment account,  included
         in stockholders'  equity.  Common stock and additional  paid-in capital
         are translated at the historical  U.S.  dollar  equivalent in effect at
         the date of acquisition.  Foreign currency transaction gains and losses
         are included in earnings  currently.  The foreign currency  transaction
         gains  and  losses  for the year  ended  September  30,  1998  were not
         material.

         Cash and cash equivalents
         For purposes of the  consolidated  statement of cash flows, the Company
         considers all highly liquid  investments  with an original  maturity of
         three months or less to be cash equivalents.

                                       33


<PAGE>

OMNIQUIP INTERNATIONAL, INC.
Notes to Consolidated Financial Statements
September 30, 1998
(Dollars in thousands, except per share data)
--------------------------------------------------------------------------------

         Relationships with suppliers
         The Company purchases several of its key component parts primarily from
         specific  suppliers.  The  Company  believes  that the  supply of these
         components and the number of alternative suppliers are adequate.

         Inventories
         Inventories  are  stated  at the  lower of cost,  determined  using the
         first-in,  first-out  (FIFO) method,  or market.  Obsolete or unsalable
         inventories are reflected at their estimated realizable values.

         Inventories  relating to the U.S.  Army  contract  are stated at actual
         production   costs,   including   manufacturing   overhead  and  direct
         engineering  and tooling costs.  The contract  costs  reimbursed by the
         U.S. Army are considered progress payments and have been offset against
         inventories. Title to all inventories related to the U.S. Army contract
         for which progress payments have been received vests with the U.S.
         Army.

         Property, plant and equipment
         Property,  plant and  equipment  was recorded at estimated  fair market
         value under the purchase  method of  accounting  as of the  acquisition
         dates for TRAK,  Lull and Snorkel as described in Note 4.  Additions to
         property,  plant and equipment  subsequent to the acquisition dates are
         recorded  at cost.  Depreciation  is provided  using the  straight-line
         method over the  estimated  useful lives of the assets which range from
         three to thirty-nine years.

         Expenditures for repairs, maintenance and minor renewals are charged to
         income as incurred.  Expenditures  which improve an asset or extend its
         estimated useful life are  capitalized.  When properties are retired or
         otherwise  disposed of, the related cost and  accumulated  depreciation
         are  removed  from the  accounts  and any gain or loss is  included  in
         income.

         Goodwill
         Goodwill resulting from the acquisitions  described in Note 4 is stated
         at cost and is being amortized on a straight-line  basis over 40 years.
         Amortization  expense for the fiscal  years ended  September  30, 1998,
         1997 and 1996 was approximately $2,952, $1,664 and $400,  respectively.
         Accumulated  amortization  totaled  $5,043 and $2,091 at September  30,
         1998 and 1997, respectively. The Company assesses the carrying value of
         goodwill for  impairment  whenever  events or changes in  circumstances
         indicate that the carrying  amount may not be  recoverable  based on an
         analysis of future  expected cash flows from the underlying  operations
         of the Company.  Management  believes that there has been no impairment
         at September 30, 1998.

         Other noncurrent assets
         Expenses   associated  with  the  issuance  of  debt   instruments  are
         capitalized by the Company and amortized  over the respective  terms of
         the debt  instruments.  Net deferred  financing costs included in other
         assets  at   September   30,  1998  and  1997  were  $1,522  and  $941,
         respectively.

         Research and development costs
         Research and development costs are expensed as incurred and included in
         selling,  general  and  administrative  expenses  in  the  accompanying
         consolidated   statement  of  income.   Such  costs   incurred  in  the
         development  of new products or  significant  improvements  to existing
         products totaled approximately $5,130, $1,996 and $1,572 for the fiscal
         years ended September 30, 1998, 1997 and 1996, respectively.

                                       34

<PAGE>

OMNIQUIP INTERNATIONAL, INC.
Notes to Consolidated Financial Statements
September 30, 1998
(Dollars in thousands, except per share data)
--------------------------------------------------------------------------------

         Warranty costs
         The  Company  provides,  by a current  charge to  income,  an amount it
         estimates will be necessary to cover future  warranty  obligations  for
         products  sold during the year.  The Company also provides for specific
         warranty obligations as necessary and appropriate.

         Income taxes
         The Company accounts for income taxes under the provisions of Statement
         of Financial Accounting  Standards No. 109 (SFAS 109),  "Accounting for
         Income Taxes,"  requiring the use of the liability method of accounting
         for  income  taxes.  The  current or  deferred  tax  consequences  of a
         transaction are measured by applying the provisions of enacted tax laws
         to determine the amount of taxes payable  currently or in future years.
         Deferred  income taxes are provided for temporary  differences  between
         the  income  tax bases of assets and  liabilities,  and their  carrying
         amounts for financial reporting purposes.

         Earnings per share
         In February  1997,  the  Financial  Accounting  Standards  Board issued
         Statement  of  Financial  Accounting  Standards  No.  128  (SFAS  128),
         "Earnings  Per  Share,"  which  changed  the method of  computation  of
         earnings per share (EPS). SFAS 128, which was adopted by the Company in
         fiscal  1998,  requires the  computation  of Basic EPS and Diluted EPS.
         Basic EPS is based on the weighted average number of outstanding common
         shares during the period but does not consider dilution for potentially
         dilutive securities. Diluted EPS reflects the dilutive potential common
         shares  consisting  of certain  shares  subject to stock  options.  The
         dilutive potential common shares arising from the effect of outstanding
         stock  options  were  computed  using the  treasury  stock  method,  if
         dilutive.  Earnings  per  share  for  fiscal  1997 and 1996  have  been
         restated  in  accordance  with  SFAS  128.  See Note 17 for  additional
         information.

         Fair value of financial instruments
         The Company records all financial instruments,  including cash and cash
         equivalents,  accounts receivable, accounts payable, other accruals and
         debt, at cost which approximates fair value.

         Employee stock-based compensation
         The Company  accounts for employee  stock  options in  accordance  with
         Accounting  Principles  Board No. 25,  "Accounting  for Stock Issued to
         Employees"  (APB 25).  Under APB 25, the Company  applies the intrinsic
         value method of accounting.  For employee  stock options  accounted for
         using the intrinsic value method, no compensation expense is recognized
         because the options  are  granted  with an exercise  price equal to the
         market value of the stock on the date of grant.

         During  fiscal 1997,  Statement of Financial  Accounting  Standards No.
         123,  "Accounting  for  Stock-Based  Compensation"  (SFAS 123),  became
         effective  for the Company.  SFAS 123  prescribed  the  recognition  of
         compensation expense based on the fair value of options or stock awards
         determined on the date of grant.  However, SFAS 123 allows companies to
         continue  to apply  the  valuation  methods  set  forth in APB 25.  For
         companies that continue to apply the valuation methods set forth in APB
         25,  SFAS 123  mandates  certain pro forma  disclosures  as if the fair
         value method had been utilized. See Note 10 for additional discussion.

                                       35

<PAGE>
OMNIQUIP INTERNATIONAL, INC.
Notes to Consolidated Financial Statements
September 30, 1998
(Dollars in thousands, except per share data)
--------------------------------------------------------------------------------

6.       Financing

         Long-term debt consists of the following:

<TABLE>
<CAPTION>
                                                                                          SEPTEMBER 30,
                                                                                      1998             1997
                                                                                 -------------    ------------
         <S>                                                                     <C>              <C>    
         Revolving  line of credit - principal  due November 17, 2004;  interest
         due  quarterly  at either  prime,  or LIBOR,  plus an  additional  rate
         determined from a pricing grid based on the Company's leverage
         ratio; secured by substantially all assets of the Company                  $ 24,000         $   ---

         Term loan -  principal  due in  quarterly  installments  with the final
         payment due on November  17,  2004;  interest  due  quarterly at either
         prime, or LIBOR, plus an additional rate determined from a pricing grid
         based on the Company's leverage ratio; secured by substantially
         all assets of the Company                                                   114,000             ---

         Revolving line of credit - principal due August 16, 2003;  interest due
         monthly at either  LIBOR plus 2.25% or the bank's  corporate  base rate
         plus 1.0%; secured by substantially all assets of the Company;
         repaid November 17, 1997                                                        ---           3,109

         Term loan - principal  due in  installments  with the final payment due
         August 16, 2003; interest due monthly at either LIBOR plus 2.50% or the
         bank's  corporate base rate plus 1.25%;  secured by  substantially  all
         assets of the Company; $15,000 repaid in 1997 with proceeds from
         the Offering; balance repaid on November 17, 1997                               ---          31,125
                                                                               --------------    ------------
                                                                                     138,000          34,234
         Less - Current portion of long-term debt                                     13,750           8,625
                                                                               --------------    ------------

                                                                                   $ 124,250        $ 25,609
                                                                               --------------    ------------
</TABLE>

         During  November 1997, in connection  with the  acquisition of Snorkel,
         the Company  entered into a new credit facility which replaced the Loan
         and Security Agreement  described below. The new agreement provides for
         a $165,000 credit  facility  consisting of a $40,000  revolving  credit
         facility and a $125,000  term loan.  The term loan  requires  quarterly
         principal payments ranging from $2,500 to $6,250 commencing on February
         28, 1998 with final maturity on November 17, 2004. Borrowings under the
         agreement  bear interest at prime,  or LIBOR,  plus an additional  rate
         (ranging  from 0.0% to 1.125%) based on the  Company's  leverage  ratio
         (debt/EBITDA).  At  September  30,  1998,  the  interest  rate  on  the
         Company's  borrowings  ranged  from 6.4% to 8.3%.  Amounts  outstanding
         under this credit facility  totaled  $138,000 at September 30, 1998. In
         addition,  the Company had approximately $200 in outstanding letters of
         credit and had unused borrowing capacity of approximately $15,800 under
         this facility.

         In conjunction with entering into the new credit facility,  the Company
         recognized an extraordinary  loss in November 1997 of $545 attributable
         to the write-off of $916 unamortized  deferred financing fees, net of a
         related $371 tax benefit.

                                       36

<PAGE>
OMNIQUIP INTERNATIONAL, INC.
Notes to Consolidated Financial Statements
September 30, 1998
(Dollars in thousands, except per share data)
--------------------------------------------------------------------------------

         The prior Loan and Security  Agreement provided for a revolving line of
         credit  facility  and two term  loans.  The  revolving  line of  credit
         facility  provided for  borrowings  of up to the lesser of $25,000 or a
         borrowing base calculated based on percentages of eligible  receivables
         and  inventories.  Borrowings under this line of credit were due August
         16, 2003 and bore  interest  either at the bank's  corporate  base rate
         plus 1.00% or LIBOR plus 2.25%. Borrowings under the term loan were due
         in quarterly  installments which commenced in October 1996 with a final
         payment in August 2003 and bore interest either at the bank's corporate
         base rate plus 1.25% or LIBOR plus 2.25%. As discussed  above, the Loan
         and Security Agreement was replaced in November 1997.

         In  connection  with the repayment of certain debt with proceeds of the
         Offering  described in Note 2, in fiscal 1997, the Company recognized a
         $782 after-tax  extraordinary  loss resulting from prepayment fees paid
         on certain debt and the  write-off of applicable  capitalized  deferred
         financing costs.

         The Company has entered into an interest rate swap  agreement to reduce
         the impact of changes in interest  rates on its floating  rate debt. At
         September  30,  1998,  the  interest  rate swap  agreement  had a total
         notional  principal  amount  of  $67,500.   This  agreement  fixes  the
         Company's  interest rate on $67,500 of its debt at 6.24% and matures in
         November 2004.

         The   Company's   borrowing   agreements   contain   restrictions   and
         requirements,   including  limitations  on  dividends,  lease  rentals,
         capital expenditures and investments, new indebtedness,  achievement of
         certain earnings levels,  and maintenance of a minimum fixed charge and
         interest ratios and maximum leverage ratios, among others. At September
         30, 1998, the Company was in compliance with such covenants.

         Maturities of  long-term  debt  for  subsequent  fiscal  years  are  as
         follows:

            1999                                    $ 13,750
            2000                                      15,000
            2001                                      18,750
            2002                                      20,000
            2003                                      20,000
            Thereafter                                50,500
                                                 --------------
                                                    $138,000
                                                 --------------
 
7.       Lease Commitments

         The Company leases certain of its facilities, equipment and automobiles
         under noncancelable lease agreements.  These leases have been accounted
         for as operating leases.

         Minimum  lease  payments for  subsequent  fiscal years under  long-term
         operating leases in effect at September 30, 1998 are as follows:

            1999                                   $  2,992
            2000                                      2,303
            2001                                      1,577
            2002                                      1,226
            2003                                        883
                                                  --------------


                                       37

<PAGE>

OMNIQUIP INTERNATIONAL, INC.
Notes to Consolidated Financial Statements
September 30, 1998
(Dollars in thousands, except per share data)
--------------------------------------------------------------------------------

            Total minimum lease payments           $  8,981
                                                  --------------

         Rent  expense  under all  operating  leases for the fiscal  years ended
         September 30, 1998, 1997 and 1996 was  approximately  $2,757,  $753 and
         $513, respectively.

8.       Income Taxes

         Income before provision for income taxes and  extraordinary  losses was
         taxed under the following jurisdictions:

                                          FOR THE FISCAL YEAR ENDED
                                                SEPTEMBER 30,
                                    1998             1997             1996
                               --------------  ---------------  ----------------

         Domestic              $ 44,435         $ 35,938         $  10,416
         Foreign                  1,455              ---               ---
                               --------------  ---------------  ----------------

                               $ 45,890         $ 35,938         $  10,416
                               --------------  ---------------  ----------------

         The provision for income taxes,  including tax benefits associated with
         extraordinary charges in 1998, 1997 and 1996, is summarized as follows:

                                          FOR THE FISCAL YEAR ENDED
                                                SEPTEMBER 30,
                                    1998             1997             1996
                               --------------  ---------------  ----------------

          Current:
            Federal            $ 13,329         $ 11,206          $  3,890
            State                 2,341            2,025               682
            Foreign                 523              ---               ---
                               --------------  ---------------  ----------------
               Total current     16,193           13,231             4,572
                               --------------  ---------------  ----------------
         Deferred:

            Federal               1,694              655             (661)
            State                   289              149              (51)
                               --------------  ---------------  ----------------
               Total deferred     1,983              804             (712)
                               --------------  ---------------  ----------------

         Provision for         $ 18,176         $ 14,035          $  3,860
          income taxes         --------------  ---------------  ----------------


                                       38

<PAGE>

OMNIQUIP INTERNATIONAL, INC.
Notes to Consolidated Financial Statements
September 30, 1998
(Dollars in thousands, except per share data)
--------------------------------------------------------------------------------

         Deferred taxes are comprised of the following:
<TABLE>
<CAPTION>
                                                                SEPTEMBER 30,
                                                            1998             1997

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

         Deferred tax assets:

            Accruals and other reserves                      $  5,069         $  3,959
            Inventories                                         2,017            1,799
            Other                                                 935               69
                                                        --------------  ---------------
               Gross deferred tax assets                        8,021            5,827
                                                        --------------  ---------------
         Deferred tax liabilities:
            Property, plant and equipment                     (1,355)          (1,121)
            Goodwill amortization                             (2,049)          (1,125)
            Other                                                  36            (292)
                                                        --------------  ---------------
                                                              (3,368)          (2,538)
                                                        --------------  ---------------
         Net deferred tax asset                              $  4,653         $  3,289
                                                        --------------  ---------------

         Current deferred tax asset                          $  8,021         $  5,270
         Long-term deferred tax liability                     (3,368)          (1,981)
                                                        --------------  ---------------
         Net deferred tax asset                              $  4,653         $  3,289
                                                        --------------  ---------------
</TABLE>
         The income tax provision differs from the amount of expense  determined
         by applying the applicable  U.S.  statutory  federal income tax rate to
         pre-tax results as a result of the following differences for the fiscal
         years ended:

<TABLE>
<CAPTION>
                                                                    FOR THE FISCAL YEAR ENDED
                                                                            SEPTEMBER 30,
                                                               1998             1997             1996
                                                           --------------   --------------   --------------
         <S>                                               <C>              <C>              <C>
         Statutory rate                                         $ 15,741         $ 12,122         $  3,445
         Non-temporary differences:
            State tax provision, net                               1,799            1,342              169
            Other                                                    636              571              246
                                                           --------------   --------------   --------------
               Total provision                                  $ 18,176         $ 14,035         $  3,860
                                                           --------------   --------------   --------------
</TABLE>

9.       Retirement plans and related matters

         The Company offers all full-time non-union employees who have completed
         six months of service a retirement savings plan under Section 401(k) of
         the Internal  Revenue Code. The Company also offers all union employees
         who have  completed 30 days of service a retirement  savings plan under
         Section 401(k) of

                                       39

<PAGE>

OMNIQUIP INTERNATIONAL, INC.
Notes to Consolidated Financial Statements
September 30, 1998
(Dollars in thousands, except per share data)
--------------------------------------------------------------------------------

         the Internal  Revenue  Code.  For the fiscal years ended  September 30,
         1998, 1997 and 1996,  Company  contributions  totaled $1,317,  $666 and
         $310, respectively.

         The Company offers an incentive program to all salaried employees based
         upon a  formula  related  to the  Company's  operating  results  and an
         incentive  program to union  employees  based upon a formula related to
         productivity improvements.  Prior to October 1996, certain participants
         in the salaried program were allowed to defer a portion of their award.
         At September 30, 1998 and 1997, the Company had accrued  liabilities of
         $1,383 and $1,759,  respectively,  relative to such incentive programs.
         For the fiscal years ended September 30, 1998, 1997 and 1996,  expenses
         relating to these plans were $1,486, $1,785 and $875, respectively.

10.      Stock Option Plans

         The Company has two stock option plans:  the 1996  Long-Term  Incentive
         Plan  and the 1996  Directors  Non-Qualified  Stock  Option  Plan  (the
         Directors  Plan). A summary of the status of the Company's stock option
         plans as of  September  30,  1998 and 1997 and the  changes  during the
         fiscal years then ended is presented below:
<TABLE>
<CAPTION>

                                                              1998                             1997
                                                 -------------------------------  -------------------------------
                                                                      Weighted-                       Weighted-
                                                                       average                         average
                                                                      exercise                        exercise
                                                    Shares              price         Shares           price
                                                 --------------  ---------------  --------------  ---------------
         <S>                                     <C>             <C>              <C>             <C>
         Outstanding at beginning of year              438,752           $13.98               -                -
         Granted                                       440,500           $15.97         448,752           $13.87
         Exercised                                           -                -               -                -
         Forfeited                                    (62,002)           $16.85        (10,000)           $14.00
                                                 --------------                   --------------
         Outstanding at end of year                    817,250           $14.84         438,752           $13.98
                                                 ==============                   ==============
         Exercisable at end of year                          -                                -
                                                 ==============                   ==============

</TABLE>
         No options were granted as of September 30, 1996.

         The 1996  Long-Term  Incentive  Plan  provides for the granting of four
         types  of  awards  on  a  stand-alone,  combination  or  tandem  basis,
         including   incentive  stock  options,   non-qualified  stock  options,
         restricted  shares  and  performance  stock  awards,  to the  Company's
         executive  officers and key employees.  The incentive stock option plan
         allows  such  employees  to purchase  shares of common  stock at prices
         equal  to the fair  market  value  of the  stock on the date of  grant.
         Options  to  purchase  up to  1,600,000  shares of common  stock may be
         granted under the incentive stock option plan.  Options  outstanding at
         September  30, 1998  totaling  732,250  entitle the holders to purchase
         common  stock at prices  ranging  between  $10.75 and $24.50 per share.
         Options  become  exercisable  with respect to  one-fourth of the shares
         covered thereby on each anniversary of the date of grant, commencing on
         the second  anniversary of the date granted.  The right to exercise the
         options expires 10 years from the date of grant or earlier if an option
         holder  ceases to be  employed  by the  Company.  During the year ended
         September 30, 1998, 20,000 shares of restricted stock were granted.  No
         performance  stock awards have been granted by the Company at September
         30, 1998.

                                       40
<PAGE>

OMNIQUIP INTERNATIONAL, INC.
Notes to Consolidated Financial Statements
September 30, 1998
(Dollars in thousands, except per share data)
--------------------------------------------------------------------------------

         The  Directors  Plan  provides  for  the  granting  of  options  to the
         Company's directors,  who are not employees of the Company, to purchase
         share of common  stock at prices  equal to the fair market value of the
         stock on the date of grant. Options to purchase up to 250,000 shares of
         common  stock  may  be  granted  under  the  Directors  Plan.   Options
         outstanding  at September 30, 1998 totaling  85,000 entitle the holders
         to purchase  common stock at prices  ranging  between $13.25 and $14.00
         per share.  Options become exercisable over a five-year period from the
         date of grant.  All options  granted under the Directors Plan expire 10
         years from the date of grant.

         The  following  table  summarizes  information  for  options  currently
         outstanding and exercisable at September 30, 1998:

<TABLE>
<CAPTION>
                                          Options outstanding                       Options exercisable
                            ------------------------------------------------   -------------------------------
                                                Weighted
                                                average         Weighted                          Weighted
             Range of                          remaining         average                          average
             exercise           Number        contractual       exercise          Number          exercise
              prices         outstanding          life            price         exercisable        price
         -----------------  ---------------  ---------------  --------------   --------------  ---------------
         <S>                <C>              <C>              <C>              <C>             <C>
         $10-13.25                 228,750               10         $ 11.24                -         $  -
         $14-14                    361,750                8         $ 14.00                -            -
         $17-25                    226,750                9         $ 19.81                -            -
                            ---------------                                    --------------
         $10-25                    817,250                9         $ 14.84                -         $  -
                            ---------------                                    --------------

</TABLE>

         In  conjunction  with  the  Offering,  the  Company  adopted  the  1996
         Executive  Stock  Option  Plan  (Executive   Plan)  pursuant  to  which
         non-qualified  stock options were granted to certain existing executive
         shareholders as of the date the registration  statement relating to the
         Offering became effective to acquire an aggregate 562,500 shares of the
         Company's common stock,  subject to adjustment,  by tendering  existing
         common stock in payment thereof. The options were exercised immediately
         after the Offering and the Executive Plan was subsequently  terminated.
         The exercise  price of all options was the current  market price on the
         date of exercise and all options were exercised by exchanging shares of
         previously  owned common stock. The grant and exercise of options under
         the  Executive  Plan did not result in any  increase in the  beneficial
         ownership of common stock by the plan  participants  from the number of
         shares  owned  at the  time of the  Offering.  Under  the  terms of the
         Executive  Plan,  the shares of common  stock  issued  pursuant  to the
         exercise  of the options  became  freely  transferable,  subject to the
         restriction of the  Stockholder  Agreements  with each of the executive
         shareholders,  on the last day of the sixth  full month  following  the
         date of exercise of such options.  The  provisions  of the  Stockholder
         Agreements, which are subject to modification or waiver by the Company,
         generally  permit  the sale of 25% of such  shares  one year  after the
         Offering, an aggregate 50% of such shares two years after the Offering,
         an aggregate 75% of such shares three years after the Offering and 100%
         of such shares four years after the  Offering.  The shares  tendered in
         exercise of options  granted under the Executive Plan were issued under
         promissory notes due in September 2005 as discussed in Note 12.

         Pro forma disclosures
         The Company  applies APB 25 and related  interpretations  in accounting
         for its stock option plans. Accordingly,  no compensation cost has been
         recognized for the stock options  because the options were granted with
         an exercise  price  equal to the stock price on the date of grant.  Had
         compensation costs for the Company's stock option plans been determined
         based on the fair value of the  options on the grant  dates  consistent
         with the  methodology  prescribed by SFAS 123, the Company's net income
         and earnings per 

                                       41

<PAGE>

OMNIQUIP INTERNATIONAL, INC.
Notes to Consolidated Financial Statements
September 30, 1998
(Dollars in thousands, except per share data)
--------------------------------------------------------------------------------

         share would have been reduced to the pro forma amounts indicated below.
         Due to the adoption of the methodology  prescribed by SFAS 123, the pro
         forma  results  shown  below only  reflect  the impact of stock  option
         awards  granted in fiscal 1998 and 1997.  Because  future  stock option
         awards may be granted, the pro forma impact for fiscal 1998 and 1997 is
         not necessarily indicative of the impact in future years.

                                                    FOR THE FISCAL YEAR ENDED
                                                           SEPTEMBER 30,
                                                       1998             1997
                                                 --------------   --------------
         Net income:
            As reported                             $ 26,798         $ 20,600
            Pro forma                               $ 25,828         $ 20,199

         Diluted earnings per common share:
            As reported                             $   1.86          $  1.60
            Pro forma                               $   1.79          $  1.58

         The fair value of the  options  granted  (which is  amortized  over the
         option  vesting  period  in  determining  the  pro  forma  impact),  is
         estimated  on the  date  of  grant  using  the  Black-Scholes  multiple
         option-pricing model with the following weighted average assumptions:

                                                    FOR THE FISCAL YEAR ENDED
                                                           SEPTEMBER 30,
                                                       1998             1997
                                                 --------------   --------------

         Expected life of options                    6 years           6 years

         Risk-free interest rates               4.64 - 5.84%      6.29 - 6.85%

         Expected volatility of stock                    57%               65%

         Expected dividend yield                   0.2%-0.3%              0.1%

         The weighted  average fair value of options  granted  during the fiscal
         years ended September 30, 1998 and 1997, was $8.06 and $8.99 per share,
         respectively.

11.      Postretirement benefits

         The Company  has  adopted the  provisions  of  Statement  of  Financial
         Accounting Standards No. 106, "Employer's Accounting for Postretirement
         Benefits  Other  Than  Pensions"  (OPEB  or SFAS  106).  This  standard
         requires recognition of the cost of providing  postretirement  benefits
         during an employee's period of service.

         The  Company  provides  health  care and life  insurance  benefits  for
         certain  employees who retired prior to November 13, 1987 (less than 30
         retirees at September 30, 1998).  Management plans to fund the premiums
         as incurred,  net of reimbursements  received by plan participants.  At
         September 30, 1998 and 1997,

                                       42

<PAGE>

OMNIQUIP INTERNATIONAL, INC.
Notes to Consolidated Financial Statements
September 30, 1998
(Dollars in thousands, except per share data)
--------------------------------------------------------------------------------

         respectively,  the Company had a $418 and $422  accrued  postretirement
         benefit obligation, which is included in "other noncurrent liabilities,
         net"  in the  accompanying  financial  statements.  There  are no  plan
         assets.  For  measurement  purposes,  a 7.5%  and 8.5%  annual  rate of
         increase  in  health  care  premiums  was  assumed  for 1998 and  1997,
         respectively;  this rate was assumed to decrease 1% per year to 5.5% in
         2000 and remain at that level thereafter. The weighted average discount
         rate  used  to  determine  the   accumulated   postretirement   benefit
         obligation   was  7.0%  and  7.5%  at  September  30,  1998  and  1997,
         respectively.  The obligation  was calculated  utilizing the 1983 group
         annuity mortality tables.

         The  annual  periodic  postretirement  benefit  cost for the plan years
         beginning July 1, 1998, July 1, 1997 and July 1, 1996 is immaterial.

12.      Related parties

         Under terms of a management consulting and advisory services agreement,
         an affiliate of HGI III, L.P. charges the Company for direct management
         and  administrative  services  provided to the Company based on actual,
         direct  costs for such  services.  Charges of $141,  $601 and $668 were
         recorded by the Company  during the fiscal  years ended  September  30,
         1998, 1997 and 1996, respectively.

         Under terms of a management consulting and advisory services agreement,
         the Company has paid fees  totaling  $1,224 to  affiliates  of HGI III,
         L.P. in consideration of services provided in identifying,  negotiating
         and  consummating  the  acquisitions  of  TRAK,  Lull and  Snorkel  (as
         described in Note 4); such amount has been  capitalized  as acquisition
         costs and is included in goodwill.

         In periods  prior to the  Offering  in March 1997,  certain  members of
         management  have  purchased  shares  of the  Company's  stock at prices
         determined by the Board of Directors.  The purchase price of the shares
         has been financed by recourse  promissory  notes payable to the Company
         with the  shares  pledged  as  security.  Such  notes are  included  in
         stockholders'  equity  in  the  accompanying   consolidated   financial
         statements.

13.      Customer financing arrangements

         The  Company  has  financing   arrangements  with  certain  third-party
         financing  institutions  to  facilitate  dealer  purchases of equipment
         under  floor  plan  and  rental  fleet   arrangements.   The  aggregate
         outstanding loan balance on a consolidated basis under these agreements
         at  September  30,  1998 and 1997  approximated  $62,351  and  $74,994,
         respectively.  Under  the  Company's  agreements,  the  Company  either
         provides a back-up  guarantee of a dealer's credit or an undertaking to
         repurchase equipment at a discounted price at specified times and under
         specified  circumstances.  The Company's  actual  exposure  under these
         financing  arrangements is  significantly  less than the nominal amount
         outstanding.  Aggregate losses under substantially all of the Company's
         guarantee  obligations  to third  party  lenders  with  respect  to the
         Company's  dealers  in each of the  calendar  years  1998  and 1997 are
         limited to the greater of $1,500 or 5% of the outstanding  loan balance
         at the previous calendar year end (approximately $55,000 and $47,157 at
         December 31, 1997 and 1996, respectively).

         The Company  maintains a reserve for potential  repurchases of loans in
         default under the floor plan arrangements described above. This reserve
         is included in other current liabilities and totaled approximately $909
         and $949 at September  30, 1998 and 1997,  respectively.  Historically,
         losses under the repurchase  provisions of the floor plan  arrangements
         have not been material and have been within management's expectations.

                                       43

<PAGE>

OMNIQUIP INTERNATIONAL, INC.
Notes to Consolidated Financial Statements
September 30, 1998
(Dollars in thousands, except per share data)
--------------------------------------------------------------------------------

         In conjunction with these floor plan  arrangements,  the Company incurs
         dealer-related  financing charges at varying rates for a maximum period
         of six months.  The financing  charges  incurred by the Company for the
         fiscal  years  ended   September  30,  1998,  1997  and  1996  for  all
         outstanding customer financing  arrangements totaled $2,597, $2,259 and
         $1,981, respectively.

14.      Concentrations of credit

         The  Company  principally  sells its  products  through a  distribution
         network and  through  national  rental  fleets.  The  Company  performs
         ongoing  credit  evaluations of its  customers.  The Company  maintains
         reserves for potential credit losses and historically  such losses have
         been within  management's  expectations.  Including  the effects of the
         consolidation of certain of the Company's  customers in fiscal 1998, at
         September  30, 1998 and 1997,  the  Company's  five  largest  customers
         represented   approximately  29%  and  17%,   respectively,   of  trade
         receivables.  In addition, sales to such customers for the fiscal years
         ended September 30, 1998, 1997 and 1996  approximated 46%, 22% and 21%,
         respectively,  of the  Company's  net sales.  In the fiscal  year ended
         September 30, 1998,  two  individual  customers each accounted for more
         than 10% of net sales. No individual  customer  accounted for more than
         10% of net sales for the fiscal  years  ended  September  30,  1997 and
         1996.

15.      Contingencies

         The  Company  is  included  in  various  litigation  consisting  almost
         entirely of product and general  liability claims arising in the normal
         course of business.  The Company maintains  insurance policies relative
         to product and general  liability claims and has provided  reserves for
         the estimated cost of the self-insured  retention;  accordingly,  these
         actions, when ultimately concluded, are not expected to have a material
         adverse  effect on the  financial  position,  cash  flows or results of
         operations of the Company.

16.      Supplemental balance sheet information

                                                         September 30,
                                                     1998              1997
                                                --------------    --------------
         Accounts receivable:
            Trade receivables                      $ 67,610          $ 22,040
            Less allowance for doubtful accounts    (1,295)             (504)
            Other receivables                           265             1,153
                                                --------------    --------------
                                                   $ 66,580          $ 22,689
                                                ==============    ==============


                                                         September 30,
                                                     1998              1997
                                                --------------    --------------
         Inventories:
            Finished goods                        $ 15,651          $  6,090
            Work in process                         11,751             3,694
            Raw materials                           43,521            18,313
            Unbilled government contract costs         142             2,859
                                                --------------    --------------
                                                  $ 71,065          $ 30,956
                                                ==============    ==============

                                       44
<PAGE>

OMNIQUIP INTERNATIONAL, INC.
Notes to Consolidated Financial Statements
September 30, 1998
(Dollars in thousands, except per share data)
--------------------------------------------------------------------------------


         Prepaid expenses and other current assets:
            Deferred income taxes                 $  8,021          $  5,270
            Other                                    1,999             1,370
                                                --------------    --------------
                                                  $ 10,020          $  6,640
                                                ==============    ==============

         Property, plant and equipment:
            Machinery and equipment               $ 35,040          $ 11,265
            Buildings and building improvements     11,814             7,465
            Land and land improvements               1,010               851
            Construction in progress                 1,294               763
                                                --------------    --------------
            Total property, plant and equipment,                    
               at cost                              49,158            20,344
            Less:  accumulated depreciation         (7,783)           (3,214)
                                                --------------    --------------
                                                  $ 41,375          $ 17,130
                                                ==============    ==============

         Accrued liabilities:
          Accrued employee compensation and benefits,
           including related taxes                $  4,648          $  2,314
          Accrued customer rebates                   8,747             5,043
          Other accrued warranty                     6,470             3,306
          Accrued incentive compensation             1,383             1,571
          Product liability reserves                 1,639             1,118
          Accrued income taxes                       4,072
          Other                                      4,914             3,478
                                               --------------     --------------
                                                  $ 31,873          $ 16,830
                                               ==============     ==============

17.      Earnings per share of common stock

         In accordance with SFAS 128, the following  represents  reconciliations
         of  income  before  extraordinary  loss  and  weighted  average  shares
         outstanding between basic and diluted earnings per share for the fiscal
         years ended September 30, 1998, 1997 and 1996:

<TABLE>
<CAPTION>
                                                      For the fiscal year ended September 30, (in thousands)
                                                 1998                          1997                          1996
                                        Income before                 Income before                Income before
                                        extraordinary                 extraordinary                extraordinary
                                            loss        Shares            loss         Shares           loss        Shares
         <S>                            <C>            <C>            <C>              <C>          <C>             <C>
         Basic                                $ 27,343    14,261             $ 21,382    12,845            $ 6,356    11,250
         Effect of dilutive securities:
            Stock options                            -       131                    -        60                  -         -
                                       --------------------------   ----------------------------  ---------------------------
         Diluted                              $ 27,343    14,392             $ 21,382    12,905            $ 6,356    11,250
                                       ==========================   ============================  ===========================

</TABLE>

                                       45

<PAGE>

OMNIQUIP INTERNATIONAL, INC.
Notes to Consolidated Financial Statements
September 30, 1998
(Dollars in thousands, except per share data)
--------------------------------------------------------------------------------

18.      Quarterly financial data (unaudited)

         Summarized, unaudited  quarterly  financial data for fiscal 1998,  1997
         and 1996 appears below:

<TABLE>
<CAPTION>
                                                                             For the fiscal year ended
                                                                                     September 30,
                                                                        1998            1997            1996
                                                                    --------------  --------------  --------------
         <S>                                                        <C>             <C>             <C>
         Net Sales
            First Quarter                                                $ 84,575        $ 59,166        $ 23,487
            Second Quarter                                                119,378          63,452          27,578
            Third Quarter                                                 119,654          74,708          30,449
            Fourth Quarter                                                132,046          66,887          43,347
                                                                    --------------  --------------  --------------
                                                                        $ 455,653       $ 264,213       $ 124,861
                                                                    =============   ==============  ==============

         Gross Profit
            First Quarter                                                $ 21,142        $ 15,279        $  6,156
            Second Quarter                                                 27,493          17,107           7,234
            Third Quarter                                                  27,496          20,413           7,745
            Fourth Quarter                                                 29,938          19,144          11,038
                                                                    --------------  --------------  --------------
                                                                        $ 106,069        $ 71,943        $ 32,173
                                                                    =============   ==============  ==============

         Net Income
            First Quarter                                                $  4,995        $  3,978         $   963
            Second Quarter                                                  6,899           4,015           1,352
            Third Quarter                                                   6,939           6,643           1,573
            Fourth Quarter                                                  7,965           5,964           2,154
                                                                    --------------  --------------  --------------
                                                                         $ 26,798        $ 20,600        $  6,042
                                                                    =============   ==============  ==============

         Diluted Earnings Per Share
            First Quarter                                                 $  0.35         $  0.35         $  0.09
            Second Quarter                                                   0.48            0.35            0.12
            Third Quarter                                                    0.48            0.46            0.13
            Fourth Quarter                                                   0.56            0.41            0.19

</TABLE>


                                       46

<PAGE>

Item 9.  Changes in and Disagreements with Accountants on Accounting and
         Financial Disclosure.

              None.


                                    PART III

Item 10.  Directors and Executive Officers of the Registrant

              A  definitive  proxy  statement  is  expected to be filed with the
Securities and Exchange  Commission  (the  "Commission")  on or about January 7,
1999.  The  information  required  by this item is set forth  under the  caption
"Election of Directors",  under the caption  "Executive  Officers" and under the
caption  "Section  16(a)  Beneficial  Ownership  Reporting  Compliance"  of  the
definitive  proxy  statement,   which  information  is  incorporated  herein  by
reference thereto.

Item 11.  Executive Compensation

              The  information  required  by this  item is set  forth  under the
caption  "Executive  Compensation"  of the  definitive  proxy  statement,  which
information is incorporated herein by reference thereto.

Item 12.  Security Ownership of Certain Beneficial Owners and Management

              The  information  required  by this  item is set  forth  under the
caption "Security  Ownership of Certain Beneficial Owners and Management" of the
definitive  proxy  statement,   which  information  is  incorporated  herein  by
reference thereto.

Item 13.  Certain Relationships and Related Transactions

              The  information  required  by this  item is set  forth  under the
caption  "Certain  Transactions"  of  the  definitive  proxy  statement,   which
information is incorporated herein by reference thereto.








                                       47
<PAGE>

                                     PART IV

Item 14.  Exhibits, Financial Statement Schedules and Reports on Form 8-K

1.  Financial Statements

              The following consolidated financial statements of the Company and
its  subsidiaries  and report of independent  accountants are filed as a part of
this Report:

    Report of Independent Accountants

    Consolidated   Balance  Sheets  at  September  30,  1998  and  1997

    Consolidated  Statements  of  Income  for the  fiscal  years  ended
    September  30,  1998,  1997 and  1996  

    Consolidated  Statements of Changes in Stockholders'  Equity for the fiscal
    years ended September 30, 1998, 1997 and 1996

    Consolidated  Statements of Cash Flows for the fiscal years ended September
    30, 1998, 1997 and 1996

    Notes to Consolidated Financial Statements

2.  Financial Statement Schedules

    Report of Independent Accountants on Financial Statement Schedule        S-1

    Schedule II - Rule 12-09 Valuation and Qualifying Accounts and           S-2
    Reserves for the Fiscal Years Ended September 30, 1998 and 1997

              All other schedules are omitted because they are not applicable or
the required information is shown in the financial statements or notes thereto.

3.  Exhibits

              The  exhibits  listed on the  accompanying  Index to Exhibits  are
filed as part of this Report.

4.  Reports on Form 8-K

              On August  21,  1998,  a  Current  Report on Form 8-K was filed to
report,  pursuant  to Item 5 thereof,  the  adoption of a Rights  Agreement  and
declaration by the Board of Directors of the Company of a dividend  distribution
of one  Right  for each  outstanding  share of Common  Stock of the  Company  to
stockholders of record at the close of business on August 31, 1998.


                                       48

<PAGE>

                                INDEX TO EXHIBITS

Exhibit                              Description
-------                              -----------

2.1      Asset  Purchase  Agreement,  dated as of July 19,  1997,  by and  among
         Figgie  International  Inc.,  Figgie  International  Real Estate  Inc.,
         Figgie  Properties  Inc.,  Figgie  Licensing  Corporation,  Figgie Risk
         Management  Co.  and  SKL  Lift,  Inc.  (filed  as  Exhibit  2.1 to the
         Company's  Current  Report on Form 8-K  filed  with the  Commission  on
         December 2, 1997 (the "December 1997 8-K") and  incorporated  herein by
         reference thereto)
2.2      Amendment,  dated  as of  November  9,  1997,  by  and  between  Figgie
         International  Inc.  and SKL Lift,  Inc.  (filed as Exhibit  2.2 to the
         December 1997 8-K and incorporated herein by reference thereto)
3.1      Restated  Certificate  of  Incorporation  of the  Registrant  (filed as
         Exhibit  3.1  to the  Company's  Registration  Statement  on  Form  S-1
         (Registration No.  333-13181),  filed with the Commission on October 1,
         1996,  as amended on  November  12,  1996 and  February  20,  1997 (the
         "Registration Statement") and incorporated herein by reference thereto)
3.2      Amended  By-laws  of  the  Registrant  (filed  as  Exhibit  3.2  to the
         Company's  Current  Report on Form 8-K  filed  with the  Commission  on
         October 2, 1998 (the  "October  1998 8-K") and  incorporated  herein by
         reference thereto)
4.1      Rights Agreement,  dated as of August 21, 1998, by and between OmniQuip
         International,  Inc. and First  Chicago  Trust  Company of New York, as
         Rights Agent.  The Rights  Agreement  includes as Exhibit A thereto the
         Certificate  of  Designations,  Preferences  and  Rights  of  Series  A
         Preferred Stock of OmniQuip  International,  Inc., as Exhibit B thereto
         the Form of Rights  Certificate and as Exhibit C thereto the Summary of
         Rights to Purchase  Series A Preferred Stock (filed as Exhibit 4 to the
         Company's  Current  Report on Form 8-K  filed  with the  Commission  on
         August 21, 1998 and incorporated herein by reference thereto)
4.2      Amendment  No. 1 to Rights  Agreement,  dated as of October 2, 1998, by
         and  between  OmniQuip  International,  Inc.  and First  Chicago  Trust
         Company of New York, as Rights Agent (filed as Exhibit 4 to the October
         1998 8-K and incorporated herein by reference thereto)
*10.1    Purchase and  Stockholder  Agreement,  dated September 20, 1995, by and
         between  Uniquip  Corporation and P. Enoch Stiff (filed as Exhibit 10.1
         to the  Registration  Statement  and  incorporated  herein by reference
         thereto)
*10.2    Stock Pledge  Agreement,  dated  September  20, 1995, by and between P.
         Enoch  Stiff and  Uniquip  Corporation  (filed as  Exhibit  10.2 to the
         Registration Statement and incorporated herein by reference thereto)
*10.3    $126,859  Promissory  Note, dated September 20, 1995, by P. Enoch Stiff
         to  Uniquip  Corporation  (filed as  Exhibit  10.3 to the  Registration
         Statement and incorporated herein by reference thereto)
*10.4    Letter  Agreement,  dated  September  20, 1995, by and between P. Enoch
         Stiff  and  Uniquip   Corporation   (filed  as  Exhibit   10.4  to  the
         Registration Statement and incorporated herein by reference thereto)
*10.5    Amendment  to  Promissory  Note  and  Stock  Pledge  Agreement,   dated
         September 30, 1996, by and between OmniQuip International,  Inc. and P.
         Enoch Stiff (filed as Exhibit 10.5 to the  Registration  Statement  and
         incorporated herein by reference thereto)
*10.6    Investment  Agreement,  dated August 16, 1995,  by and between P. Enoch
         Stiff and Harbour Group Investments III, L.P. (filed as Exhibit 10.6 to
         the  Registration   Statement  and  incorporated  herein  by  reference
         thereto)
*10.7    Participation Agreement, dated August 16, 1995, by and between P. Enoch
         Stiff and Harbour Group Investments III, L.P. (filed as Exhibit 10.7 to
         the  Registration   Statement  and  incorporated  herein  by  reference
         thereto)
*10.8    Purchase and  Stockholder  Agreement,  dated September 20, 1995, by and
         between Uniquip Corporation and James H. Hook (filed as Exhibit 10.8 to
         the  Registration   Statement  and  incorporated  herein  by  reference
         thereto)
*10.9    Stock Pledge Agreement,  dated September 20, 1995, by and between James
         H.  Hook  and  

                                       49

<PAGE>

         Uniquip  Corporation   (filed  as  Exhibit  10.9  to  the  Registration
         Statement and incorporated herein by reference thereto)
*10.10   $47,572  Promissory Note, dated September 20, 1995, by James H. Hook to
         Uniquip  Corporation  (filed  as  Exhibit  10.10  to  the  Registration
         Statement and incorporated herein by reference thereto)
*10.11   Letter  Agreement,  dated  September  20, 1995, by and between James H.
         Hook  and  Uniquip   Corporation   (filed  as  Exhibit   10.11  to  the
         Registration Statement and incorporated herein by reference thereto)
*10.12   Amendment  to  Promissory  Note  and  Stock  Pledge  Agreement,   dated
         September 30, 1996,  by and between  OmniQuip  International,  Inc. and
         James H. Hook (filed as Exhibit 10.12 to the Registration Statement and
         incorporated herein by reference thereto)
*10.13   Purchase and  Stockholder  Agreement,  dated September 20, 1995, by and
         between Uniquip Corporation and Curtis J. Laetz (filed as Exhibit 10.13
         to the  Registration  Statement  and  incorporated  herein by reference
         thereto)
*10.14   Stock Pledge Agreement, dated September 20, 1995, by and between Curtis
         J.  Laetz  and  Uniquip  Corporation  (filed  as  Exhibit  10.14 to the
         Registration Statement and incorporated herein by reference thereto)
*10.15   $47,572  Promissory  Note, dated September 20, 1995, by Curtis J. Laetz
         to  Uniquip  Corporation  (filed as Exhibit  10.15 to the  Registration
         Statement and incorporated herein by reference thereto)
*10.16   Letter  Agreement,  dated  September 20, 1995, by and between Curtis J.
         Laetz  and  Uniquip   Corporation   (filed  as  Exhibit  10.16  to  the
         Registration Statement and incorporated herein by reference thereto)
*10.17   Amendment  to  Promissory  Note  and  Stock  Pledge  Agreement,   dated
         September 30, 1996,  by and between  OmniQuip  International,  Inc. and
         Curtis J. Laetz (filed as Exhibit 10.17 to the  Registration  Statement
         and incorporated herein by reference thereto)
*10.18   Purchase and  Stockholder  Agreement,  dated September 20, 1995, by and
         between Uniquip Corporation and Robert D. Melin (filed as Exhibit 10.18
         to the  Registration  Statement  and  incorporated  herein by reference
         thereto)
*10.19   Stock Pledge Agreement, dated September 20, 1995, by and between Robert
         D.  Melin  and  Uniquip  Corporation  (filed  as  Exhibit  10.19 to the
         Registration Statement and incorporated herein by reference thereto)
*10.20   $47,572  Promissory  Note, dated September 20, 1995, by Robert D. Melin
         to  Uniquip  Corporation  (filed as Exhibit  10.20 to the  Registration
         Statement and incorporated herein by reference thereto)
*10.21   Letter  Agreement,  dated  September 20, 1995, by and between Robert D.
         Melin  and  Uniquip   Corporation   (filed  as  Exhibit  10.21  to  the
         Registration Statement and incorporated herein by reference thereto)
*10.22   Amendment  to  Promissory  Note  and  Stock  Pledge  Agreement,   dated
         September 30, 1996,  by and between  OmniQuip  International,  Inc. and
         Robert D. Melin (filed as Exhibit 10.22 to the  Registration  Statement
         and incorporated herein by reference thereto)
*10.23   Purchase and  Stockholder  Agreement,  dated September 20, 1995, by and
         between Uniquip  Corporation and Paul D. Roblee (filed as Exhibit 10.23
         to the  Registration  Statement  and  incorporated  herein by reference
         thereto)
*10.24   Stock Pledge  Agreement,  dated September 20, 1995, by and between Paul
         D.  Roblee  and  Uniquip  Corporation  (filed as  Exhibit  10.24 to the
         Registration Statement and incorporated herein by reference thereto)
*10.25   $47,572 Promissory Note, dated September 20, 1995, by Paul D. Roblee to
         Uniquip  Corporation  (filed  as  Exhibit  10.25  to  the  Registration
         Statement and incorporated herein by reference thereto)
*10.26   Letter  Agreement,  dated  September  20, 1995,  by and between Paul D.
         Roblee  and  Uniquip   Corporation  (filed  as  Exhibit  10.26  to  the
         Registration Statement and incorporated herein by reference thereto)
*10.27   Amendment  to  Promissory  Note  and  Stock  Pledge  Agreement,   dated
         September 30, 1996,  by

                                       50

<PAGE>

         and between OmniQuip  International,  Inc. and Paul D. Roblee (filed as
         Exhibit 10.27 to the Registration  Statement and incorporated herein by
         reference thereto)
*10.28   OmniQuip International, Inc. 1996 Executive Stock Option Plan (filed as
         Exhibit 10.28 to the Registration  Statement and incorporated herein by
         reference thereto)
*10.29   Form of Option Agreement pursuant to the OmniQuip  International,  Inc.
         1996  Executive  Stock  Option  Plan  (filed  as  Exhibit  10.29 to the
         Registration Statement and incorporated herein by reference thereto)
*10.30   OmniQuip  International,  Inc. 1996 Long Term  Incentive Plan (filed as
         Exhibit 10.30 to the Registration  Statement and incorporated herein by
         reference thereto)
*10.31   OmniQuip International,  Inc. 1996 Directors Non-Qualified Stock Option
         Plan  (filed  as  Exhibit  10.31  to  the  Registration  Statement  and
         incorporated herein by reference thereto)
*10.32   Form of Option Agreement pursuant to the OmniQuip  International,  Inc.
         1996 Directors  Non-Qualified Stock Option Plan (filed as Exhibit 10.32
         to the  Registration  Statement  and  incorporated  herein by reference
         thereto)
10.33    Insurance  Agreement,  dated September 27, 1996, by and between Harbour
         Group Ltd.  and  Uniquip  Corporation  (filed as  Exhibit  10.39 to the
         Registration Statement and incorporated herein by reference thereto)
10.34    Corporate   Development   Consulting  and  Advisory   Services   Letter
         Agreement,   dated   September  30,  1996,  by  and  between   OmniQuip
         International,  Inc.  and  Harbour  Group  Industries,  Inc.  (filed as
         Exhibit 10.40 to the Registration  Statement and incorporated herein by
         reference thereto)
10.35    Operations  Consulting and Advisory  Services Letter  Agreement,  dated
         September 30, 1996,  by and between  OmniQuip  International,  Inc. and
         Harbour  Group  Ltd.  (filed  as  Exhibit  10.41  to  the  Registration
         Statement and incorporated herein by reference thereto)
10.36    Collective  Bargaining  Agreement,  effective  from November 1, 1994 to
         October 31,  1998,  by and between TRAK  International,  Inc. and Local
         1430,  District No. 10  International  Association  of  Machinists  and
         Aerospace Workers (filed as Exhibit 10.48 to the Registration Statement
         and incorporated herein by reference thereto)
10.37    Contract No.  DAAE0795DR012  between TRAK International,  Inc. and U.S.
         Army   Tank-Automotive   Command   (filed  as  Exhibit  10.49P  to  the
         Registration Statement and incorporated herein by reference thereto)
10.38    Floorplan Repurchase  Agreement,  dated October 2, 1990, by and between
         TRAK  International,  Inc. and Deutsche Financial Services and Addendum
         to Floorplan Repurchase Agreement,  dated June 14, 1993, by and between
         TRAK  International,  Inc. and Deutsche  Financial  Services  (Deutsche
         Financial Services as successor to ITT Commercial Finance Corp. and ITT
         Commercial Finance, a division of ITT Industries of Canada Ltd.) (filed
         as Exhibit 10.50 to the Registration  Statement and incorporated herein
         by reference thereto)
10.39    Letter   Agreement,   dated  August  21,  1996,  by  and  between  TRAK
         International,  Inc. and Deutsche  Financial Services (filed as Exhibit
         10.51  to  the  Registration   Statement  and  incorporated  herein  by
         reference thereto)
10.40    Agreement, dated January 19, 1995, between CBM Industries,  Inc., d/b/a
         RJ Associates and Lull Industries,  Inc. (filed as Exhibit 10.53 to the
         Registration Statement and incorporated herein by reference thereto)

10.41    Industrial Park Lease,  dated April 1, 1995, by and between the City of
         Oakes  and  Lull  Industries,  Inc.  (filed  as  Exhibit  10.54  to the
         Registration Statement and incorporated herein by reference thereto)
10.42    Indemnification  Agreement by and among OmniQuip  International,  Inc.,
         Harbour Group  Investments III, L.P. and Uniquip-HGI  Associates,  L.P.
         (filed as Exhibit 10.2 to the Company's  Quarterly  Report on Form 10-Q
         filed with the  Commission  on May 15,  1997 (the "May 1997  10-Q") and
         incorporated herein by reference thereto)
10.43    Underwriting  Agreement,  dated March 20, 1997,  by and among  OmniQuip
         International,  Inc., Harbour Group Investments III, L.P.,  Uniquip-HGI
         Associates, L.P., and Morgan Stanley & Co. Incorporated,  Credit Suisse
         First Boston  Corporation,  Schroder  Wertheim & Co.  Incorporated  and
         Robert W. Baird & Co.  Incorporated,  as representatives of the several
         U.S.  underwriters,  and 

                                       51

<PAGE>

         Morgan Stanley & Co. International Limited,  Credit Suisse First Boston
         (Europe) Limited, J. Henry Schroder & Co. Limited and Robert W. Baird &
         Co.  Incorporated,  as  representatives  of the  several  international
         underwriters   (filed  as  Exhibit  10.1  to  the  May  1997  10-Q  and
         incorporated herein by reference thereto)
10.44    Credit  Agreement,  dated  November  17,  1997,  by and among  OmniQuip
         International,  Inc., the certain  lending  institutions  party thereto
         from time to time,  Morgan Stanley Senior Funding,  Inc. as Syndication
         Agent and Arranger,  and First Union National  Bank, as  Administrative
         Agent and Co-Arranger (filed as Exhibit 10 to the December 1997 8-K and
         incorporated herein by reference thereto)
10.45    Business  Premises  Lease  Agreement,  dated  October 27, 1997,  by and
         between Garden Way Incorporated and TRAK International,  Inc. (filed as
         Exhibit  10.55 to the  Company's  Annual Report on Form 10-K filed with
         the  Commission  on  December  24,  1997 (the  "1997  Form  10-K")  and
         incorporated herein by reference thereto)
10.46    Lease Agreement,  dated May 15, 1997, by and between B.M.S. Management,
         Inc. and Snorkel,  a division of Figgie  International  Inc.  (filed as
         Exhibit  10.56  to the  1997  Form  10-K  and  incorporated  herein  by
         reference thereto)
10.47    Lease Agreement,  dated February 1, 1994, by and between SJ Associates,
         L.P.  and  Snorkel-Economy,  a division  of Figgie  International  Inc.
         (filed as Exhibit 10.57 to the 1997 Form 10-K and  incorporated  herein
         by reference thereto)
10.48    Land Lease,  dated as of November  17,  1997,  by and between SKL Lift,
         Inc. and Figgie  International Real Estate Inc. (filed as Exhibit 10.58
         to the 1997 Form 10-K and incorporated herein by reference thereto)
10.49    Deed of Lease,  dated as of November 17, 1997,  by and between  Snorkel
         Elevating Work Platforms Limited and Figgie  International  Real Estate
         Inc.  (filed as  Exhibit  10.59 to the 1997 Form 10-K and  incorporated
         herein by reference thereto)
10.50    Agreement  for  Trademark  Assignment  and  License-Back,  dated  as of
         November  17, 1997,  by and between  Iveco  Magirus  Brandschutztechnik
         GmbH,  Figgie  International  Inc. and SKL Lift, Inc. (filed as Exhibit
         10.60 to the  1997  Form  10-K and  incorporated  herein  by  reference
         thereto)
*10.51   Amended  and  Restated  Management  Agreement  dated as of June 9, 1997
         between  Figgie  International  Inc.  and  Richard A.  Solon  (filed as
         Exhibit 10.1 to the Company's  Quarterly Report on Form 10-Q filed with
         the  Commission  on February  17, 1998 (the  "February  1998 10-Q") and
         incorporated herein by reference thereto)
10.52    Non-Competition  Agreement  dated  as of June 9,  1997  between  Figgie
         International  Inc.  and Richard A. Solon (filed as Exhibit 10.2 to the
         February 1998 10-Q and incorporated herein by reference thereto)
10.53    Underwriting  Agreement,  dated March 11, 1998,  by and among  OmniQuip
         International,  Inc., P. Enoch Stiff,  Harbour Group  Investments  III,
         L.P.,   Uniquip-HGI   Associates,   L.P.  and  Morgan   Stanley  &  Co.
         Incorporated,  Credit Suisse First Boston  Corporation,  Schroder & Co.
         Inc. and Robert W. Baird & Co. Incorporated,  as representatives of the
         several  U.S.  underwriters,  and  Morgan  Stanley & Co.  International
         Limited, Credit Suisse First Boston (Europe) Limited, J. Henry Schroder
         &  Co.   Limited   and   Robert  W.  Baird  &  Co.   Incorporated,   as
         representatives  of the several  international  underwriters  (filed as
         Exhibit 10.1 to the Company's  Quarterly Report on Form 10-Q filed with
         the  Commission on May 15, 1998 (the "May 1998 10-Q") and  incorporated
         herein by reference thereto)
10.54    Indemnification  Agreement, dated March 11, 1998, by and among OmniQuip
         International,  Inc., Harbour Group Investments III, L.P.,  Uniquip-HGI
         Associates,  L.P.  and P. Enoch Stiff (filed as Exhibit 10.2 to the May
         1998 10-Q and incorporated herein by reference thereto)
10.55    Lease,  dated as of June 30, 1998,  between PW Investment  LLC and TRAK
         International,  Inc.  (filed as Exhibit 10 to the  Company's  Quarterly
         Report on Form 10-Q filed with the  Commission  on August 10,  1998 and
         incorporated herein by reference thereto)
10.56    Lease  Agreement,  dated  August 19,  1998,  by and between Duke Realty
         Minnesota, LLC and Lull International, Inc.
10.57    Collective  Bargaining  Agreement,  effective  from November 1, 1998 to
         October 31,  2003,  by and between TRAK  International,  Inc. and Local
         1430,  District No. 10  International  Association  of  Machinists  and
         Aerospace Workers

                                       52


<PAGE>

*10.58   Letter  Agreement,  dated  October 1,  1998,  by and  between  OmniQuip
         International, Inc. and P. Enoch Stiff
*10.59   Letter  Agreement,  dated  October 1,  1998,  by and  between  OmniQuip
         International, Inc. and Curtis J. Laetz
*10.60   Letter  Agreement,  dated  October 1,  1998,  by and  between  OmniQuip
         International, Inc. and Richard G. Mueller
*10.61   Letter  Agreement,  dated  October 1,  1998,  by and  between  OmniQuip
         International, Inc. and Richard A. Solon
    21   Subsidiaries of the Registrant
    23   Consent of PricewaterhouseCoopers LLP
    24   Powers of Attorney
    27   Financial Data Schedule

*Management contract or compensatory plan or arrangement.












                                       53

<PAGE>

                                   SIGNATURES

         Pursuant  to the  requirements  of Section  13 or 15(d) the  Securities
Exchange Act of 1934, as amended,  the registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.

                                      OmniQuip International, Inc.

                                      By:/s/ Philip G. Franklin
                                         ------------------------
                                         Philip G. Franklin
                                         Vice President-Finance, Chief Financial
                                         Officer, Treasurer and Secretary

December 28, 1998

              Pursuant to the  requirements  of the  Securities  Exchange Act of
1934, as amended,  this report has been signed below by the following persons on
behalf of the registrant and in the capacities indicated on December 28, 1998.

            *                 President, Chief Executive Officer and Director
________________________      (Principal executive officer)
     P. Enoch Stiff


/s/ Philip G. Franklin        Vice President - Finance, Chief Financial Officer,
________________________      Treasurer and Secretary (Principal financial and
    Philip G. Franklin        accounting officer)


            *                 Director and Chairman of the Board
------------------------
  Donald E. Nickelson


            *                 Director
------------------------
     Peter S. Finley


            *                 Director
------------------------
      Jeffrey L. Fox


            *                 Director
------------------------
     Samuel A. Hamacher


            *                 Director
------------------------
       Paul W. Jones


            *                 Director
------------------------
      Jerry E. Ritter



                                       54
<PAGE>


            *                 Director
------------------------
  Joseph F. Shaughnessy


            *                 Director
------------------------
    Robert L. Virgil


By: /s/ Philip G. Franklin
   -----------------------
   Philip G. Franklin
   Attorney-in-Fact



------------------

* Such signature has been affixed pursuant to the following Power of Attorney:







                                       55
<PAGE>

                                POWER OF ATTORNEY

         KNOW ALL PERSONS BY THESE  PRESENTS,  that the person  whose  signature
appears  below  constitutes  and  appoints P. Enoch Stiff,  Philip G.  Franklin,
Curtis J. Laetz and  Glenda  Moehlenpah,  and each of them,  his true and lawful
attorney-in-fact and agent, with full power of substitution,  for him and in his
name, place and stead, in any and all capacities, to sign the 1998 Annual Report
on Form 10-K of OmniQuip  International,  Inc.,  and to file the same,  with all
exhibits  thereto,  and  other  documents  in  connection  therewith,  with  the
Securities and Exchange Commission, granting unto each said attorney-in-fact and
agent full power and  authority  to do and perform  each and every act and thing
requisite  and  necessary  as fully to all intents  and  purposes as he might or
could  do  in  person,  and  hereby  ratifying  and  confirming  all  that  said
attorney-in-fact  and agent or his substitute or substitutes  may lawfully do or
cause to be done by virtue hereof.










                                       56
<PAGE>

                      REPORT OF INDEPENDENT ACCOUNTANTS ON
                          FINANCIAL STATEMENT SCHEDULE





To the Board of Directors and
    Stockholders of OmniQuip International, Inc.



Our audits of the consolidated  financial  statements  referred to in our report
dated November 3, 1998,  listed at Item 14. 1. of the Annual Report on Form 10-K
of OmniQuip  International,  Inc. for the fiscal year ended  September  30, 1998
also included an audit of the Financial Statement Schedule listed at Item 14. 2.
of such Form 10-K. In our opinion,  the Financial  Statement  Schedule  presents
fairly, in all material respects, the information set forth therein when read in
conjunction with the related consolidated financial statements.



PricewaterhouseCoopers LLP

St. Louis, Missouri
November 3, 1998






                                      S-1

<PAGE>

                                                                     SCHEDULE II

<TABLE>
<CAPTION>
                          OMNIQUIP INTERNATIONAL, INC.

            Rule 12-09 Valuation and Qualifying Accounts and Reserves
                  for the Fiscal Year Ended September 30, 1998
                                 (in thousands)

                 Column A                     Column B             Column C              Column D     Column E
-------------------------------------------- ------------  -------------------------- ------------   -----------
                                                                   Additions
                                                           --------------------------
                                             Balance at    Charged to                                Balance at
                                              Beginning     Costs and    Charged to                    End of
                                                 of         Expenses       Other                       Period
      Valuation and Reserve Accounts           Period                   Accounts(1)   Deductions
-------------------------------------------- ------------  ------------ ------------- ------------   -----------

<S>                                          <C>           <C>          <C>           <C>            <C>            
Accounts receivable reserve............      $   504       $153         $  753        $ 115          $1,295
                                             =======       ====         ======        =====          ======
Excess and obsolete inventory
   reserves............................      $2,273        $  7         $1,808        $ 439          $3,649
                                             ======        ====         ======        =====          ======

</TABLE>

(1) Relates to the acquisition of Snorkel on November 17, 1997.


<TABLE>
<CAPTION>
            Rule 12-09 Valuation and Qualifying Accounts and Reserves
                  for the Fiscal Year Ended September 30, 1997
                                 (in thousands)

                 Column A                     Column B             Column C             Column D     Column E
-------------------------------------------- ------------  ------------------------- ------------   -----------
                                                                  Additions
                                                           -------------------------
                                             Balance at    Charged to                               Balance at
                                              Beginning     Costs and   Charged to                    End of
                                                 of         Expenses       Other                      Period
      Valuation and Reserve Accounts           Period                    Accounts    Deductions
-------------------------------------------- ------------  ------------ ------------ ------------   -----------
<S>                                          <C>           <C>          <C>          <C>            <C>
Accounts receivable reserve............      $   351       $164         $   --       $  11          $   504
                                             =======       ====         ======       =====          =======
Excess and obsolete inventory
   reserves............................      $2,482        $420         $   --       $629           $2,273
                                             ======        ====         ======       ====           ======
</TABLE>




                                      S-2