U. S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

(Mark One)

(X)   Quarterly report under Section 13 or 15(d) of the Securities Exchange Act
      of 1934 for the quarterly period ended September 29, 2001.

( )   Transition report under Section 13 or 15(d) of the Securities Exchange
      Act of 1934 for the transition period from _____ to _____.

                         Commission File Number 0-18707


                                TBM HOLDINGS INC.
        (Exact Name of Small Business Issuer as Specified in Its Charter)

                FLORIDA                                  59-2824411
    (State or Other Jurisdiction of         (I.R.S. Employer Identification No.)
     Incorporation or Organization)

                                 136 MAIN STREET
                           WESTPORT, CONNECTICUT 06880
                    (Address of Principal Executive Offices)

                                 (203) 227-6140
                (Issuer's Telephone Number, Including Area Code)


      Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports); and (2)
has been subject to such filing requirements for the past 90 days.

                                [ X ] Yes [ ] No

      The number of shares outstanding of the issuer's Common Stock, $.001 par
value per share, as of November 10, 2001, was 5,595,089.


      Transitional Small Business Disclosure Format (check one): [ ] Yes  [X] No

<PAGE>


                                TBM HOLDINGS INC.

                                TABLE OF CONTENTS

Part I:   Financial Information

          Item 1.  Consolidated Financial Statements

          Condensed Consolidated Unaudited Balance Sheets
          at September 29, 2001 and December 30, 2000 .........................2

          Condensed Consolidated Unaudited Statements of Operations
          for the three months and nine months ended September 29, 2001
          and September 30, 2000...............................................3

          Condensed Consolidated Unaudited Statement of Stockholders'
          Equity and Comprehensive Loss for the nine months ended
          September 29, 2001...................................................4

          Condensed Consolidated Unaudited Statements of Cash Flows
          for the nine months ended September 29, 2001 and September 30, 2000..5

          Notes to Condensed Consolidated Unaudited Financial Statements.......6

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

Part II:  Other Information

          Item 1. Legal Proceedings...........................................22

          Item 2. Changes in Securities and Use of Proceeds...................22

          Item 3. Defaults Upon Senior Securities.............................22

          Item 4. Submission of Matters to a Vote of Security Holders.........22

          Item 5. Other Information...........................................22

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

Signatures....................................................................24


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<CAPTION>
                                                   PART 1 - FINANCIAL INFORMATION

Item 1.  Financial Statements

                                                 TBM HOLDINGS INC. AND SUBSIDIARIES
                                           CONDENSED CONSOLIDATED UNAUDITED BALANCE SHEETS
                                           (In thousands, except share and per share data)


                                                                     SEPTEMBER 29,   DECEMBER 30,
                                                                         2001           2000
                                                                     -------------   ------------
                    ASSETS
<S>                                                                      <C>           <C>
Current assets:
      Cash and cash equivalents                                          $    226      $  1,833
      Trade accounts receivable, net                                        9,228        12,182
      Inventories, net                                                      8,803        10,211
      Prepaid expenses and other receivables                                  190           252
                                                                         --------      --------
          Total current assets                                             18,447        24,478
      Property, plant and equipment, net                                    8,208        10,248
      Goodwill and other intangibles, net                                  10,226        15,085
      Other assets                                                            236           357
                                                                         --------      --------
          Total assets                                                   $ 37,117      $ 50,168
                                                                         ========      ========

                      LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
      Trade accounts payable                                             $  6,681      $  5,877
      Current portion of long-term liabilities                             12,372         4,983
      Accrued expenses                                                      2,922         3,543
      Bank overdraft payable                                                  254         1,329
                                                                         --------      --------
          Total current liabilities                                        22,229        15,732

Revolving credit loan, excluding current portion                               --         7,247

Long-term debt, excluding current portion                                   4,691         6,472

Series B Cumulative convertible redeemable preferred stock,
      $.001 par value.  Authorized 2,000,000 shares; 944,508 shares
      issued and outstanding at September 29, 2001.  Aggregate
      liquidation preference of $3,163 at September 29, 2001                3,050            --

Stockholders' equity:
      Common stock, $.001 par value.  Authorized
          10,000,000 shares; 5,595,089 shares issued and outstanding            6             6
      Additional paid-in capital                                           42,513        42,262
      Accumulated other comprehensive income (loss) - foreign
          currency translation adjustments                                     17          (100)
      Accumulated deficit                                                 (35,389)      (21,451)
                                                                         --------      --------
          Total stockholders' equity                                        7,147        20,717

Commitments and contingencies                                            --------      --------
          Total liabilities and stockholders' equity                     $ 37,117      $ 50,168
                                                                         ========      ========

         See accompanying notes to condensed consolidated unaudited financial statements.
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                                                                  2


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<TABLE>
<CAPTION>

                                                 TBM HOLDINGS INC. AND SUBSIDIARIES
                                      CONDENSED CONSOLIDATED UNAUDITED STATEMENTS OF OPERATIONS
                                           (In thousands, except share and per share data)


                                                     THREE MONTHS ENDED               NINE MONTHS ENDED
                                              ------------------------------    ------------------------------
                                              SEPTEMBER 29,    SEPTEMBER 30,    SEPTEMBER 29,    SEPTEMBER 30,
                                                  2001             2000             2001             2000
                                              -------------    -------------    -------------    -------------

<S>                                           <C>              <C>              <C>              <C>
Net sales                                     $    12,644      $    11,941      $    41,597      $    25,839
Cost of sales                                      11,361           10,240           36,579           21,181
                                              ------------     ------------     ------------     ------------
         Gross profit                               1,283            1,701            5,018            4,658

Selling, general and
         administrative expenses                    3,358            3,312           11,554            7,097
Loss on sale of foreign subsidiary                     --               --            1,097               --
Loss on impairment of assets                        2,836               --            4,679               --
                                              ------------     ------------     ------------     ------------
         Operating loss                            (4,911)          (1,611)         (12,312)          (2,439)
Interest expense                                     (396)            (330)          (1,258)            (742)
Other income, net                                      28               37              179              297
                                              ------------     ------------     ------------     ------------
         Loss before income taxes                  (5,279)          (1,904)         (13,391)          (2,884)
Income tax expense                                     16               13              121               44
                                              ------------     ------------     ------------     ------------
         Net loss                                  (5,295)          (1,917)         (13,512)          (2,928)
Convertible preferred stock dividends and
         beneficial conversion feature
         accretion                                    195               --              426               --
                                              ------------     ------------     ------------     ------------
         Net loss available to
         common stockholders                  $    (5,490)     $    (1,917)     $   (13,938)     $    (2,928)
                                              ============     ============     ============     ============

Basic and diluted loss per share:             $     (0.98)     $     (0.42)     $     (2.49)     $     (0.71)
                                              ============     ============     ============     ============
Weighted average shares outstanding             5,595,089        4,517,667        5,595,089        4,110,733
                                              ============     ============     ============     ============

                          See accompanying notes to condensed consolidated unaudited financial statements.
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                                                                  3


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<TABLE>
<CAPTION>
                                                 TBM HOLDINGS INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED UNAUDITED STATEMENT OF STOCKHOLDERS' EQUITY AND COMPREHENSIVE LOSS
                                                           (In thousands)


                                                                                         Accumulated
                                                           Common Stock      Additional     Other
                                                        -------------------    Paid-in   Comprehensive   Accumulated
                                                         Shares     Amount     Capital   Income (Loss)     Deficit         Total
                                                        ---------  --------  ----------  --------------  -----------    -----------
<S>                                                     <C>        <C>       <C>         <C>               <C>           <C>

Balances, December 30, 2000                                5,595   $    6    $ 42,262    $      (100)    $   (21,451)   $   20,717
  Comprehensive loss:
     Net loss                                                 --       --         --              --         (13,512)      (13,512)
     Foreign currency translation adjustments                 --       --         --              (9)             --            (9)
     Reclassification adjustment - realized
      foreign currency translation loss
      on sale of subsidiary                                   --       --         --             126              --           126
                                                                                                         -----------    ----------
     Total comprehensive loss                                                                                              (13,395)
                                                                                                                        ----------


     Intrinsic value of beneficial conversion feature         --       --        251              --            (251)           --
     Convertible preferred stock dividends                    --       --         --              --            (175)         (175)
                                                        ---------  --------  ----------  -----------       --------     ----------
Balances, September 29, 2001                               5,595   $    6    $ 42,513    $        17     $   (35,389)     $  7,147
                                                        =========  ========  ==========  ===========     ===========    ==========





                           See accompanying notes to condensed consolidated unaudited financial statements

                                                                  4
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<TABLE>
<CAPTION>
                                                 TBM HOLDINGS INC. AND SUBSIDIARIES
                                      CONDENSED CONSOLIDATED UNAUDITED STATEMENTS OF CASH FLOWS
                                                           (In thousands)


                                                                                     NINE MONTHS ENDED
                                                                               ----------------------------
                                                                               SEPTEMBER 29,  SEPTEMBER 30,
                                                                                    2001          2000
                                                                               -------------  -------------
<S>                                                                             <C>           <C>
Cash flows from operating activities:
     Net loss                                                                   $(13,512)     $ (2,928)
Adjustments to reconcile net loss to net cash used in operating activities:
     Depreciation and amortization                                                 1,466           867
     Loss on sale of foreign subsidiary                                            1,097            --
     Loss on impairment of assets                                                  4,679            --
Changes in working capital components                                              4,035        (1,560)
                                                                                ---------     ---------
          Net cash used in operating activities                                   (2,235)       (3,621)
                                                                                ---------     ---------
Cash flows from investing activities:
     Capital expenditures for property, plant and equipment, net                    (487)         (247)
     Payment for acquisition of businesses, net of cash acquired                      --       (13,394)
     Proceeds from sale of foreign subsidiary                                        707            --
     Proceeds from sale of fixed assets                                              252            --
                                                                                ---------     ---------
          Net cash provided by (used in) investing activities                        472       (13,641)
                                                                                ---------     ---------
Cash flows from financing activities:
     Change in bank overdraft payable                                             (1,075)         (519)
     Net borrowings (payments) under revolving credit loan                        (1,207)        2,196
     Borrowings under long-term debt                                                 233            --
     Payments on long-term debt                                                     (663)           --
     Issuance of redeemable preferred stock, net of offering costs                 2,875            --
     Issuance of common stock                                                         --         8,000
                                                                                ---------     ---------
          Net cash provided by financing activities                                  163         9,677
          Effect of foreign currency translation on cash                              (7)          (21)
                                                                                ---------     ---------
          Net decrease in cash                                                    (1,607)       (7,606)
Cash and cash equivalents, beginning of period                                     1,833        12,064
                                                                                ---------     ---------
Cash and cash equivalents, end of period                                        $    226      $  4,458
                                                                                =========     =========
Supplemental cash flow disclosure:
     Cash paid for interest                                                     $  1,005      $    736
     Cash paid for income taxes                                                 $     45      $    106

Supplemental non cash disclosure:
     Common stock issued for acquisition                                        $     --      $  3,000
     Note receivable from sale of foreign subsidiary                            $     76      $     --
     Dividends on preferred stock                                               $    175      $     --


                          See accompanying notes to condensed consolidated unaudited financial statements.
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                                                                  5

<PAGE>
                       TBM HOLDINGS INC. AND SUBSIDIARIES
         NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS
                 (In thousands, except share and per share data)


(1) GENERAL; DESCRIPTION OF BUSINESS; SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

GENERAL

The condensed consolidated financial statements included herein have been
prepared by TBM Holdings Inc. (the "Company"), without audit, pursuant to rules
and regulations of the Securities and Exchange Commission. The financial
statements reflect all adjustments (consisting of normal recurring accruals),
which are, in the opinion of management, necessary to fairly present such
information. Although the Company believes that the disclosures are adequate to
make the information presented not misleading, certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been omitted pursuant to such
rules and regulations. These interim financial statements should be read in
conjunction with the Company's most recently audited consolidated financial
statements included in the Company's Annual Report on Form 10-KSB, as amended,
for the fiscal year ended December 30, 2000.

DESCRIPTION OF BUSINESS

The primary business of the Company, through the operations of its wholly-owned
subsidiaries, Long Reach, Inc. ("Long Reach") and Blue Giant Equipment
Corporation ("Blue Giant"), and Long Reach's subsidiary, Presto Lifts, Inc.
("Presto Lifts"), is the manufacturing and marketing of hydraulically activated
material handling equipment in Houston, Texas; Brampton, Ontario, Canada; and
Pawtucket, Rhode Island. The Company markets the majority of its products
through numerous material-handling dealers in the U.S., Canada and other
international locations. The Company's raw materials are readily available, and
the Company is not dependent on a single supplier or only a few suppliers of
common proprietary products and is not dependent on any one customer.

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of the Company and
its subsidiaries. All significant intercompany transactions have been eliminated
in consolidation.

USE OF ESTIMATES

Management of the Company has made a number of estimates and assumptions related
to the reported amounts of assets and liabilities and the disclosure of
contingent assets and liabilities to prepare these financial statements in
conformity with accounting principles generally accepted in the United States of
America. Actual results could differ from those estimates.

CASH EQUIVALENTS

Cash equivalents for purposes of reporting cash flows consisted of highly liquid
debt instruments purchased with an original maturity of three months or less.
Such accounts are carried at cost plus accrued interest, which approximates
market value.

INVENTORY

Inventories are stated at the lower of cost or market. Cost is determined using
the first-in, first-out (FIFO) method.

                                       6
<PAGE>

                       TBM HOLDINGS INC. AND SUBSIDIARIES
         NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS
                 (In thousands, except share and per share data)


PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment are stated at cost. Equipment under capital leases
is stated at the present value of minimum lease payments at the inception of the
lease.

Depreciation of property, plant and equipment is calculated on the straight-line
method, based on the estimated useful lives of the various assets, as follows:

                                                          Life
                                                          ----------
                  Buildings and improvements          20 - 30 years
                  Machinery and equipment              3 - 12 years
                  Furniture and fixtures               7 -  8 years

Equipment held under capital leases is depreciated on a straight-line basis over
the shorter of the lease term or estimated useful life of the asset.

INCOME TAXES

Deferred tax assets and liabilities are recognized for the estimated future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases and operating loss and tax credit carryforwards. Deferred tax assets and
liabilities are measured using enacted tax rates in effect for the year in which
those temporary differences are expected to be recovered or settled. The effect
on deferred tax assets and liabilities of a change in tax rates is recognized in
income in the period that includes the enactment date.

GOODWILL, OTHER INTANGIBLES AND DEBT ISSUANCE COSTS

Goodwill is amortized on a straight-line basis over 20 years. Other intangibles
are being amortized on a straight-line basis over five years. Debt issuance
costs are being amortized over the life of the related debt and are included as
a component of interest expense.

IMPAIRMENT OF LONG-LIVED ASSETS

In assessing and measuring the impairment of long-lived assets, the Company
applies the provisions of Statement of Financial Accounting Standards (SFAS) No.
121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to Be Disposed Of". This Statement requires that long-lived assets and
certain identifiable intangibles be reviewed for impairment whenever events or
changes in circumstances indicate that the carrying amount of an asset may not
be recoverable. Recoverability of assets to be held and used is measured by a
comparison of the carrying amount of an asset to future net cash flows expected
to be generated by the asset. If the long-lived asset or identifiable intangible
being tested for impairment was acquired in a purchase business combination, the
goodwill that arose in that transaction is included in the asset grouping in
determining whether an impairment has occurred. If some but not all of the
assets acquired in that transaction are being tested, goodwill is allocated to
the assets being tested for impairment based on the relative fair values of the
long-lived assets and identifiable intangibles acquired at the acquisition date.
If such assets are considered to be impaired, the impairment to be recognized is
measured by the amount by which the carrying amount of the assets exceeds the
fair value of the assets. Additionally, where an impairment loss is recognized
for long-lived assets and identifiable intangibles where goodwill has been
allocated to the asset grouping, as

                                       7

<PAGE>

                       TBM HOLDINGS INC. AND SUBSIDIARIES
         NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS
                 (In thousands, except share and per share data)


described immediately above, the carrying amount of the allocated goodwill is
impaired (eliminated) before reducing the carrying amounts of impaired
long-lived assets. Assets to be disposed of are reported at the lower of the
carrying amount or fair value less costs to sell.

With respect to the carrying amounts of goodwill remaining after the testing for
impairment of long-lived assets and identifiable intangibles, the Company
assesses such carrying value for impairment whenever events or changes in
circumstances indicate that the carrying amount of such goodwill may not be
recoverable. The Company assesses the recoverability of this goodwill by
determining whether the amortization of goodwill over its remaining life can be
recovered through undiscounted future operating cash flows of the acquired
business. The amount of goodwill impairment, if any, is measured based on
projected discounted operating cash flows compared to the carrying value of such
goodwill.

REVENUE RECOGNITION AND PRODUCT WARRANTY

Revenue is recognized at the time the product is shipped and risk of loss has
passed to the customer. The Company warrants that all manufactured equipment
will be free from defects in workmanship, material and parts. Warranty periods
range from six months to one year from the original date of purchase, depending
on the product. The Company provides for estimated product warranty at the time
of sale.

COMPREHENSIVE LOSS

Statement of Financial Accounting Standards ("SFAS") No. 130 Reporting
Comprehensive Income, establishes standards for reporting and presentation of
comprehensive loss and its components. Comprehensive loss, consisting of net
loss and foreign currency translation adjustments, is presented in the Condensed
Consolidated Unaudited Statement of Stockholders' Equity and Comprehensive Loss.

FOREIGN CURRENCY GAINS AND LOSSES

The foreign-owned assets and liabilities of the Company have been translated to
United States dollars using the exchange rate in effect at the balance sheet
date. Results of foreign operations have been translated using the average
exchange rate during the periods of operation. Resulting translation adjustments
have been recorded as a component of "Accumulated Other Comprehensive Income
(Loss)" in the Condensed Consolidated Unaudited Statement of Stockholders'
Equity and Comprehensive Loss. Foreign currency transaction gains and losses are
included in the Condensed Consolidated Unaudited Statements of Operations as
they occur.

FAIR VALUE OF FINANCIAL INSTRUMENTS

Fair value estimates are made at discrete points in time based upon relevant
market information. These estimates may be subjective and involve uncertainties
and matters of significant judgment and therefore cannot be determined with
precision. The Company believes that the carrying amounts of its revolving
credit loans and long-term debt approximate the fair value of such items at
September 29, 2001.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In July 2001, the FASB issued Statement No. 141, "Business Combinations", and
Statement No. 142, "Goodwill and Other Intangible Assets". Statement 141
requires that the purchase method of accounting be used for all business
combinations initiated after June 30, 2001 as well as all purchase method
business combinations completed after June 30, 2001. Statement 142 will

                                       8
<PAGE>

                       TBM HOLDINGS INC. AND SUBSIDIARIES
         NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS
                 (In thousands, except share and per share data)


require that goodwill and intangible assets with indefinite useful lives no
longer be amortized, but instead tested for impairment at least annually in
accordance with the provisions of Statement 142. Statement 142 will also require
that intangible assets with definite useful lives be amortized over their
respective estimated useful lives to their estimated residual values, and
reviewed for impairment in accordance with SFAS No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of".

The Company is required to adopt the provisions of Statement 141 immediately,
and Statement 142 effective December 30, 2001. Upon adoption of Statement 142,
the Company will be required to reassess the useful lives and residual values of
all intangible assets acquired in purchase business combinations, and make any
necessary amortization period adjustments by the end of the first interim period
after adoption. In addition, to the extent an intangible asset is identified as
having an indefinite useful life, the Company will be required to test the
intangible asset for impairment in accordance with the provisions of Statement
142 within the first interim period. Any impairment loss will be measured as of
the date of adoption and recognized as the cumulative effect of a change in
accounting principle in the first interim period.

As of September 29, 2001, the Company has unamortized goodwill in the amount of
$10,019 which will be subject to the transition provisions of Statements 141 and
142. Amortization expense related to goodwill was $469 and $542 for the year
ended December 30, 2000 and the nine months ended September 29, 2001,
respectively. Because of the extensive effort needed to comply with adopting
Statements 141 and 142, it is not practicable to reasonably estimate the impact
of adopting these Statements on the Company's financial statements at the date
of this report, including whether any transitional impairment losses will be
required to be recognized as the cumulative effect of a change in accounting
principle.

In August 2001, the FASB issued Statement on Financial Accounting Standards No.
144, "Accounting for the Impairment or Disposal of Long-Lived Assets," (SFAS
144) which the Company is required to adopt effective December 30, 2001. SFAS
144 requires that long-lived assets to be disposed of by sale be measured at the
lower of carrying amount or fair value less cost to sell, whether reported in
continuing operations or in discontinued operations. SFAS 144 broadens the
reporting of discontinued operations to include all components of an entity with
operations that can be distinguished from the rest of the entity in a disposal
transaction. The impact, if any, of SFAS 144, on the financial position or
results of operations has not yet been determined.

(2)   LIQUIDITY

The Company's business is capital intensive and requires substantial amounts of
liquidity, principally for working capital requirements, debt service, the
acquisition and integration of new businesses and the development of new
products. To date, the Company has funded operating losses and capital
expenditures with funds raised during 1999 and 2000 through private placements
of common stock, the issuance of preferred stock in March 2001, and borrowings
on its revolving lines of credit. Most recently, on March 16, 2001, the Company
raised $2,875, net of offering costs, from the issuance of its Series B
Preferred Stock (see note 8). Management projects that the Company will require
significant additional funds for the continued implementation of its business
plan, including capital expenditures and debt service requirements for the
remainder of 2001 and beyond.

At September 29, 2001, the Company had negative working capital of $3,782. As of
September 29, 2001, Long Reach was in default of four of its financial covenants
under the Long Reach Credit Agreement (as defined in note 5). These defaults
occurred during the second quarter of 2001. On September 9, 2001, Long Reach and
its lender modified the terms of the Long Reach Credit

                                       9
<PAGE>

                       TBM HOLDINGS INC. AND SUBSIDIARIES
         NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS
                 (In thousands, except share and per share data)


Agreement. Pursuant to these modifications, the lender agreed not to demand
repayment of the amounts outstanding under the Long Reach Credit Agreement
before January 31, 2002, unless a new event of default occurs or the Company
does not sell certain assets by certain specified dates. These modifications
also included (i) a reduction in the revolving credit loan commitment from
$8,000 to $6,750 and $3,500 on September 30, 2001 and December 29, 2001,
respectively, (ii) a suspension in principal payments on the term loan until the
earlier of March 31, 2002 or the date of a demand for repayment of the debt, and
(iii) an increase in the one-time over advance from $350 to $700. This over
advance is due and payable on demand by the bank at any time. All amounts owing
to the bank are classified as current as of September 29, 2001. As of September
29, 2001, Long Reach was in compliance with its obligations under the
modifications to the Long Reach Credit Agreement. However, no assurance can be
given that Long Reach will be able to continue to comply with its obligations
under such modifications or the Long Reach Credit Agreement.

The Company forecasts that it will need to raise additional funds to meet the
capital expenditures and operating needs included in its business plan for 2001.
The Company is actively seeking to raise these funds and is exploring various
alternatives to address its short-term and long-term capital needs. These
alternatives may include raising additional funds through various financing
arrangements, restructuring its existing indebtedness, modifying its business
plan, sales of assets, or a combination of the foregoing. Many factors, some of
which may be beyond the Company's control, may affect the Company's ability to
resolve its short-term and long-term capital needs. These factors include the
willingness of the holders of the Company's debt securities and the banks to
agree to any restructuring of the Company's indebtedness that the Company may
seek; the availability of sufficient additional financing on terms acceptable to
the Company; prevailing and perceived economic conditions, both in general and
with respect to the Company's industry; and other factors that could affect the
Company's performance. In addition to its estimated 2001 cash requirements, the
Company must raise additional capital or generate sufficient operating cash flow
to satisfy its debt service obligations on the revolving credit loan under the
Long Reach Credit Agreement, which matures on March 31, 2002. No assurance can
be given that the Company will be able to raise additional funds on terms
acceptable to the Company, or at all.

The Company's financial statements have been prepared on a going-concern basis
which contemplates the realization of assets and the satisfaction of liabilities
in the normal course of business. See also "Liquidity and Capital Resources" in
Management's Discussion and Analysis of Financial Condition and Results of
Operations in Part I, Item 2 of this Quarterly Report on Form 10-QSB.

(3)   ACQUISITIONS

On February 23, 2000, the Company acquired Long Reach Holdings, Inc. (the
"Acquired Corporation") in a merger transaction (the "Long Reach Merger")
pursuant to which the Acquired Corporation merged into Long Reach. The aggregate
consideration in respect of the acquisition was (1) $1,500 of cash, (2) the
issuance of 500,000 shares of the Company's Common Stock valued at $6.00 per
share, (3) Long Reach's issuance of $3,000 of new subordinated notes to
refinance a portion of existing subordinated notes with certain stockholders of
the Acquired Corporation and (4) the assumption by Long Reach of $10,921 of
outstanding bank debt at the date of the acquisition. Upon closing, the Company
paid down $5,338 of the debt assumed. The Long Reach Merger has been accounted
for using the purchase method of accounting, effective at the date of
acquisition.

On May 16, 2000, the Company, through Long Reach, acquired all of the capital
stock of Lee Engineering Company, Inc. ("Lee Engineering") for $7,466 of cash
(the "Lee Engineering Acquisition"). On May 22, 2000, the Company changed the

                                       10

<PAGE>

                       TBM HOLDINGS INC. AND SUBSIDIARIES
         NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS
                 (In thousands, except share and per share data)


name of Lee Engineering to Presto Lifts, Inc. The Lee Engineering Acquisition
has been accounted for using the purchase method of accounting, effective at the
date of the acquisition.

On November 10, 2000, the Company, through Blue Giant, acquired substantially
all of the assets and specific liabilities of Blue Giant Limited ("BG Limited")
and certain intellectual property of Blue Giant Corporation for $8,307 (the
"Blue Giant Acquisition"). The Blue Giant Acquisition was financed by (1) the
Company's issuance of 923,077 shares of common stock to existing shareholders at
$6.50 per share and (2) Blue Giant's obtaining a loan agreement with a bank
which advanced $5,190 at closing. Also at closing, Blue Giant paid down $2,694
of debt of BG Limited. The Blue Giant Acquisition has been accounted for using
the purchase method of accounting, effective at the date of acquisition.

Results for the nine months ended September 30, 2000 include the operating
results of Long Reach for the period February 24, 2000 through September 30,
2000, and the operating results of Presto Lifts for the period May 16, 2000
through September 30, 2000.

Set forth below is certain unaudited summary pro forma combined financial data
of the Company for the nine months ended September 30, 2000, based upon
historical information that has been adjusted to reflect the Long Reach Merger,
the Lee Engineering Acquisition and the Blue Giant Acquisition as if such
transactions occurred at January 1, 2000. The unaudited summary pro forma
combined financial data is based upon certain assumptions and estimates, and
therefore does not purport to be indicative of the results that would have been
obtained had the transactions been completed as of such date or indicative of
future results of operations and financial position.

              Unaudited Summary Pro Forma Combined Financial Data

                                                      Nine months ended
                                                      September 30, 2000
                                                      ------------------
     Net sales                                              $   54,895
     Net loss                                               $   (4,186)
                                                            ===========
     Basic and diluted loss
        per share                                           $     (0.82)
                                                            ===========
     Basic and diluted weighted average
         shares outstanding                                   5,132,350
                                                            ===========


(4)   INVENTORIES, NET

Inventory costs at September 29, 2001 and December 30, 2000 are summarized as
follows:

                                  September 29, 2001      December 30, 2000
                                  ------------------      -----------------
     Raw materials                     $ 5,606                $ 5,878
     Work in process                     1,305                  1,512
     Finished goods                      1,892                  2,821
                                       -------                -------
           Total inventories           $ 8,803                $10,211
                                       =======                =======

(5)   LONG-TERM DEBT AND REVOLVING CREDIT LOANS

Long-term debt at September 29, 2001 and December 30, 2000 is summarized as
follows:

<TABLE>
<CAPTION>

                                                              September 29, 2001   December 30, 2000
                                                              ------------------   -----------------
<S>                                                           <C>                  <C>

     Note payable to bank, interest due in monthly
      installments at the lender's prime rate plus
      2.0%, principal due March 31, 2002                         $ 2,080               $ 2,500
     Note payable to bank, due in monthly installments

</TABLE>

                                       11
<PAGE>

                       TBM HOLDINGS INC. AND SUBSIDIARIES
         NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS
                 (In thousands, except share and per share data)


<TABLE>

     <S>                                                          <C>                  <C>
      of $6 plus interest at the lender's prime rate
      plus 1.0%, with final payment due
      November 1, 2020                                             1,317                 1,442
     Note payable to bank, due in monthly installments
      of $11 plus interest at the lender's prime rate
      plus 1.0%, with final payment due May 1, 2004                  338                   456
     Notes payable to stockholders, interest at 10%
      through February 23, 2004, and Senior Debt Rate
      plus 2% thereafter until maturity on
      February 23, 2005                                            3,232                 3,000
     Long Reach revolving credit loan (see below)                  6,849                 7,247
     Blue Giant revolving credit loan (see below)                  3,247                 4,057
                                                                  ------                ------

      Total long-term debt                                        17,063                18,702
     Less current portion                                         12,372                 4,983
                                                                  ------               -------

        Long-term debt, excluding current portion               $  4,691               $13,719
                                                                ========               =======
</TABLE>

The Long Reach credit agreement includes a revolving credit loan with a
commitment of $6,750, subject to borrowing base availability and other items,
and a term loan of $2,080(the "Long Reach Credit Agreement").

Borrowings under the Long Reach Credit Agreement accrue interest at the bank's
prime rate (6.00% at September 29, 2001) plus 2%. Subject to borrowing base
limitations calculated on eligible inventory and accounts receivable, the
revolving credit loan is due and payable on March 31, 2002. Additionally, a
one-quarter percent fee per annum is paid to the bank for the unused portion of
the revolving loan commitment. A closing fee of $125 was payable to the bank at
the time of entering into the Long Reach Credit Agreement in connection with the
Long Reach Merger.

The Long Reach Credit Agreement also provides that interest on the term loan is
paid monthly and that principal will be paid in full on March 31, 2002. The
Company is required to meet certain financial covenants as defined in the Long
Reach Credit Agreement. The Company will be required to refinance its Long Reach
debt by March 31, 2002. There can be no assurance that this refinancing can be
accomplished on terms acceptable to the Company or at all.

As of September 29, 2001, Long Reach was in default of four of its financial
covenants under the Long Reach Credit Agreement. These defaults occurred during
the second quarter of 2001. On September 9, 2001, Long Reach and its lender
modified the terms of the Long Reach Credit Agreement. Pursuant to these
modifications, the lender agreed not to demand repayment of the amounts
outstanding under the Long Reach Credit Agreement before January 31, 2002,
unless a new event of default occurs or the Company does not sell certain assets
by certain specified dates. These modifications also included (i) a reduction in
the revolving credit loan commitment from $8,000 to $6,750 and $3,500 on
September 30, 2001 and December 29, 2001, respectively, (ii) a suspension in
principal payments on the term loan until the earlier of March 31, 2002 or the
date of a demand for repayment of the debt, and (iii) an increase in the
one-time over advance from $350 to $700. This over advance is due and payable on
demand by the bank at any time. All amounts owing to the bank are classified as
current as of September 29, 2001. As of September 29, 2001, Long Reach was in
compliance with its obligations under the modifications to the Long Reach Credit
Agreement. However, no assurance can be given that Long Reach will be able to
continue to comply with its obligations under such modifications or the Long
Reach Credit Agreement.

At September 29, 2001, the borrowing base availability for the revolving credit
loan was determined to be $6,453, of which the Company had utilized $6,849,
including a $396 over advance.

The $3,232 notes payable to stockholders were recorded at a discount at the Long
Reach Merger date and interest was imputed at 6% using the interest method to
reflect an effective interest rate over the life of the notes. On March 16,

                                       12
<PAGE>

                       TBM HOLDINGS INC. AND SUBSIDIARIES
         NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS
                 (In thousands, except share and per share data)


2001 the annual rate of interest on the notes payable to stockholders increased
from 6% to 10% effective January 1, 2001.

The notes payable to stockholders and the Long Reach term loan and revolving
credit loan are secured by liens on substantially all of the assets of Long
Reach and Presto Lifts. In addition, the Long Reach Credit Agreement contains
various restrictions, including restrictions relating to entering into certain
activities, payment of dividends, investments, capital leases and purchases and
sales of assets. The Long Reach Credit Agreement also requires Long Reach to
comply with certain financial ratios and minimum levels of working capital.

The Blue Giant credit agreement includes a revolving credit loan with a
commitment of $4,117, subject to borrowing base availability and other items,
and term loans of $1,317 and $338, respectively (the "Blue Giant Credit
Agreement"). Borrowings under the Blue Giant Credit Agreement accrue interest at
the bank's prime rate (5.25% at September 29, 2001) plus 0.625% to 1.25% under
differing circumstances for the revolving credit agreement and 1.0% for the term
loans. Subject to borrowing base limitations calculated on eligible inventory
and accounts receivable, the revolving credit loan is reviewed on an annual
basis. Additionally, a one-quarter percent fee per annum is paid to the bank for
the unused portion of the revolving loan commitment. In addition, the Blue Giant
Credit Agreement contains certain financial and operating covenants. At
September 29, 2001, the borrowing base availability for the revolving credit
loan was determined to be $3,609, of which Blue Giant had utilized $3,247. At
June 30, 2001, the Company was in default with certain financial covenants under
the Blue Giant Credit Agreement. On September 26, 2001, the bank issued an
amendment to the Blue Giant Credit Agreement, which included a waiver that
effectively cured the default and amended certain debt covenants. In addition,
the amendment reduced the revolving loan commitment to $4,117 and revised the
rate at which interest accrues on the revolving loan to the bank's prime rate
plus 0.625% to 1.25% under differing circumstances. At September 29, 2001, the
Company is in compliance with the revised covenants.

(6)    ASSET IMPAIRMENT AND RESTRUCTURING CHARGES

In February 2000, the Company acquired Long Reach and recorded goodwill of
approximately $7.5 million. Since being acquired by the Company in February
2000, Long Reach has recorded operating losses. As a result of Long Reach's
slower than expected ability to restore customer confidence in its manufacturing
capabilities due to problems associated with prior management's decision to
acquire Brudi, Inc., and a downturn in the lift truck industry, Long Reach
continued to operate at a loss for the quarter and the six months ended June 30,
2001. The combination of these events triggered an impairment review of Long
Reach's long-lived assets, including goodwill at June 30, 2001. The Company
compared the expected undiscounted cash flows from the business plan to the
carrying value of the long-lived assets, including goodwill, noting that the
carrying value of the long-lived assets exceeded the expected undiscounted cash
flows. The impairment was determined by comparing the present value of the
expected cash flows to the carrying value of the long-lived assets. As a result,
the Company recorded an asset impairment of $1,843 in the three months ended
June 30, 2001.

During the three months ended September 29, 2001, as a result of the continuing
severe economic downturn, which was greater than the Company's expectations, a
revised operating plan was developed, including the potential sale of
under-performing assets. The revised projections provided the basis for
measurement of an asset impairment charge for the three months ended September
29, 2001. Certain assets have been recorded at September 29, 2001 at the
estimated fair value less costs to sell. For other under-performing assets the
Company compared the expected undiscounted cash flows from the revised business
plan to the carrying value of the long-lived assets, including goodwill, noting
that

                                       13

<PAGE>

                       TBM HOLDINGS INC. AND SUBSIDIARIES
         NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS
                 (In thousands, except share and per share data)


the carrying value of the long-lived assets exceeded the expected undiscounted
cash flows. The impairment was determined by comparing the present value of the
expected cash flows to the carrying value of the long-lived assets. Accordingly,
in the three months ended September 29, 2001, the Company recorded an asset
impairment charge of $2,836 for impairment of Long Reach long-lived assets. This
impairment is based on the estimated cash flows derived from the business plan
that exists as of September 29, 2001. Failure to achieve these expected cash
flow projections in future periods, or changes in the business plan could have a
negative impact on the Company and could result in further write-downs of the
Company's long-lived assets.

On October 2, 2000, the Company announced plans to exit its Little Rock,
Arkansas facility. Available capacity at its other manufacturing facilities
eliminated the need for this location. Product line transfers began immediately
and were completed by December 30, 2000. The lessor was notified that the
Company elected to terminate its lease and exit the facility by March 13, 2001.
Certain equipment was disposed of through a February 2001 auction. This exit
plan resulted in the involuntary termination of substantially all of the 82
salaried and hourly employees at Little Rock.

Restructuring expenses of $746 were recorded in the fourth quarter of fiscal
2000. Involuntary termination benefits represented $639 of the total
restructuring charge. The remaining $107 represented costs incurred to manage
the closing process and prepare the facility for exit. As of September 29, 2001,
all amounts had been paid.

(7)    DIVESTITURE OF SUBSIDIARY

On June 1, 2001, the Company sold 100 percent of the shares of stock of Long
Reach Brudi Pacific Pty Ltd, Long Reach's Australian subsidiary, for
approximately $707 in cash and a $76 note receivable. The note receivable will
be collected over four years. As a result of the sale, the Company recorded a
loss on sale of foreign subsidiary totaling $1,097, including $126 realized
foreign currency translation loss, and $700 of goodwill that was allocated to
this subsidiary in the Long Reach Merger based on the relative fair value of the
net assets acquired at the date of acquisition.

(8)    CUMULATIVE CONVERTIBLE REDEEMABLE PREFERRED STOCK

On March 16, 2001, the Company issued 944,508 shares (12% of the Company's fully
diluted capitalization) of 10% Series B Cumulative Convertible Redeemable
Preferred Stock (the "Series B Preferred Stock"). Proceeds of approximately
$2,875, net of offering costs, were used for working capital and other general
corporate purposes (the "Preferred Stock Investment"). The initial liquidation
preference is approximately $3.18 per share. The excess of the liquidation
preference over the carrying value is being accreted quarterly over a seven-year
period ending March 1, 2008, by direct charge to accumulated deficit. Dividends
on the Series B Preferred Stock are cumulative, compounding quarterly at a rate
of 10% per annum. Accrued and unpaid dividends are payable in cash. All of the
Series B Preferred Stock shall be convertible at any time at the election of the
holder into a unit (a "Conversion Unit") consisting of (i) one share of 10%
Series C Cumulative Redeemable Preferred Stock (the "Series C Preferred Stock")
and (ii) that number of shares of common stock determined by dividing an amount
equal to approximately $3.18 by an amount equal to the adjusted conversion
price. The intrinsic value of the beneficial conversion feature is $3,000 and is
being accreted ratably over the seven-year period ending March 1, 2008. The
intrinsic value of the beneficial conversion feature accreted for the nine
months ended September 29, 2001 amounted to $251. Dividends on the Series C
Preferred Stock are cumulative, compounding quarterly at a rate of 10% per
annum. Accrued and unpaid dividends are payable in cash. At September 29, 2001,
none of the Series B Preferred Stockholders had exercised the conversion rights.
The Series B Preferred Stock and Series C

                                       14
<PAGE>

                       TBM HOLDINGS INC. AND SUBSIDIARIES
         NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS
                 (In thousands, except share and per share data)


Preferred Stock are equal with respect to dividend and liquidation rights and
are senior to all other equity securities. All of the Series C Preferred Stock
shall be redeemed on the earlier of (i) a qualified public offering, (ii) March
1, 2008 or (iii) a sale, merger or other change of control event. As a result of
the redemption feature, the Series B Preferred Stock is excluded from permanent
equity.

(9)    EARNINGS (LOSS) PER SHARE

Basic earnings (loss) per share are computed by dividing net income (loss)
available to common stockholders by the weighted average number of shares
outstanding during the period. The accretion of the intrinsic value of the
beneficial conversion feature and the accrual of preferred stock dividends have
increased the loss attributable to common stockholders in the calculation of
earnings (loss) per share. If applicable, diluted income per share is determined
on the assumption that outstanding dilutive stock options, warrants and
convertible preferred stock have been exercised and the aggregate proceeds as
defined were used to reacquire common stock using the average price of such
common stock for the period.

At September 29, 2001 and September 30, 2000, 133,146 and 59,630 shares subject
to stock options, respectively, and 1,201,175 shares subject to stock warrants
were not included in the calculation of diluted income (loss) per share, because
to do so would have been anti-dilutive. At September 29, 2001, 944,508 issued
shares of Series B Preferred Stock were also not included in the calculation of
diluted income (loss) per share, because to do so would have been anti-dilutive.

(10)   SUBSEQUENT EVENT

On October 5, 2001, the Company sold certain assets of a product line for $900
in cash, which approximated book value. The proceeds from this sale were used to
pay down the revolving credit loan under Long Reach's Credit Agreement.

(11)   CONTINGENCIES AND COMMITMENTS

The Company is involved in claims and legal actions arising in the ordinary
course of business. In the opinion of management, the ultimate disposition of
these matters will not have a material adverse effect on the Company's
consolidated financial position and results of operations.

Blue Giant has been served with a statement of claim dated March 15, 2001, in an
action brought by Daniel G. Marshall Engineering Corporation ("DGM") pending in
the Ontario, Canada, Superior Court of Justice. The complaint alleges that DGM
entered into a contract with Blue Giant for professional engineering services in
August 1995 and a collateral proposal to redesign certain lift trucks in August
1996. The prior owner of Blue Giant's assets, and not Blue Giant, was the party
to these contracts. DGM claims that Blue Giant no longer has the authority to
use the designs created by DGM or the right to transfer the designs to Blue
Giant's parent company. DGM is claiming damages for breach of contract, breach
of confidential information and unjust enrichment in the aggregate amount of
$2,500, satisfaction of outstanding amounts due under the contracts of
approximately $10, or, in the alternative, an injunction against Blue Giant to
prevent it from using DGM's designs in the manufacture of forklifts. The Company
filed a Statement of Defence on May 11, 2001, denying all causes of action
claimed by DGM. The ultimate outcome of this matter cannot currently be
predicted.

                                       15
<PAGE>


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

      The following discussion is intended to assist in the understanding of the
Company's financial position and results of operations for the three month and
nine month periods ended September 29, 2001 and September 30, 2000. This
discussion should be read in conjunction with consolidated financial statements
and notes thereto included elsewhere herein and the Company's Annual Report on
Form 10-KSB, as amended, for the fiscal year ended December 30, 2000. See also
"Forward-Looking Statements" below.

      The dollar amounts reported in this Part I, Item 2, are reported in
thousands.

Results Of Operations

      During the nine months ended September 29, 2001, the Company experienced
incoming new order bookings rates that were significantly lower than expected.
New order bookings were lower than expectations by 18% to 27% in each of the
Company's operating subsidiaries. The Company believes that the
lower-than-expected bookings are a result of both the fact that it has taken
Long Reach longer than the Company expected to restore customer confidence in
its manufacturing capabilities and the uncertainty in the overall business
economy and the resulting reduction in capital spending for machinery and
equipment by manufacturing and distribution companies. The Company follows
forklift industry data provided by the International Truck Association (ITA) in
order to track industry sales in North America. The ITA reported that orders for
new forklifts booked in the first nine months of 2001 were 39% less than orders
booked during the comparable period in 2000. Both the Long Reach and Presto
Lifts operations have been significantly negatively impacted by this decline. If
booking rates remain lower than expected in the remainder of 2001, this could
have an adverse effect on the Company's operating results and financial
performance. Such effect could further adversely affect carrying values of
certain assets such as goodwill.

      Operating results through February 23, 2000, the date of the acquisition
of Long Reach, reflect interest income generated through the investment of the
proceeds of a private placement of restricted shares of the Company's Common
Stock (the "1999 Private Placement") in short-term government securities.
Operating expenses during such period were costs associated with search
activities required to identify a manufacturing company acquisition, maintaining
a business office and complying with the Company's reporting obligations as a
public company.

      Results for the nine months ended September 30, 2000, include the
operating results of Long Reach for the period February 24, 2000 through
September 30, 2000, and the operating results of Presto Lifts for the period May
16, 2000 through September 30, 2000, consolidated with the expenses incurred by
the Company associated with maintaining a business office and complying with its
reporting obligations as a public company.

      The Company generated net sales of $12,644 and $41,597 and net losses of
$5,295 and $13,512 for the three months and nine months ended September 29,
2001, respectively, compared with net sales of $11,941 and $25,839 and net
losses of $1,917 and $2,928 for the

                                       16
<PAGE>

comparable periods in 2000. For the three months and nine months ended September
29, 2001, gross profit represented 10.1% and 12.1% of net sales, respectively,
and selling, general and administrative expenses represented 26.6% and 27.8% of
net sales, respectively. For the three months and nine months ended September
30, 2000, gross profit represented 14.2% and 18.0% of net sales, respectively,
and selling, general and administrative expenses represented 27.7% and 27.5% of
net sales, respectively.

      During the three months and nine months ended September 29, 2001, the
increase in net sales, cost of sales, and selling, general and administrative
expenses over the corresponding period of the prior year is the result of the
Company's acquisitions of Long Reach on February 23, 2000, the Company's
acquisition of Presto Lifts on May 16, 2000 and its acquisition of Blue Giant on
November 10, 2000 (each of whose results were included for the entire nine month
period in 2001). The decline in gross profit as a percentage of net sales is
attributable to lower than expected net sales in the three months and nine
months ended September 29, 2001. Since the Company had not anticipated the
extent of the sales decline, fixed expenses were not reduced enough to maintain
gross profit as a percentage of net sales. For a discussion about declining
sales in the forklift industry generally, see our discussion above regarding the
report issued by the ITA.

      Interest expense for the three months and nine months ended September 29,
2001 was $396 and $1,258 compared to $330 and $742 for the three months and nine
months ended September 30, 2000, respectively. The increase is due to additional
borrowings incurred as a result of the Long Reach, Presto Lifts and Blue Giant
acquisitions. Other income, net was $28 and $179 for the three months and nine
months ended September 29, 2001, respectively, as compared to $37 and $297 for
the three months and nine months ended September 30, 2000, respectively. Other
income for the nine months ended September 29, 2001 results substantially from
foreign currency transaction gains recognized by Blue Giant while other income
for the three months and nine months ended September 30, 2000 resulted from
investment of excess cash on hand.

      On June 1, 2001, the Company sold its subsidiary located in Adelaide,
Australia for $783 and recognized a loss of $1,097. See footnote 7 to the
condensed consolidated unaudited financial statements included in Part I, Item 1
of this Quarterly Report on Form 10-QSB.

      In the three and nine months ended September 29, 2001, the Company
recorded $2,836 and $4,679, respectively, for impairment of assets. See footnote
5 to the condensed consolidated unaudited financial statements included in Part
I, Item 1 of this Quarterly Report on Form 10-QSB.

Liquidity and Capital Resources

      At September 29, 2001, the Company owed $10,096 under its revolving credit
facilities and $3,735 under its term loan facilities. Long-term debt outstanding
at September 29, 2001 consisted of $3,232 of notes payable to stockholders and
$1,459 under its term loan facilities.

                                       17
<PAGE>

      In connection with its acquisition of Long Reach (the "Long Reach
Merger"), the Company assumed (and subsequently refinanced) Long Reach's
indebtedness to its lender in the amount of $10,921. Long Reach's credit
agreement (the "Long Reach Credit Agreement"), which includes a revolving credit
loan and a term loan, imposes financial and operating covenants on Long Reach.
Except as specifically permitted under the terms of the credit agreement, Long
Reach is prohibited from borrowing money, guaranteeing loans or permitting liens
to be placed on its assets. Long Reach is restricted in its ability to enter
into certain types of transactions, such as mergers, may not sell a substantial
portion of its assets and, unless specifically permitted by the credit
agreement, may not acquire substantially all of the assets of another party.
Long Reach is prohibited from declaring cash dividends (other than to the
Company in an amount equal to its income tax liability) and, in addition, the
credit agreement requires Long Reach to maintain certain financial ratios,
including a leverage ratio and a minimum fixed charge coverage ratio. Also, Long
Reach must maintain a minimum level of net worth and is limited in the amount of
net losses it can sustain during specified periods. On March 31, 2001, the Long
Reach Credit Agreement was amended. As part of this amendment, effective April
1, 2001, the due date of the Long Reach Credit Agreement was advanced from March
31, 2003 to March 31, 2002. As a result of this amendment, the Company will be
required to refinance its Long Reach debt by March 31, 2002. There can be no
assurance that this refinancing can be accomplished.

      As of September 29, 2001, Long Reach was in default of four of its
financial covenants under the Long Reach Credit Agreement. These defaults
occurred during the second quarter of 2001. On September 9, 2001, Long Reach and
its lender modified the terms of the Long Reach Credit Agreement. Pursuant to
these modifications, the lender agreed not to demand repayment of the amounts
outstanding under the Long Reach Credit Agreement before January 31, 2002,
unless a new event of default occurs or the Company does not sell certain assets
by certain specified dates. These modifications also included (i) a reduction in
the revolving credit loan commitment from $8,000 to $6,750 and $3,500 on
September 30, 2001 and December 29, 2001, respectively, (ii) a suspension in
principal payments on the term loan until the earlier of March 31, 2002 or the
date of a demand for repayment of the debt, and (iii) an increase in the
one-time over advance from $350 to $700. This over advance is due and payable on
demand by the bank at any time. All amounts owing to the bank are classified as
current as of September 29, 2001. As of September 29, 2001, Long Reach was in
compliance with its obligations under the modifications to the Long Reach Credit
Agreement. However, no assurance can be given that Long Reach will be able to
continue to comply with its obligations under such modifications or the Long
Reach Credit Agreement.

      In connection with its acquisition of Blue Giant, the Company assumed and
incurred approximately $5,000 of debt secured by Blue Giant's inventory and
assets. The terms of the Blue Giant credit agreement (the "Blue Giant Credit
Agreement"), including amendments, impose financial and operating covenants on
Blue Giant, including a ratio of total debt to net worth, a ratio of senior debt
to earnings, and limiting capital expenditures and corporate distributions. Blue
Giant was in default with certain covenants under the Blue Giant Credit
Agreement at June 30, 2001. On September 26, 2001, the bank issued an amendment
to the Blue Giant Credit Agreement, which included a waiver that effectively
cured the default and amended certain debt covenants. In addition, the amendment
reduced the revolving loan commitment to $4,117 and revised the rate at which
interest accrues on the revolving loan to the bank's prime rate plus 0.625% to
1.25% under differing circumstances. At September 29, 2001, Blue Giant was in
compliance with the revised covenants. Management believes that Blue Giant's
fourth quarter 2001 operating results will allow it to remain in compliance with
the revised

                                       18

<PAGE>

covenants. A copy of these agreements has been filed as Exhibits 10.1 and 10.2
to this Quarterly Report on Form 10-QSB.

      The Company has negative working capital of $3,782 at September 29, 2001.
The Company forecasts that it will need to raise additional funds to meet the
capital expenditures and operating needs included in its business plan for 2001.
The Company is actively seeking to raise these funds and is exploring various
alternatives to address its short-term and long-term capital needs. These
alternatives may include raising additional funds through various financing
arrangements, restructuring its existing indebtedness, modifying its business
plan, sales of assets, or a combination of the foregoing. Many factors, some of
which may be beyond the Company's control, may affect the Company's ability to
resolve its short-term and long-term capital needs. These factors include the
willingness of the holders of the debt securities and banks to agree to any
restructuring of the Company's indebtedness that the Company may seek; the
availability of sufficient additional financing on terms acceptable to the
Company; and prevailing and perceived economic conditions, both in general and
with respect to the Company's industry. In addition to its estimated 2001 cash
requirements, the Company must raise additional capital or generate sufficient
operating cash flow to satisfy its debt service obligations on its Long Reach
Credit Agreement, which matures on March 31, 2002.

      The Company's financial statements have been prepared on a going-concern
basis which contemplates the realization of assets and the satisfaction of
liabilities in the normal course of business. While management currently
believes it will obtain additional funds, there can be no assurance that
additional capital will be available to the Company on terms that comply with
the Company's credit agreements and indebtedness or on terms that management
finds acceptable. There can be no assurance that the Company's lenders will not
take action to enforce their rights under the credit agreements or that the
Company will be able to generate sufficient cash flow or obtain sufficient
additional financing to meet its debt service requirements, or continue to
operate as a going-concern.

      Net cash used in operating activities was $2,235 for the nine months ended
September 29, 2001, compared with $3,621 for the nine months ended September 30,
2000. The net loss for the nine months ended September 29, 2001 of $13,512
($6,270 net of non-cash expenses), was partially offset by a reduction in
working capital components for such period of $4,035. During the nine months
ended September 30, 2000, use of cash in operating activities includes the net
loss of $2,928 ($2,061 net of non-cash expenses), combined with an increase in
the Company's working capital components of $1,560 substantially due to a $1,194
reduction in payables as the Company brought suppliers payables current and a
$695 decrease in accruals related to the Long Reach Merger.

      Net cash provided by (used in) investing activities was $472 for the nine
months ended September 29, 2001, compared with ($13,641) for the nine months
ended September 30, 2000. The cash provided by investing activities in 2001
results substantially from $707 cash proceeds from the sale of the Adelaide,
Australia subsidiary while the usage in 2000 reflects primarily the acquisitions
of Long Reach on February 23, 2000, and Presto Lifts on May 16, 2000.

      Net cash provided by financing activities was $163 for the nine months
ended September

                                       19

<PAGE>

29, 2001, as compared to $9,677 for the nine months ended September 30, 2000.
Net cash provided by financing activities for the nine months ended September
29, 2001 reflects primarily the issuance of 10% Series B Cumulative Convertible
Redeemable Preferred Stock for net cash proceeds of $2,875 offset by a net
decrease in the Company's borrowings of $1,637 and a $1,075 reduction in the
bank overdraft payable during the period. Net cash provided by financing
activities for the nine months ended September 30, 2000 reflects the issuance of
Common Stock of $8,000 in connection with the 1999 Private Placement and an
increase in borrowings of $2,196 to fund changes in working capital during the
period, after giving effect to the change in bank overdraft payable for the
period.

      Cash received from the issuance of Common Stock was $8,000 for the nine
months ended September 30, 2000. Issuance of Common Stock for the nine months
ended September 30, 2000 reflects the Company's private placement of 916,667
shares of its Common Stock at $6.00 per share and the exercise of a first call
option pursuant to which a stockholder purchased 500,000 shares of Common Stock
at an exercise price of $5.00 per share, each on February 23, 2000. In the nine
months ended September 30, 2000, the Company also issued 500,000 shares of its
Common Stock, valued at $6.00 per share, in connection with its acquisition of
Long Reach on February 23, 2000.

      Cash received from the issuance of Preferred Stock was $2,875, net of
offering costs, for the nine months ended September 29, 2001, which reflects the
Company's private placement of 944,508 shares of its 10% Series B Cumulative
Convertible Redeemable Preferred Stock on March 16, 2001. As a result of losses
incurred in the year ended December 30, 2000, it was necessary for the Company
to raise additional funds for working capital and general business purposes of
the Company and its subsidiaries during the first half of 2001.

      Capital expenditures for property, plant and equipment, net, totaled $487
for the nine months ended September 29, 2001. Total capital expenditures are
currently expected to aggregate $550 for fiscal 2001.

Quantitative And Qualitative Disclosures

      Market Risk. The Company is exposed to market risks. Market risk is the
potential loss arising from adverse changes in market prices and rates. The
Company does not enter into derivative instruments. The Company's market risks
could arise from changes in interest rates and foreign currency exchange rates.

      Interest rate risk. The Company is subject to market risk exposure related
to changes in interest rates. Accordingly, the Company's net income is affected
by changes in interest rates. Assuming the Company's current level of
borrowings, a 100 basis point increase in interest rates under these borrowings
would have increased the Company's net loss for the three months and nine months
ended September 29, 2001 by approximately $35 and $104, respectively. In the
event of an adverse change in interest rates, the Company could take action to
mitigate its exposure; however, due to the uncertainty of the actions that would
be taken and their possible effects, this analysis assumes no such actions.
Furthermore, this analysis does not consider the

                                       20
<PAGE>

effects of the change in the level of overall economic activity that could exist
in such an environment.

      Foreign exchange currency risk. The Company's earnings are affected by
foreign exchange rate fluctuations. As of September 29, 2001, the Company had
foreign operations in Canada. The translation adjustment during the nine months
ended September 29, 2001 was a loss of $9, which was recognized in accumulated
other comprehensive income (loss) in the condensed consolidated unaudited
balance sheet included herein.

Recent Accounting Pronouncements

      In July 2001, the FASB issued Statement No. 141, "Business Combinations",
and Statement No. 142, "Goodwill and Other Intangible Assets". Statement 141
requires that the purchase method of accounting be used for all business
combinations initiated after June 30, 2001 as well as all purchase method
business combinations completed after June 30, 2001. Statement 142 will require
that goodwill and intangible assets with indefinite useful lives no longer be
amortized, but instead tested for impairment at least annually in accordance
with the provisions of Statement 142. Statement 142 will also require that
intangible assets with definite useful lives be amortized over their respective
estimated useful lives to their estimated residual values, and reviewed for
impairment in accordance with SFAS No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of".

      The Company is required to adopt the provisions of Statement 141
immediately, and Statement 142 effective December 30, 2001. Upon adoption of
Statement 142, the Company will be required to reassess the useful lives and
residual values of all intangible assets acquired in purchase business
combinations, and make any necessary amortization period adjustments by the end
of the first interim period after adoption. In addition, to the extent an
intangible asset is identified as having an indefinite useful life, the Company
will be required to test the intangible asset for impairment in accordance with
the provisions of Statement 142 within the first interim period. Any impairment
loss will be measured as of the date of adoption and recognized as the
cumulative effect of a change in accounting principle in the first interim
period.

      As of September 29, 2001, the Company has unamortized goodwill in the
amount of $10,019 which will be subject to the transition provisions of
Statements 141 and 142. Amortization expense related to goodwill was $469 and
$542 for the year ended December 30, 2000 and the nine months ended September
29, 2001, respectively. Because of the extensive effort needed to comply with
adopting Statements 141 and 142, it is not practicable to reasonably estimate
the impact of adopting these Statements on the Company's financial statements at
the date of this report, including whether any transitional impairment losses
will be required to be recognized as the cumulative effect of a change in
accounting principle.

      In August 2001, the FASB issued Statement on Financial Accounting
Standards No. 144, "Accounting for the Impairment or Disposal of Long-Lived
Assets," (SFAS 144) which the Company is required to adopt effective December
30, 2001. SFAS 144 requires that long-lived assets to be disposed of by sale be
measured at the lower of carrying amount or fair value less

                                       21
<PAGE>

cost to sell, whether reported in continuing operations or in discontinued
operations. SFAS 144 broadens the reporting of discontinued operations to
include all components of an entity with operations that can be distinguished
from the rest of the entity in a disposal transaction. The impact, if any, of
SFAS 144, on the financial position or results of operations has not yet been
determined.

FORWARD-LOOKING STATEMENTS

      Statements contained in this Quarterly Report on Form 10-QSB that are not
purely historical are forward-looking statements and are being provided in
reliance upon the "safe harbor" provisions of the Private Securities Litigation
Reform Act of 1995. Such forward-looking statements may be identified, without
limitation, by use of the words "forecasts," "expects," "anticipates,"
"believes," "estimates," "intends" and similar expressions. All forward-looking
statements are made as of the date hereof and are based on current management
expectations and information available to the Company as of such date. The
Company assumes no obligation to update any forward-looking statement. It is
important to note that actual results could differ materially from historical
results or those contemplated in the forward-looking statements. Forward-looking
statements involve a number of risks and uncertainties and may include trend
information. Readers are cautioned not to place undue reliance on any such
forward-looking statements.

Part II:  Other Information

ITEM 1.   LEGAL PROCEEDINGS.

     None.

ITEM 2.   CHANGES IN SECURITIES AND USE OF PROCEEDS.

     None.

ITEM 3.   DEFAULTS UPON SENIOR SECURITIES.

      As of September 29, 2001, the Company was in default of certain financial
covenants under the Long Reach Credit Agreement. For a discussion of these
defaults, see "Liquidity and Capital Resources" in Management's Discussion and
Analysis of Financial Condition and Results of Operations in Part I, Item 2 of
this Quarterly Report on Form 10-QSB.

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

ITEM 5.   OTHER INFORMATION.

     None.


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<PAGE>


ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K.

     (a)   EXHIBITS

     Exhibit No.    Description
     -----------    -----------

      10.1          Revised Offer to Finance, dated as of September 26, 2001,
                    between Blue Giant Equipment Corporation and National Bank
                    of Canada

      10.2          Forbearance Agreement, dated as of October 19, 2001, between
                    Blue Giant Equipment Corporation and National Bank of Canada

      10.3          Asset Purchase Agreement, dated as of October 5, 2001,
                    between Long Reach, Inc. and PCC Olofsson Inc.

     (b)            REPORTS ON FORM 8-K

                    None.



                                       23
<PAGE>



                                   SIGNATURES

      In accordance with the requirements of the Exchange Act, the registrant
has caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.

                                        TBM HOLDINGS INC.


Date:  November 13, 2001                By: /s/ Patrick H. Peyton
                                            ---------------------
                                            Patrick H. Peyton
                                            Chief Financial Officer and Vice
                                            President-Finance (Principal
                                            Financial Officer)

                                       24
<PAGE>



                                   EXHIBIT INDEX

Exhibit No.   Description

10.1          Revised Offer to Finance, dated as of September 26, 2001, between
              Blue Giant Equipment Corporation and National Bank of Canada

10.2          Forbearance Agreement, dated as of October 19, 2001, between Blue
              Giant Equipment Corporation and National Bank of Canada

10.3          Asset Purchase Agreement, dated as of October 5, 2001, between
              Long Reach, Inc. and PCC Olofsson Inc.