CMCO 10Q 09.30.2013



Columbus McKinnon Corporation
(Exact name of registrant as specified in its charter)

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

140 John James Audubon Parkway, Amherst, NY	14228-1197
(Address of principal executive offices)	(Zip code)

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

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



	September 30, 2013			March 31, 2013
	(unaudited)
ASSETS:	(In thousands)
Current assets:
Cash and cash equivalents	$	111,819		$	121,660
Trade accounts receivable	76,852			80,224
Inventories	106,392			94,189
Prepaid expenses and other	19,082			17,905
Total current assets	314,145			313,978
Property, plant, and equipment, net	69,112			65,698
Goodwill	111,901			105,354
Other intangibles, net	12,906			13,395
Marketable securities	22,612			23,951
Deferred taxes on income	39,084			37,205
Other assets	6,491			7,286
Total assets	$	576,251		$	566,867

LIABILITIES AND SHAREHOLDERS' EQUITY:
Current liabilities:
Trade accounts payable	$	29,466		$	34,329
Accrued liabilities	49,319			48,884
Current portion of long term debt	1,119			1,024
Total current liabilities	79,904			84,237
Senior debt, less current portion	2,327			2,641
Subordinated debt	148,549			148,412
Other non current liabilities	86,906			91,590
Total liabilities	317,686			326,880
Shareholders' equity:
Voting common stock; 50,000,000 shares authorized; 19,692,580 and 19,507,939 shares issued and outstanding	197			195
Additional paid in capital	194,634			192,308
Retained earnings	118,333			104,191
ESOP debt guarantee	(346		)	(552		)
Accumulated other comprehensive loss	(54,253		)	(56,155		)
Total shareholders' equity	258,565			239,987
Total liabilities and shareholders' equity	$	576,251		$	566,867



	Three Months Ended						Six Months Ended
	September 30, 2013			September 30, 2012			September 30, 2013			September 30, 2012
	(In thousands, except per share data)
Net sales	$	138,852		$	146,472		$	277,743		$	299,485
Cost of products sold	94,592			104,070			189,992			213,259
Gross profit	44,260			42,402			87,751			86,226

Selling expenses	17,281			16,447			34,028			32,814
General and administrative expenses	14,167			12,546			27,017			26,724
Amortization of intangibles	526			489			985			988
	31,974			29,482			62,030			60,526

Income from operations	12,286			12,920			25,721			25,700
Interest and debt expense	3,372			3,505			6,743			7,004
Investment income	(276		)	(382		)	(492		)	(662		)
Foreign currency exchange loss (gain)	195			190			420			(146		)
Other income, net	(1,261		)	(173		)	(1,172		)	(495		)
Income before income tax expense	10,256			9,780			20,222			19,999
Income tax expense	3,134			1,528			6,080			3,311
Net income	7,122			8,252			14,142			16,688
Retained earnings - beginning of period	111,211			34,331			104,191			25,895
Retained earnings - end of period	$	118,333		$	42,583		$	118,333		$	42,583

Average basic shares outstanding	19,655			19,419			19,587			19,384
Average diluted shares outstanding	19,959			19,581			19,866			19,546

Basic income per share:
Net income	$	0.36		$	0.42		$	0.72		$	0.86

Diluted income per share:
Net income	$	0.36		$	0.42		$	0.71		$	0.85



	Three Months Ended						Six Months Ended
	September 30, 2013			September 30, 2012			September 30, 2013			September 30, 2012
	(In thousands)
Net income	$	7,122		$	8,252		$	14,142		$	16,688
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments	3,065			2,517			2,935			(2,678		)
Change in derivatives qualifying as hedges, net of taxes of $82, ($31), $108, and ($69)	105			(91		)	191			(188		)
Change in pension liability and postretirement obligation	(115		)	(51		)	(120		)	34
Adjustments for unrealized gain on investments:
Unrealized holding gain (loss) arising during the period, net of taxes of $158, $0, ($76), and $0	292			521			(142		)	401
Reclassification adjustment for (gain) loss included in net income, net of taxes of $392, $0, $518, and $0	(727		)	(170		)	(962		)	(253		)
Net change in unrealized (gain) loss on investments	(435		)	351			(1,104		)	148
Total other comprehensive income (loss)	2,620			2,726			1,902			(2,684		)
Comprehensive income	$	9,742		$	10,978		$	16,044		$	14,004



	Six Months Ended
	September 30, 2013			September 30, 2012
	(In thousands)
OPERATING ACTIVITIES:
Net income	$	14,142		$	16,688
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	6,324			6,221
Deferred income taxes and related valuation allowance	(1,249		)	155
Gain on sale of real estate, investments, and other	(1,543		)	(315		)
Stock-based compensation	1,758			1,649
Amortization of deferred financing costs and discount on subordinated debt	436			192
Changes in operating assets and liabilities, net of effects of business acquisition:
Trade accounts receivable	5,074			4,618
Inventories	(10,433		)	(7,231		)
Prepaid expenses	(1,024		)	(3,477		)
Other assets	684			445
Trade accounts payable	(5,366		)	(6,002		)
Accrued and non-current liabilities	(7,094		)	(5,369		)
Net cash provided by operating activities	1,709			7,574

INVESTING ACTIVITIES:
Proceeds from sale of marketable securities	3,724			3,101
Purchases of marketable securities	(2,597		)	(1,936		)
Capital expenditures	(8,033		)	(4,080		)
Purchase of business	(5,847		)	—
Proceeds from sale of assets	—			1,482
Net cash used for investing activities	(12,753		)	(1,433		)

FINANCING ACTIVITIES:
Proceeds from exercise of stock options	838			219
Net payments under lines-of-credit	—			(51		)
Repayment of debt	(295		)	(393		)
Change in ESOP guarantee	206			213
Net cash provided by (used for) financing activities	749			(12		)
Effect of exchange rate changes on cash	454			(675		)
Net change in cash and cash equivalents	(9,841		)	5,454
Cash and cash equivalents at beginning of period	121,660			89,473
Cash and cash equivalents at end of period	$	111,819		$	94,927

Supplementary cash flow data:
Interest paid	$	6,547		$	6,898
Income taxes paid, net of refunds	$	7,465		$	3,591

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the financial position of Columbus McKinnon Corporation (the Company) at September 30, 2013, the results of its operations for the three and six month periods ended September 30, 2013 and September 30, 2012, and cash flows for the six months ended September 30, 2013 and September 30, 2012, have been included. Results for the period ended September 30, 2013 are not necessarily indicative of the results that may be expected for the year ending March 31, 2014. The balance sheet at March 31, 2013 has been derived from the audited consolidated financial statements at that date, but does not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements. For further information, refer to the consolidated financial statements and footnotes thereto included in the Columbus McKinnon Corporation annual report on Form 10-K for the year ended March 31, 2013.

The Company is a leading designer, marketer and manufacturer of material handling products and services which efficiently and safely move, lift, position and secure material. Key products include hoists, rigging tools, cranes, and actuators. The Company’s material handling products are sold globally, principally to third party distributors through diverse distribution channels, and to a lesser extent directly to end-users. During the three and six months ended September 30, 2013, approximately 57% and 58% of sales, respectively were to customers in the U.S.

On June 1, 2013, the Company acquired 100% of the outstanding common shares of Hebetechnik Gesellschaft m.b.H (“Hebetechnik”) located in Austria, a privately owned company with annual sales of approximately $10,000,000. Hebetechnik has been a value-added partner of the Company in the lifting industry in the Austrian market for over 20 years. The results of Hebetechnik are included in the Company’s condensed consolidated financial statements from the date of acquisition. The acquisition of Hebetechnik is not considered significant to the Company’s consolidated financial position and results of operations.

The acquisition was funded with existing cash. The purchase price has been preliminarily allocated to the assets acquired and liabilities assumed as of the date of acquisition. The excess consideration of $5,324,000 was recorded as goodwill. The identifiable intangible asset consists of order backlog at the date of the acquisition and is estimated to have a three month useful life. Goodwill recorded in connection with the acquisition will be deductible for Austrian tax purposes. The preliminary assignment of purchase consideration to the assets acquired and liabilities assumed, pending finalization of the determination of the fair values of the net assets acquired, is as follows (in thousands):

Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 820 “Fair Value Measurements and Disclosures” establishes the standards for reporting financial assets and liabilities and nonfinancial assets and liabilities that are recognized or disclosed at fair value on a recurring basis (at least annually). Under these standards, fair value

ASC Topic 820-10-35-37 establishes a hierarchy for inputs that may be used to measure fair value. Level 1 is defined as quoted prices in active markets that the Company has the ability to access for identical assets or liabilities. The fair value of the Company’s marketable securities is based on Level 1 inputs. Level 2 is defined as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets. Level 3 inputs are unobservable inputs based on the Company’s own assumptions used to measure assets and liabilities at fair value. The Company primarily uses readily observable market data in conjunction with internally developed discounted cash flow valuation models when valuing its derivative portfolio and, consequently, the fair value of the Company’s derivatives is based on Level 2 inputs. The Company uses quoted prices in an inactive market when valuing its Subordinated Debt, represented by the 7 7/8% Notes due 2019, registered under the Securities Act of 1933, as amended (7 7/8% Notes) and, consequently, the fair value is based on Level 2 inputs. The carrying values of the Company’s senior debt and notes payable to banks approximate fair value based on current market interest rates for debt instruments of similar credit standing and, consequently, their fair values are based on Level 2 inputs. As of September 30, 2013 and March 31, 2013, the Company’s assets and liabilities measured or disclosed at fair value on recurring bases were as follows (in thousands):



	Fair value measurements at reporting date using
	September 30,			Quoted prices in active markets for identical assets		Significant other observable inputs			Significant unobservable inputs
Description	2013			(Level 1)		(Level 2)			(Level 3)
Assets/(Liabilities) measured at fair value:
Marketable securities	$	22,612		$	22,612	$	—		$	—
Derivative liabilities	(222		)	—		(222		)	—

Liabilities disclosed at fair value:
Subordinated debt	$	(160,125	)	$	—	$	(160,125	)	$	—
Senior debt	(3,446		)	—		(3,446		)	—



	Fair value measurements at reporting date using
	March 31,			Quoted prices in active markets for identical assets		Significant other observable inputs			Significant unobservable inputs
Description	2013			(Level 1)		(Level 2)			(Level 3)
Assets/(Liabilities) measured at fair value:
Marketable securities	$	23,951		$	23,951	$	—		$	—
Derivative liabilities	(512		)	—		(512		)	—
Other equity investments	1,508			1,508		—			—

Liabilities disclosed at fair value:
Subordinated debt	$	(160,500	)	$	—	$	(160,500	)	$	—
Senior debt	(3,665		)	—		(3,665		)	—

the assets acquired and liabilities assumed relied upon fair value measurements based primarily on Level 3 inputs. The valuation techniques used to allocate fair values to working capital items; property, plant, and equipment; and identifiable intangible assets included the cost approach, market approach, and other income approaches. The valuation techniques relied on a number of inputs which included the cost and condition of property, plant, and equipment and forecasted net sales and income.

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

All of the Company’s marketable securities, which consist of equity securities and fixed income securities, have been classified as available-for-sale securities and are therefore recorded at their fair values with the unrealized gains and losses, net of tax, reported in accumulated other comprehensive loss in the shareholders’ equity section of the balance sheet unless unrealized losses are deemed to be other than temporary. In such instances, the unrealized losses are reported in the consolidated statements of operations and retained earnings within investment income. Estimated fair value is based on published trading values at the balance sheet dates. The cost of securities sold is based on the specific identification method. Interest and dividend income are included in investment income in the consolidated statements of operations and retained earnings.

In accordance with ASC Topic 320-10-35-30 “Investments – Debt & Equity Securities – Subsequent Measurement,” the Company reviews its marketable securities for declines in market value that may be considered other-than-temporary. The Company generally considers market value declines to be other-than-temporary if there are declines for a period longer than six months and in excess of 20% of original cost, or when other evidence indicates impairment. We also consider the nature of the underlying investments, our intent and ability to hold the investments until their market values recover to costs, and other market conditions in making this assessment. There were no other-than-temporary impairments for the three and six months ended September 30, 2013 or September 30, 2012.

In addition to the above, during the three and six months ended September 30, 2013 the Company sold certain equity securities previously recorded on the Condensed Consolidated Balance Sheets in prepaid expenses and other resulting in a gain of $1,028,000 and $1,354,000, respectively. This gain has been recorded within other (income) expense, net in the condensed consolidated statements of operations and retained earnings.

Goodwill is not amortized but is tested for impairment at least annually, in accordance with the provisions of ASC Topic 350-20-35-1. Goodwill impairment is deemed to exist if the net book value of a reporting unit exceeds its estimated fair value. The fair value of a reporting unit is determined using a discounted cash flow methodology. The Company’s reporting units are determined based upon whether discrete financial information is available and reviewed regularly, whether those units constitute a business, and the extent of economic similarities between those reporting units for purposes of aggregation. The Company’s reporting units identified under ASC Topic 350-20-35-33 are at the component level, or one level below the reporting segment level as defined under ASC Topic 280-10-50-10 “Segment Reporting – Disclosure.” The Company has four reporting units. Only two of the four reporting units carry goodwill at September 30, 2013 and March 31, 2013.

When we evaluate the potential for goodwill impairment, we assess a range of qualitative factors including, but not limited to, macroeconomic conditions, industry conditions, the competitive environment, changes in the market for our products and services, regulatory and political developments, entity specific factors such as strategy and changes in key personnel and overall financial performance. If, after completing this assessment, it is determined that it is more likely than not that the fair value of a reporting unit is less than its carrying value, we proceed to a two-step impairment test.

In accordance with ASC Topic 350-20-35-3, the measurement of impairment of goodwill consists of two steps. In the first step, the Company compares the fair value of each reporting unit to its carrying value. As part of the impairment analysis, the Company determines the fair value of each of its reporting units with goodwill using the income approach. The income approach uses a discounted cash flow methodology to determine fair value. This methodology recognizes value based on the expected receipt of future economic benefits. Key assumptions in the income approach include a free cash flow projection, an estimated discount rate, a long-term growth rate and a terminal value. These assumptions are based upon the Company’s historical experience, current market trends and future expectations.



	September 30, 2013							March 31, 2013
	Gross Carrying Amount		Accumulated Amortization			Net		Gross Carrying Amount		Accumulated Amortization			Net
Trademark	$	5,863	$	(1,606	)	$	4,257	$	5,556	$	(1,370	)	$	4,186
Customer relationships	14,904		(6,922		)	7,982		14,166		(5,894		)	8,272
Other	1,043		(376		)	667		1,235		(298		)	937
Total	$	21,810	$	(8,904	)	$	12,906	$	20,957	$	(7,562	)	$	13,395

The Company uses derivative instruments to manage selected foreign currency exposures. The Company does not use derivative instruments for speculative trading purposes. All derivative instruments must be recorded on the balance sheet at fair value. For derivatives designated as cash flow hedges, the effective portion of changes in the fair value of the derivative is recorded as accumulated other comprehensive gain (loss), or “AOCL”, and is reclassified to earnings when the underlying transaction has an impact on earnings. The ineffective portion of changes in the fair value of the derivative is reported in foreign currency exchange loss (gain) in the Company’s condensed consolidated statement of operations and retained earnings. For derivatives not classified as cash flow hedges, all changes in market value are recorded as a foreign currency exchange loss (gain) in the Company’s condensed consolidated statements of operations and retained earnings.

The Company has foreign currency forward agreements in place to hedge changes in the value of recorded foreign currency liabilities due to changes in foreign exchange rates at the settlement date. The notional amount of those derivatives is $3,532,000 and all contracts mature within twelve months. These contracts are marked to market each balance sheet date and are not designated as hedges.

The Company has foreign currency forward agreements that are designated as cash flow hedges to hedge a portion of forecasted inventory purchases and sales, including multi-year contracts related to capital project sales, denominated in a foreign currency. The notional amount of those derivatives is $8,053,000 and all contracts mature within twelve months of September 30, 2013.

The Company is exposed to credit losses in the event of non performance by the counterparties on its financial instruments. All counterparties have investment grade credit ratings. The Company anticipates that these counterparties will be able to fully satisfy their obligations under the contracts. The Company has derivative contracts with three different counterparties as of September 30, 2013.



September 30,	Derivatives Designated as Cash Flow Hedges	Amount of Gain or (Loss) Recognized in Other Comprehensive Income (Loss) on Derivatives (Effective Portion)			Location of Gain or (Loss) Recognized in Income on Derivatives	Amount of Gain or (Loss) Reclassified from AOCL into Income (Effective Portion)
2013	Foreign exchange contracts	$	25		Cost of products sold	$	(80	)
2012	Foreign exchange contracts	(68		)	Cost of products sold	24



September 30,	Derivatives Designated as Cash Flow Hedges	Amount of Gain or (Loss) Recognized in Other Comprehensive Income (Loss) on Derivatives (Effective Portion)			Location of Gain or (Loss) Recognized in Income on Derivatives	Amount of Gain or (Loss) Reclassified from AOCL into Income (Effective Portion)
2013	Foreign exchange contracts	$	116		Cost of products sold	$	(75	)
2012	Foreign exchange contracts	(73		)	Cost of products sold	116



		Fair Value of Asset (Liability)
Derivatives Designated as Hedging Instruments	Balance Sheet Location	September 30, 2013			March 31, 2013
Foreign exchange contracts	Other Assets	$	63		$	8
Foreign exchange contracts	Accrued Liabilities	$	(207	)	$	(511	)

Derivatives Not Designated as Hedging Instruments	Balance Sheet Location	September 30, 2013			March 31, 2013
Foreign exchange contracts	Other Assets	$	—		$	95
Foreign exchange contracts	Accrued Liabilities	$	(78	)	$	(104	)

Provided there is no default, the Company may request an increase in the availability of the New Revolving Credit Facility by an amount not exceeding $75,000,000, subject to lender approval. The unused portion of the New Revolving Credit Facility totaled $91,523,000 net of outstanding borrowings of $0 and outstanding letters of credit of $8,477,000 as of September 30, 2013. The outstanding letters of credit at September 30, 2013 consisted of $3,788,000 in commercial letters of credit and $4,689,000 of standby letters of credit. Interest on the revolver is payable at varying Eurodollar rates based on LIBOR plus an applicable margin of 100 basis points or at a Base Rate (equivalent to a fluctuating rate per annum equal to the higher of (a) the Federal Funds Rate plus 1/2 of 1% and (b) the rate of interest in effect for such day as publicly announced from time to time by Bank of America as its “prime rate.”) plus 0 basis points. The applicable margin is determined based on the pricing grid in the New Revolving Credit Facility which varies based on the Company’s total leverage ratio at September 30, 2013. The New Revolving Credit Facility is secured by all U.S. inventory, receivables, equipment, real property, subsidiary stock (limited to 65% of non-U.S. subsidiaries) and intellectual property.

The corresponding credit agreement associated with the New Revolving Credit Facility places certain debt covenant restrictions on the Company, including certain financial requirements and restrictions on dividend payments, with which the Company was in compliance as of September 30, 2013. Key financial covenants include a minimum fixed charge coverage ratio of 1.25x, a maximum total leverage ratio, net of cash, of 3.50x and maximum annual capital expenditures of $30,000,000.

In connection with the execution of the New Revolving Credit Facility, it was determined that the borrowing capacity of each lender participating in this new agreement exceeded their borrowing capacities prior to the amendment. As a result, unamortized deferred financing costs associated with the agreement prior to its amendment remain deferred and are being amortized over the term of the New Revolving Credit Facility. Fees and other costs paid to execute the New Revolving Credit Facility totaling $684,000 were recorded as additional deferred financing costs and are being amortized over the term of the New Revolving Credit Facility.

At March 31, 2012, the Company had entered into an amended, restated and expanded revolving credit facility dated December 31, 2009. The Revolving Credit Facility provided availability up to a maximum of $85,000,000 and had an initial term ending December 31, 2013. The Revolving Credit Facility was replaced by the New Revolving Credit Facility on October 19, 2012. On January 25, 2011, the Company issued $150,000,000 principal amount of 7 7/8% Senior Subordinated Notes due 2019 in a private placement pursuant to Rule 144A under the Securities Act of 1933, as amended (Unregistered 7 7/8% Notes). The offering price of the Unregistered 7 7/8% Notes was 98.545% of par after adjustment for original issue discount.

Provisions of the Unregistered 7 7/8% Notes include, without limitation, restrictions on indebtedness, asset sales, and dividends and other restricted payments. Until February 1, 2014, the Company may redeem up to 35% of the outstanding Unregistered 7 7/8% Notes at a redemption price of 107.875% with the proceeds of equity offerings, subject to certain restrictions. On or after February 1, 2015, the Unregistered 7 7/8% Notes are redeemable at the option of the Company, in whole or in part, at a redemption price of 103.938%, reducing to 101.969% and 100% on February 1, 2016 and February 1, 2017, respectively and are due February 1, 2019. In the event of a Change of Control (as defined in the indenture for such notes), each holder of the Unregistered 7 7/8% Notes may require the Company to repurchase all or a portion of such holder’s Unregistered 7 7/8% Notes at a purchase price equal to 101% of the principal amount thereof. The Unregistered 7 7/8% Notes are guaranteed by certain existing and future U.S. subsidiaries and are not subject to any sinking fund requirements.

unsecured credit lines totaled approximately $6,763,000, of which $0 was drawn. In addition, unsecured lines of $12,511,000 were available for bank guarantees issued in the normal course of business of which $6,296,000 was utilized. Finally, in addition to the above facilities, one of our foreign subsidiaries has a credit line secured by a parent company guarantee. This credit line provides availability of up to $980,000, of which $0 was drawn as of September 30, 2013.



	Three months ended						Six months ended
	September 30, 2013			September 30, 2012			September 30, 2013			September 30, 2012
Service costs	$	629		$	613		$	1,253		$	1,226
Interest cost	2,418			2,469			4,827			4,938
Expected return on plan assets	(3,157		)	(2,803		)	(6,314		)	(5,606		)
Net amortization	1,582			1,497			3,159			2,995
Net periodic pension cost	$	1,472		$	1,776		$	2,925		$	3,553



	Three Months Ended				Six Months Ended
	September 30, 2013		September 30, 2012		September 30, 2013		September 30, 2012
Numerator for basic and diluted earnings per share:
Net income	$	7,122	$	8,252	$	14,142	$	16,688

Denominators:
Weighted-average common stock outstanding – denominator for basic EPS	19,655		19,419		19,587		19,384
Effect of dilutive employee stock options and other share-based awards	304		162		279		162
Adjusted weighted-average common stock outstanding and assumed conversions – denominator for diluted EPS	19,959		19,581		19,866		19,546

Stock options and performance shares with respect to 17,000 and 290,000 common shares for the three month periods ended September 30, 2013 and 2012, respectively, and 47,000 and 290,000 common shares for the six month periods ended September 30, 2013 and 2012, respectively were not included in the computation of diluted earnings per share for September 30, 2013 and 2012, respectively because they were antidilutive.

On July 26, 2010, the shareholders of the Company approved the 2010 Long Term Incentive Plan (“LTIP”). The Company grants share based compensation to eligible participants under the LTIP. The total number of shares of common stock with respect to which awards may be granted under the plan is 1,250,000 including shares not previously authorized for issuance under any of the Prior Stock Plans and any shares not issued or subject to outstanding awards under the Prior Stock Plans.

Like many industrial manufacturers, the Company is involved in asbestos-related litigation. In continually evaluating costs relating to its estimated asbestos-related liability, the Company reviews, among other things, the incidence of past and recent claims, the historical case dismissal rate, the mix of the claimed illnesses and occupations of the plaintiffs, its recent and historical resolution of the cases, the number of cases pending against it, the status and results of broad-based settlement discussions, and the number of years such activity might continue. Based on this review, the Company has estimated its share of liability to defend and resolve probable asbestos-related personal injury claims. This estimate is highly uncertain due to the limitations of the available data and the difficulty of forecasting with any certainty the numerous variables that can affect the range of the liability. The Company will continue to study the variables in light of additional information in order to identify trends that may become evident and to assess their impact on the range of liability that is probable and estimable.

Based on actuarial information, the Company has estimated its asbestos-related aggregate liability including related legal costs to range between $8,000,000 and $13,000,000 using actuarial parameters of continued claims for a period of 18 to 30 years from September 30, 2013. The Company's estimation of its asbestos-related aggregate liability that is probable and estimable, in accordance with U.S. generally accepted accounting principles approximates $10,400,000, which has been reflected as a liability in the consolidated financial statements as of September 30, 2013. The recorded liability does not consider the impact of any potential favorable federal legislation. This liability will fluctuate based on the uncertainty in the number of future claims that will be filed and the cost to resolve those claims, which may be influenced by a number of factors, including the outcome of the ongoing

broad-based settlement negotiations, defensive strategies, and the cost to resolve claims outside the broad-based settlement program. Of this amount, management expects to incur asbestos liability payments of approximately $2,400,000 over the next 12 months. Because payment of the liability is likely to extend over many years, management believes that the potential additional costs for claims will not have a material effect on the financial condition of the Company or its liquidity, although the effect of any future liabilities recorded could be material to earnings in a future period.

The Company is also involved in other unresolved legal actions that arise in the normal course of business. The most prevalent of these unresolved actions involve disputes related to product design, manufacture and performance liability. The Company's estimation of its product-related aggregate liability that is probable and estimable, in accordance with U.S. generally accepted accounting principles approximates $5,900,000, which has been reflected as a liability in the consolidated financial statements as of September 30, 2013. In some cases, we cannot reasonably estimate a range of loss because there is insufficient information regarding the matter. Management believes that the potential additional costs for claims will not have a material effect on the financial condition of the Company or its liquidity, although the effect of any future liabilities recorded could be material to earnings in a future period.

Income tax expense as a percentage of income from continuing operations before income tax expense was 31% and 16% in the quarter ended September 30, 2013 and September 30, 2012, respectively and 30% and 17% for the six-month periods then ended, respectively. Typically these percentages vary from the U.S. statutory rate primarily due to varying effective tax rates at the Company's foreign subsidiaries, and the jurisdictional mix of taxable income for these subsidiaries. We estimate that the effective tax rate related to continuing operations will be approximately 27% to 32% for fiscal 2014.

For the three and six month periods ended September 30, 2012, income taxes as a percentage of income before income taxes were not reflective of U.S. statutory rates. The Company had a valuation allowance of $53,325,000 at March 31, 2012 due to the uncertainty of whether U.S. federal and certain foreign net operating loss carryforwards ("NOLs") and deferred tax assets might ultimately be realized. In fiscal year 2013, we utilized the remaining U.S. federal NOLs thereby, reducing the valuation allowance by $5,107,000. As a result of our increased operating performance over the past several years, we reevaluated the certainty as to whether our remaining NOLs and other deferred tax assets may ultimately be realized. Management concluded that it is more likely than not that almost all of the remaining U.S. deferred tax assets will be realized; therefore, $49,161,000 of the remaining valuation allowance was reversed as of March 31, 2013.



	Parent		Guarantors		Non Guarantors			Eliminations			Consolidated
As of September 30, 2013
ASSETS
Current assets:
Cash and cash equivalents	$	76,834	$	—	$	34,985		$	—		$	111,819
Trade accounts receivable, less allowance for doubtful accounts	32,896		3,955		40,001			—			76,852
Inventories	30,527		15,054		60,811			—			106,392
Prepaid expenses and other	10,373		1,638		7,071			—			19,082
Total current assets	150,630		20,647		142,868			—			314,145
Net property, plant, and equipment	38,242		11,813		19,057			—			69,112
Goodwill	40,696		31,025		40,180			—			111,901
Other intangibles, net	272		—		12,634			—			12,906
Intercompany	19,904		51,769		(71,673		)	—			—
Marketable securities	—		—		22,612			—			22,612
Deferred taxes on income	27,701		2,389		8,994			—			39,084
Investment in subsidiaries	203,753		—		—			(203,753		)	—
Other assets	5,941		525		25			—			6,491
Total assets	$	487,139	$	118,168	$	174,697		$	(203,753	)	$	576,251

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Trade accounts payable	$	11,197	$	5,104	$	13,165		$	—		$	29,466
Accrued liabilities	20,455		3,398		25,466			—			49,319
Current portion of long-term debt			331		788			—			1,119
Total current liabilities	31,652		8,833		39,419			—			79,904
Senior debt, less current portion	—		1,479		848			—			2,327
Subordinated debt	148,549		—		—			—			148,549
Other non-current liabilities	48,373		5,825		32,708			—			86,906
Total liabilities	228,574		16,137		72,975			—			317,686
Total shareholders’ equity	258,565		102,031		101,722			(203,753		)	258,565
Total liabilities and shareholders’ equity	$	487,139	$	118,168	$	174,697		$	(203,753	)	$	576,251



	Parent			Guarantors			Non Guarantors			Eliminations			Consolidated
For the Three Months Ended September 30, 2013:
Net sales	$	58,194		$	31,703		$	62,870		$	(13,915	)	$	138,852
Cost of products sold	40,800			25,285			42,422			(13,915		)	94,592
Gross profit	17,394			6,418			20,448			—			44,260
Selling expenses	6,244			1,284			9,753			—			17,281
General and administrative expenses	4,671			3,598			5,898			—			14,167
Amortization of intangibles	24			—			502			—			526
Income from operations	6,455			1,536			4,295			—			12,286
Interest and debt expense	3,241			44			87			—			3,372
Investment income	—			—			(276		)	—			(276		)
Foreign currency exchange loss	24			—			171			—			195
Other (income) and expense, net	(1,452		)	(816		)	1,007			—			(1,261		)
Income before income tax expense	4,642			2,308			3,306			—			10,256
Income tax expense (benefit)	1,241			1,117			776			—			3,134
Equity in income from continuing operations of subsidiaries	3,721			—			—			(3,721		)	—
Net income	$	7,122		$	1,191		$	2,530		$	(3,721	)	$	7,122



	Parent			Guarantors			Non Guarantors			Eliminations			Consolidated
For the Six Months Ended September 30, 2013:
Net sales	$	118,194		$	66,525		$	121,313		$	(28,289	)	$	277,743
Cost of products sold	82,046			52,626			83,609			(28,289		)	$	189,992
Gross profit	36,148			13,899			37,704			—			87,751
Selling expenses	11,984			2,693			19,351			—			$	34,028
General and administrative expenses	8,506			7,823			10,688			—			$	27,017
Amortization of intangibles	47			—			938			—			$	985
Income from operations	15,611			3,383			6,727			—			25,721
Interest and debt expense	6,485			90			168			—			$	6,743
Investment income	—			—			(492		)	—			$	(492	)
Foreign currency exchange loss	40			—			380			—			$	420
Other (income) and expense, net	(2,140		)	(1,580		)	2,548			—			$	(1,172	)
Income before income tax expense	11,226			4,873			4,123			—			20,222
Income tax expense (benefit)	3,508			2,000			572			—			$	6,080
Equity in income from continuing operations of subsidiaries	6,424			—			—			(6,424		)	$	—
Net income	$	14,142		$	2,873		$	3,551		$	(6,424	)	$	14,142



For the Three Months Ended September 30, 2013
	Parent			Guarantors		Non Guarantors			Eliminations			Consolidated
Net income	$	7,122		$	1,191	$	2,530		$	(3,721	)	$	7,122
Other comprehensive income (loss), net of tax:												$	—
Foreign currency translation adjustments	—			3,733		(668		)	—			$	3,065
Change in derivatives qualifying as hedges, net of tax	75			—		30			—			$	105
Change in pension liability and post-retirement obligations, net of tax	—			—		(115		)	—			$	(115	)
Adjustments:
Unrealized holding gains (losses) arising during the period, net of tax	96			—		196			—			$	292
Reclassification adjustment for loss included in net income, net of tax	(880		)	—		153			—			$	(727	)
Total adjustments	(784		)	—		349			—			(435		)
Total other comprehensive income (loss)	(709		)	3,733		(404		)	—			2,620
Comprehensive income (loss)	$	6,413		$	4,924	$	2,126		$	(3,721	)	$	9,742



For the Six Months Ended September 30, 2013
	Parent			Guarantors		Non Guarantors			Eliminations			Consolidated
Net income	$	14,142		$	2,873	$	3,551		$	(6,424	)	$	14,142
Other comprehensive income (loss), net of tax:												$	—
Foreign currency translation adjustments	—			5,052		(2,117		)	—			$	2,935
Change in derivatives qualifying as hedges, net of tax	26			—		165			—			$	191
Change in Pension liability and post-retirement obligations, net of tax	—			—		(120		)	—			$	(120	)
Adjustments:												$	—
Unrealized holding gains (loss) arising during the period, net of tax	96			—		(238		)	—			$	(142	)
Reclassification adjustment for loss included in net income, net of tax	(880		)	—		(82		)	—			$	(962	)
Total adjustments	(784		)	—		(320		)	—			(1,104		)
Total other comprehensive income (loss)	(758		)	5,052		(2,392		)	—			1,902
Comprehensive income (loss)	$	13,384		$	7,925	$	1,159		$	(6,424	)	$	16,044



	Parent			Guarantors			Non Guarantors			Eliminations		Consolidated
For the Six Months Ended September 30, 2013:
Operating activities:
Net cash (used for) provided by operating activities	$	10,999		$	1,267		$	(10,557	)	$	—	$	1,709
Investing activities:												$	—
Proceeds from sale of marketable securities	—			—			3,724			—		$	3,724
Purchases of marketable securities	—			—			(2,597		)	—		$	(2,597	)
Capital expenditures	(1,318		)	(1,116		)	(5,599		)	—		$	(8,033	)
Purchase of business				—			(5,847		)	—		$	(5,847	)
Intercompany transactions	(13,303		)	—			13,303			—		$	—
Net cash used for investing activities	(14,621		)	(1,116		)	2,984			—		(12,753		)
Financing activities:												$	—
Proceeds from exercise of stock options	838			—			—			—		$	838
Repayment of debt	—			(151		)	(144		)	—		$	(295	)
Change in ESOP debt guarantee	206			—			—			—		$	206
Net cash provided by (used for) financing activities	1,044			(151		)	(144		)	—		749
Effect of exchange rate changes on cash	—			—			454			—		$	454
Net change in cash and cash equivalents	(2,578		)	—			(7,263		)	—		(9,841		)
Cash and cash equivalents at beginning of year	79,412			—			42,248			—		$	121,660
Cash and cash equivalents at end of year	$	76,834		$	—		$	34,985		$	—	$	111,819



	Parent		Guarantors		Non Guarantors			Eliminations			Consolidated
As of March 31, 2013:
ASSETS
Current assets:
Cash and cash equivalents	$	79,412	$	—	$	42,248		$	—		$	121,660
Trade accounts receivable, less allowance for doubtful accounts	37,967		4,068		38,189			—			80,224
Inventories	28,117		14,230		51,842			—			$	94,189
Prepaid expenses and other	10,850		1,371		5,684			—			17,905
Total current assets	156,346		19,669		137,963			—			313,978
Net property, plant, and equipment	39,552		11,612		14,534			—			65,698
Goodwill	40,696		31,025		33,633			—			$	105,354
Other intangibles, net	253		—		13,142			—			13,395
Intercompany transactions	5,805		63,368		(69,173		)	—			$	—
Marketable securities	—		—		23,951			—			23,951
Deferred taxes on income	27,215		2,389		7,601			—			$	37,205
Investment in subsidiaries	203,753		—		—			(203,753		)	—
Other assets	6,690		525		71			—			$	7,286
Total assets	$	480,310	$	128,588	$	161,722		$	(203,753	)	$	566,867

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Trade accounts payable	$	17,433	$	7,018	$	9,878		$	—		34,329
Accrued liabilities	21,710		3,952		23,222			—			$	48,884
Current portion of long-term debt	—		311		713			—			1,024
Total current liabilities	39,143		11,281		33,813			—			84,237
Senior debt, less current portion	—		1,650		991			—			2,641
Subordinated debt	148,412		—		—			—			$	148,412
Other non-current liabilities	52,768		5,875		32,947			—			91,590
Total liabilities	240,323		18,806		67,751			—			326,880
Total shareholders’ equity	239,987		109,782		93,971			(203,753		)	239,987
Total liabilities and shareholders’ equity	$	480,310	$	128,588	$	161,722		$	(203,753	)	$	566,867



	Parent			Guarantors		Non Guarantors			Eliminations			Consolidated
For the Three Months Ended September 30, 2012:
Net sales	$	57,560		$	39,624	$	63,192		$	(13,904	)	$	146,472
Cost of products sold	40,826			33,243		43,905			(13,904		)	104,070
Gross profit	16,734			6,381		19,287			—			42,402
Selling expenses	5,520			1,500		9,427			—			16,447
General and administrative expenses	4,172			3,602		4,772			—			$	12,546
Amortization of intangibles	24			—		465			—			489
Income from operations	7,018			1,279		4,623			—			12,920
Interest and debt expense	2,746			632		127			—			3,505
Investment income	—			—		(382		)	—			$	(382	)
Foreign currency exchange gain	9			—		181			—			190
Other (income) and expense, net	(127		)	5		(51		)	—			$	(173	)
Income before income tax expense	4,390			642		4,748			—			9,780
Income tax expense	623			—		905			—			$	1,528
Equity in income from continuing operations of subsidiaries	4,485			—		—			(4,485		)	—
Net income	$	8,252		$	642	$	3,843		$	(4,485	)	$	8,252



	Parent			Guarantors		Non Guarantors			Eliminations			Consolidated
For the Six Months Ended September 30, 2012:
Net sales	$	116,730		$	83,199	$	127,186		$	(27,630	)	$	299,485
Cost of products sold	84,230			69,836		86,823			(27,630		)	213,259
Gross profit	32,500			13,363		40,363			—			86,226
Selling expenses	11,427			3,133		18,254			—			32,814
General and administrative expenses	8,902			7,998		9,824			—			$	26,724
Amortization of intangibles	47			—		941			—			988
Income from operations	12,124			2,232		11,344			—			25,700
Interest and debt expense	6,098			684		222			—			7,004
Investment income	—			—		(662		)	—			$	(662	)
Foreign currency exchange gain	(25		)	—		(121		)	—			(146		)
Other (income) and expense, net	(145		)	16		(366		)	—			$	(495	)
Income before income tax expense	6,196			1,532		12,271			—			19,999
Income tax (benefit) expense	(233		)	80		3,464			—			$	3,311
Equity in income from continuing operations of subsidiaries	10,259			—		—			(10,259		)	—
Net income	$	16,688		$	1,452	$	8,807		$	(10,259	)	$	16,688



For the Three Months Ended September 30, 2012
	Parent		Guarantors		Non Guarantors			Eliminations			Consolidated
Net income	$	8,252	$	642	$	3,843		$	(4,485	)	$	8,252
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments	—		—		2,517			—			$	2,517
Change in derivatives qualifying as hedges, net of tax	31		—		(122		)	—			$	(91	)
Change in pension liability and post-retirement obligations, net of tax	—		—		(51		)	—			(51		)
Adjustments:
Unrealized holding gain (loss) arising during the period, net of tax	—		—		521			—			$	521
Reclassification adjustment for loss included in net income, net of tax	—		—		(170		)	—			$	(170	)
Total adjustments	—		—		351			—			351
Total other comprehensive income	31		—		2,695			—			2,726
Comprehensive income	$	8,283	$	642	$	6,538		$	(4,485	)	$	10,978



For the Six Months Ended September 30, 2012
	Parent		Guarantors		Non Guarantors			Eliminations			Consolidated
Net income	$	16,688	$	1,452	$	8,807		$	(10,259	)	$	16,688
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments	—		—		(2,678		)	—			$	(2,678	)
Change in derivatives qualifying as hedges, net of tax	43		—		(231		)	—			$	(188	)
Change in pension liability and post-retirement obligations, net of tax	—		—		34			—			34
Adjustments:
Unrealized holding gain (loss) arising during the period, net of tax	—		—		401			—			$	401
Reclassification adjustment for loss included in net income, net of tax	—		—		(253		)	—			$	(253	)
Total adjustments	—		—		148			—			148
Total other comprehensive income (loss)	43		—		(2,727		)	—			(2,684		)
Comprehensive income	$	16,731	$	1,452	$	6,080		$	(10,259	)	$	14,004



	Parent			Guarantors			Non Guarantors			Eliminations		Consolidated
For the Six Months Ended September 30, 2012:
Operating activities:
Net cash (used for) provided by operating activities	$	6,557		$	(1,276	)	$	2,293		$	—	$	7,574
Investing activities:
Proceeds from sale of marketable securities	—			—			3,101			—		$	3,101
Purchases of marketable securities	—			—			(1,936		)	—		(1,936		)
Capital expenditures	(3,354		)	(211		)	(515		)	—		$	(4,080	)
Proceeds from sale of assets	—			1,482			—			—		$	1,482
Net cash used for investing activities	(3,354		)	1,271			650			—		(1,433		)
Financing activities:
Proceeds from stock options exercised	219			—			—			—		219
Net payments under lines-of-credit	—			—			(51		)	—		$	(51	)
Other	213			—			(393		)	—		(180		)
Net cash provided by (used for) financing activities	432			—			(444		)	—		(12		)
Effect of exchange rate changes on cash	—			—			(675		)	—		(675		)
Net change in cash and cash equivalents	3,635			(5		)	1,824			—		5,454
Cash and cash equivalents at beginning of year	55,958			5			33,510			—		89,473
Cash and cash equivalents at end of year	$	59,593		$	—		$	35,334		$	—	$	94,927



	Three months ended September 30, 2013
	Unrealized Investment Gain			Retirement Obligations			Foreign Currency		Change in Derivatives Qualifying as Hedges			Total
Beginning Balance Net of Tax	$	2,139		$	(60,720	)	$	2,075	$	(367	)	$	(56,873	)
Other Comprehensive (loss) income before reclassification	292			(1,238		)	3,065		25			2,144
Amounts reclassified from other comprehensive loss	(727		)	1,123			—		80			476
Net current period other comprehensive (loss) income	(435		)	(115		)	3,065		105			2,620
Ending Balance	$	1,704		$	(60,835	)	$	5,140	$	(262	)	$	(54,253	)



	Six months ended September 30, 2013
	Unrealized Investment Gain			Retirement Obligations			Foreign Currency		Change in Derivatives Qualifying as Hedges			Total
Beginning Balance Net of Tax	$	2,808		$	(60,715	)	$	2,205	$	(453	)	$	(56,155	)
Other Comprehensive (loss) income before reclassification	(142		)	(2,361		)	2,935		116			548
Amounts reclassified from other comprehensive loss	(962		)	2,241			—		75			1,354
Net current period other comprehensive (loss) income	(1,104		)	(120		)	2,935		191			1,902
Ending Balance	$	1,704		$	(60,835	)	$	5,140	$	(262	)	$	(54,253	)



Details of AOCL Components	Amount reclassified from AOCL			Affected line item on condensed consolidated statement of operations and retained earnings
Unrealized gain on investments
	$	(1,119	)	Investment income
	(1,119		)	Total before tax
	392			Tax expense
	$	(727	)	Net of tax

Net amortization of prior service cost
	$	1,604		(1)
	1,604			Total before tax
	481			Tax benefit
	$	1,123		Net of tax

Change in derivatives qualifying as hedges
	$	114		Cost of products sold
	114			Total before tax
	34			Tax expense
	$	80		Net of tax



Details of AOCL Components	Amount reclassified from AOCL			Affected line item on condensed consolidated statement of operations and retained earnings
Unrealized gain on investments
	$	(1,480	)	Investment income
	(1,480		)	Total before tax
	518			Tax expense
	$	(962	)	Net of tax

Net amortization of prior service cost
	$	3,202		(1)
	3,202			Total before tax
	961			Tax benefit
	$	2,241		Net of tax

Change in derivatives qualifying as hedges
	$	107		Cost of products sold
	107			Total before tax
	32			Tax expense
	$	75		Net of tax

In April 2013, the FASB issued ASU No. 2013-07, "Presentation of Financial Statements (Topic 205): Liquidation Basis of Accounting." The objective of ASU 2013-07 is to clarify when an entity should apply the liquidation basis of accounting. The update provides principles for the recognition and measurement of assets and liabilities and requirements for financial statements prepared using the liquidation basis of accounting. This ASU is effective prospectively for fiscal years, and interim periods within those years, beginning after December 15, 2013. The Company does not anticipate that the adoption of this standard will have a material impact on its consolidated financial statements, absent any indications that liquidation is imminent.

In March 2013, the FASB issued ASU No. 2013-05, “Foreign Currency Matters (Topic 830): Parent’s Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity.” This ASU addresses the accounting for the cumulative translation adjustment when a parent either sells a part or all of its investment in a foreign entity or no longer holds a controlling financial interest in a subsidiary or group of assets that is a nonprofit activity or a business within a foreign entity. This ASU is effective prospectively for fiscal years, and interim periods within those years, beginning after December 15, 2013. The Company is evaluating the potential impact of this adoption on its consolidated financial statements.

In February 2013, the FASB, issued ASU No. 2013-04, “Liabilities (Topic 405): Obligations Resulting from Joint and Several Liability Arrangements for which the Total Amount of the Obligation Is Fixed at the Reporting Date.” This ASU addresses the recognition, measurement, and disclosure of certain obligations resulting from joint and several arrangements including debt arrangements, other contractual obligations, and settled litigation and judicial rulings. The ASU is effective for public entities for fiscal years, and interim periods within those years, beginning after December 15, 2013. The Company is evaluating the potential impact of this adoption on its consolidated financial statements.

In February 2013, the FASB issued ASU No. 2013-02, “Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income.” The ASU requires entities to provide information about significant amounts reclassified out of accumulated other comprehensive income by component and their corresponding effect on net income. The ASU is effective for public entities for fiscal years beginning after December 15, 2012. The Company adopted this ASU in fiscal 2014. Refer to Footnote 15 for further details.

In January 2013, the FASB issued ASU No. 2013-01, "Balance Sheet (Topic 210): Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities". The ASU clarifies that ordinary trade receivables and certain other receivables are not in the scope of ASU No. 2011-11, “Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities.” Specifically, Update 2011-11 applies only to derivatives, repurchase agreements and reverse purchase agreements, and securities borrowing and securities lending transactions that are either offset in accordance with specific criteria contained in FASB Accounting Standards Codification or subject to a master netting arrangement or similar agreement. The amendments in this ASU are effective for fiscal years, and interim periods within those years, beginning on or after January 1, 2013. The adoption of this standard did not have a significant effect on the Company's consolidated financial position.

We are a leading worldwide designer, manufacturer and marketer of material handling products, systems and services which efficiently and safely move, lift, position and secure material. Key products include hoists, actuators, cranes and rigging tools. The Company is focused on serving commercial and industrial applications that require the safety and quality provided by the Company’s superior design and engineering know-how.

Founded in 1875, we have grown to our current size and leadership position through organic growth and acquisitions. We developed our leading market position over our 138-year history by emphasizing technological innovation, manufacturing excellence and superior after-sale service. In addition, acquisitions significantly broadened our product lines and services and expanded our geographic reach, end-user markets and customer base. Ongoing initiatives include improving our productivity and increasing penetration of the Asian, Latin American and European marketplaces. In accordance with our strategy, we have been investing in our sales and marketing activities, new product development and “Lean” efforts across the Company. Shareholder value will be enhanced through continued emphasis on market expansion, customer satisfaction, new product development, manufacturing efficiency, cost containment, and efficient capital investment.

Over the course of our history, we have managed through many business cycles and our solid cash flow profile has helped us grow and expand globally. We stand with a capital structure which includes sufficient cash reserves, significant revolver availability with an expiration of October 31, 2017, fixed-rate long-term debt which expires in 2019 and a solid cash flow business profile.

Additionally, our revenue base is geographically diverse with approximately 42% derived from customers outside the U.S. for the six months ended September 30, 2013. We believe this will help balance the impact of changes that will occur in local economies as well as benefit the Company from growth in emerging markets. As in the past, we monitor both U.S. and Eurozone Industrial Capacity Utilization statistics as indicators of anticipated demand for our products. Since their June 2009 trough, these statistics have improved over the last several years, although we have recently seen a decline in the Eurozone. In addition, we continue to monitor the potential impact of other global and U.S. trends including industrial production, energy costs, steel price fluctuations, interest rates, foreign currency exchange rates and activity of end-user markets around the globe.

From a strategic perspective, we are investing in global markets and new products as we focus on our greatest opportunities for growth. We maintain a strong North American market share with significant leading market positions in hoists, lifting and sling chain, forged attachments and actuators. We seek to maintain and enhance our market share by focusing our sales and marketing activities toward select North American and global market sectors including energy, general industrial, entertainment, and mining.

Regardless of the economic climate and point in the economic cycle, we constantly explore ways to increase our operating margins as well as further improve our productivity and competitiveness. We have specific initiatives related to improved customer satisfaction, reduced defects, shortened lead times, improved inventory turns and on-time deliveries, reduced warranty costs, and improved working capital utilization. The initiatives are being driven by the continued implementation of our “Lean” efforts which are fundamentally changing our manufacturing and business processes to be more responsive to customer demand and improving on-time delivery and productivity. In addition to “Lean,” we are working to achieve these strategic initiatives through product simplification, the creation of centers of excellence, and improved supply chain management.

We operate in a highly competitive and global business environment. We face a variety of opportunities in those markets and geographies, including trends toward increased utilization of the global labor force and the expansion of market opportunities in Asia and other emerging markets. While we continue to execute our long-term growth strategy, we are supported by our solid capital structure, including our cash position and flexible cost base. We are also aggressively pursuing cost reduction opportunities to enhance future margins.

Net sales in the fiscal 2014 quarter ended September 30, 2013 were $138,852,000, down $7,620,000 or 5.2% from the fiscal 2013 quarter ended September 30, 2012 net sales of $146,472,000. Net sales were positively impacted $3,509,000 by price increases. Net sales were negatively impacted in the amount of $11,159,000 due to a decrease in sales volume and $259,000 due to net acquisition and divestiture activity. Foreign currency translation favorably impacted sales by $289,000 for the three months ended September 30, 2013.

Gross profit in the fiscal 2014 quarter ended September 30, 2013 was $44,260,000, an increase of $1,858,000 or 4.4% from the fiscal 2013 quarter ended September 30, 2012 gross profit of $42,402,000. Gross profit margin increased to 31.9% in the fiscal 2014 quarter from 28.9% in the fiscal 2013 quarter. The increase in gross profit margin was due to $3,509,000 in price increases and $1,591,000 from net acquisition and divestiture activity offset by $1,752,000 in decreased volume, $1,282,000 in increased product liability costs resulting from a favorable reserve adjustment in the prior year period, $118,000 in material inflation, and $254,000 in decreased productivity. The translation of foreign currencies had a $164,000 favorable impact on gross profit in the for the three months ended September 30, 2013.

Selling expenses were $17,281,000 and $16,447,000 in the fiscal 2014 and 2013 second quarters ended September 30, 2013 and 2012, respectively. As a percentage of consolidated net sales, selling expenses were 12.4% and 11.2% in the fiscal 2014 and 2013 three months ended September 30, 2013 and 2012. The incremental increase in selling expenses relates to the recent acquisition of Hebetechnik resulting in $1,041,000 of additional selling expenses. Foreign currency translation had a negligible impact on selling expenses.

General and administrative expenses were $14,167,000 and $12,546,000 in the fiscal 2014 and 2013 second quarters ended September 30, 2013 and 2012, respectively. As a percentage of consolidated net sales, general and administrative expenses were 10.2% and 8.6% in the fiscal 2014 and 2013 three months ended September 30, 2013 and 2012. The increase in fiscal 2014 general and administrative expenses was primarily the result of non-recurring personnel related costs and professional services. Foreign currency translation had a $294,000 unfavorable impact on general administrative expense for the three months ended September 30, 2013.

Income tax expense as a percentage of income from continuing operations before income tax expense was 31% and 16% for the second quarters ended September 30, 2013 and 2012, respectively. These percentages vary from the U.S. statutory rate primarily due to varying effective tax rates at the Company's foreign subsidiaries, and the jurisdictional mix of taxable income for these subsidiaries. For the three months ended September 30, 2012, income taxes as a percentage of income before income taxes was not reflective of U.S. statutory rates due to the deferred tax asset valuation allowance that was recorded on substantially all of our U.S. deferred tax assets. We estimate that the effective tax rate related to continuing operations will be approximately 27% to 32% for fiscal 2014.

Net sales in the fiscal 2014 six months ended September 30, 2013 were $277,743,000, down $21,742,000 or 7.3% from the fiscal 2013 six months ended September 30, 2012 net sales of $299,485,000. Net sales were positively impacted $6,891,000 by price increases and $2,429,000 by one additional shipping day. Net sales were negatively impacted $27,064,000 due to a decrease in sales volume and $4,079,000 due to net acquisition and divestiture activity. Foreign currency translation favorably impacted sales by $81,000 for the six months.

fiscal 2014 six months ended September 30, 2013 from 28.8% in the fiscal 2013 six months ended September 30, 2012. The increase in gross profit margin was due to $6,891,000 in price increases, $1,883,000 from net acquisition and divestiture activity, and $982,000 in increased productivity offset by $6,780,000 in decreased volume, $787,000 in increased product liability costs resulting from a favorable reserve adjustment in the prior year period, and material inflation of $651,000. The translation of foreign currencies had a $13,000 negative impact on gross profit in the six months ended September 30, 2013.

Selling expenses were $34,028,000 and $32,814,000 in the six months ended September 30, 2013 and 2012, respectively. As a percentage of consolidated net sales, selling expenses were 12.3% and 11.0% in the fiscal 2014 and 2013 six months ended September 30, 2013 and 2012. The incremental increase in selling expenses relates to the recent acquisition of Hebetechnik resulting in $1,386,000 of additional selling expenses. Foreign currency translation had a $118,000 favorable impact on selling expenses.

General and administrative expenses were $27,017,000 and $26,724,000 in the six months ended September 30, 2013 and 2012, respectively. As a percentage of consolidated net sales, general and administrative expenses were 9.7% and 8.9% in fiscal 2014 and 2013 six months ended September 30, 2013 and 2012. Foreign currency translation had a $293,000 unfavorable impact on general and administrative expenses.

Income tax expense as a percentage of income from continuing operations before income tax expense was 30% and 17% for the six months ended September 30, 2013 and 2012, respectively. These percentages vary from the U.S. statutory rate primarily due to varying effective tax rates at the Company's foreign subsidiaries, and the jurisdictional mix of taxable income for these subsidiaries. For the six months ended September 30, 2012, income taxes as a percentage of income before income taxes was not reflective of U.S. statutory rates due to the deferred tax asset valuation allowance that was recorded on substantially all of our U.S. deferred tax assets. We estimate that the effective tax rate related to continuing operations will be approximately 27% to 32% for fiscal 2014.

Net cash provided by operating activities was $1,709,000 for the six months ended September 30, 2013 compared with net cash provided by operating activities of $7,574,000 for the six months ended September 30, 2012. The net cash provided by operating activities for the six months ended September 30, 2013 consisted of a decrease in trade accounts receivable of $5,074,000, offset by an increase in inventories of $10,433,000 and a decrease in trade accounts payable and accrued and non-current liabilities of $5,366,000 and $7,094,000 respectively. Approximately $3,500,000 of the increase in inventory was due to several large engineered projects that are in process with the rest of the increase due to anticipated sales volume growth in the second half of fiscal 2014. The reduction in accrued and non-current liabilities was due to payment of the annual incentive compensation and contributions made to our pension plans.

Net cash provided by operating activities was $7,574,000 for the six months ended September 30, 2012. The net cash provided by operating activities for the six months ended September 30, 2012 consisted of $16,688,000 in net income, which was largely due to higher gross profit offset by higher selling, general, and administrative expenses, reduced by an increase in inventories and prepaid expenses of $7,231,000 and $3,477,000 respectively and a decrease in trade accounts payable and accrued and non-current liabilities of $6,002,000 and $5,369,000 respectively. The increase in inventory levels was due to anticipated continued growth in sales volume on a year over year basis. The reduction in accrued and non-current liabilities was due to payment of the annual incentive compensation as well as sales rebates earned in fiscal year 2012 and paid in fiscal 2013 along with a net decrease in customer deposits. The increase in prepaid expenses was due to the timing of insurance renewals.

Net cash used for investing activities was $12,753,000 for the six months ended September 30, 2013 compared with net cash used by investing activities of $1,433,000 for the six months ended September 30, 2012. The net cash used for investing activities for the six months ended September 30, 2013 consisted of $8,033,000 in capital expenditures (of which $1,401,000 relates to implementation of our global ERP system), $5,847,000 cash used for the purchase of Hebetechnik by our Austrian subsidiary, offset by $1,127,000 in net cash from the sale of marketable equity securities.

Net cash used for investing activities was $1,433,000 for the six months ended September 30, 2012. The net cash used by investing activities for the six months ended September 30, 2012 primarily consisted of $4,080,000 in capital expenditures (of which $1,455,000 relates to implementation of our global ERP system) partially offset by $1,482,000 in proceeds from the sale of assets.

Net cash provided by financing activities was $749,000 for the six months ended September 30, 2013 compared with net cash used by financing activities of $12,000 for the six months ended September 30, 2012. Net provided by financing activities for the six months ended September 30, 2013 primarily relates to cash proceeds from the exercise of stock options of $838,000.

We believe that our cash on hand, cash flows, and borrowing capacity under our Revolving Credit Facility will be sufficient to fund our ongoing operations and budgeted capital expenditures for at least the next twelve months. This belief is dependent upon successful execution of our current business plan and effective working capital utilization. No material restrictions exist in accessing cash held by our non-U.S. subsidiaries. Additionally we expect to meet our U.S. funding needs without repatriating non-U.S. cash and incurring incremental U.S. taxes. As of September 30, 2013, $34,718,000 of cash and cash equivalents were held by foreign subsidiaries.

Provided there is no default, the Company may request an increase in the availability of the New Revolving Credit Facility by an amount not exceeding $75,000,000, subject to lender approval. Interest on the revolver is payable at varying Eurodollar rates based on LIBOR plus an applicable margin of 100 basis points or at a Base Rate (equivalent to a fluctuating rate per annum equal to the higher of (a) the Federal Funds Rate plus 1/2 of 1% and (b) the rate of interest in effect for such day as publicly announced from time to time by Bank of America as its “prime rate.”) plus 0 basis points. The applicable margin is determined based on the pricing grid in the New Revolving Credit Facility which varies based on the Company’s total leverage ratio at September 30, 2013. The New Revolving Credit Facility is secured by all U.S. inventory, receivables, equipment, real property, subsidiary stock (limited to 65% of non-U.S. subsidiaries) and intellectual property.

The corresponding credit agreement associated with the New Revolving Credit Facility places certain debt covenant restrictions on the Company, including certain financial requirements and restrictions on dividend payments, with which we are in compliance as of September 30, 2013. Key financial covenants include a minimum fixed charge coverage ratio of 1.25x, a maximum total leverage ratio, net of cash, of 3.50x and maximum annual capital expenditures of $30,000,000.

During the fourth quarter of fiscal year 2011, the Company refinanced its 8 7/8% Notes through the issuance of $150,000,000 principal amount of 7 7/8% Senior Subordinated Notes due 2019 in a private placement pursuant to Rule 144A under the Securities Act of 1933, as amended (“Unregistered 7 7/8% Notes”). The proceeds from the sale of the Unregistered 7 7/8% Notes were used to repurchase or redeem all of the outstanding 8 7/8% Notes amounting to $124,855,000 and to fund working capital and other corporate activities. The offering price of the Unregistered 7 7/8% Notes was 98.545% after adjustment for the original issue discount. Provisions of the Unregistered 7 7/8% Notes include, without limitation, restrictions on indebtedness, asset sales, and dividends and other restrictive payments. Until February 1, 2014, the Company may redeem up to 35% of the outstanding Unregistered 7 7/8% Notes at a redemption price of 107.875% with the proceeds of equity offerings, subject to certain restrictions. On or after February 1, 2015, the Unregistered 7 7/8% Notes are redeemable at the option of the Company, in whole or in part, at a redemption price of 103.938%, reducing to 100% on February 1, 2017. In the event of a Change of Control (as defined in the indenture for such notes), each holder of the Unregistered 7 7/8% Notes may require us to repurchase all or a portion of such holder’s Unregistered 7 7/8% Notes at a purchase price equal to 101% of the principal amount thereof. The Unregistered 7 7/8% Notes are guaranteed by certain existing and future U.S. subsidiaries and are not subject to any sinking fund requirements.

During the first quarter of fiscal year 2012, the Company exchanged its $150,000,000 outstanding Unregistered 7 7/8% Notes for a like principal amount of 7 7/8% Senior Subordinated Notes due 2019 registered under the Securities Act of 1933, as amended (“7 7/8% Notes”). All of the Unregistered 7 7/8% Notes were exchanged in the transaction. The 7 7/8% Notes contain identical terms and provisions as the Unregistered 7 7/8% Notes.

Unsecured and uncommitted lines of credit are available to meet short-term working capital needs for certain of our subsidiaries operating outside of the U.S. The lines of credit are available on an offering basis, meaning that transactions under the line of credit will be on such terms and conditions, including interest rate, maturity, representations, covenants and events of default, as mutually agreed between our subsidiaries and the local bank at the time of each specific transaction. As of September 30, 2013, unsecured credit lines totaled approximately $6,763,000, of which $0 was drawn. In addition, unsecured lines of $12,511,000 were available for bank guarantees issued in the normal course of business, of which $6,296,000 was utilized. Finally, in addition to the above facilities, one of our foreign subsidiaries has a credit line secured by a parent company guarantee. This credit line provides availability of up to $980,000, of which $0 was drawn as of September 30, 2013.

In addition to keeping our current equipment and plants properly maintained, we are committed to replacing, enhancing and upgrading our property, plant and equipment to support new product development, improve productivity and customer responsiveness, reduce production costs, increase flexibility to respond effectively to market fluctuations and changes, meet environmental requirements, enhance safety and promote ergonomically correct work stations. Consolidated capital expenditures for the six months ended September 30, 2013 and September 30, 2012 were $8,033,000 and $4,080,000, respectively. We expect capital spending for fiscal 2014 to be approximately $20,000,000 to $25,000,000 compared with $14,879,000 in fiscal 2013. Approximately $6,800,000 in capital expenditures is due to the expansion of our China operations.

Our costs are affected by inflation in the U.S. economy and, to a lesser extent, in non-U.S. economies including those of Europe, Canada, Mexico, South America, and Asia Pacific. We have been impacted by fluctuations in steel costs, which vary by type of steel and we continue to monitor them and address our pricing policies accordingly. In addition, U.S. employee benefits costs such as health insurance and pension, as well as energy costs have exceeded general inflation levels. Otherwise, we do not believe that general inflation has had a material effect on results of operations over the periods presented primarily due to overall low inflation levels over such periods and our ability to generally pass on rising costs through price increases or surcharges. In the future, we may be further affected by inflation that we may not be able to offset with price increases or surcharges. Additionally, we are impacted by fluctuations in currency exchange rates which are primarily translational, but transactional fluctuations could also impact our financial results.

We test goodwill for impairment at least annually and more frequently whenever events occur or circumstances change that indicate there may be impairment. These events or circumstances could include a significant long-term adverse change in the business climate, poor indicators of operating performance, or a sale or disposition of a significant portion of a reporting unit.

We test goodwill at the reporting unit level, which is one level below our operating segment. We identify our reporting units by assessing whether the components of our operating segment constitute businesses for which discrete financial information is available and segment management regularly reviews the operating results of those components. We also aggregate components that have similar economic characteristics into single reporting units (for example, similar products and / or services, similar long-term financial results, product processes, classes of customers, etc.). We have four reporting units, only two of which have goodwill. Our Duff Norton reporting unit and Rest of Products reporting unit had goodwill totaling $9,840,000 and $102,061,000 at September 30, 2013, respectively. Included within the goodwill for the Rest of Products reporting unit is $5,324,000 recorded during the six months ended September 30, 2013 as part of the acquisition of Hebetechnik. Please refer to Note 3 for additional details on this acquisition.

In order to perform the two-step impairment test, we use the discounted cash flow method to estimate the fair value of each of our reporting units. The discounted cash flow method incorporates various assumptions, the most significant being projected revenue growth rates, operating profit margins and cash flows, the terminal growth rate and the discount rate. Management projects revenue growth rates, operating margins and cash flows based on each reporting unit’s current business, expected developments and operational strategies over a five-year period. In estimating the terminal growth rate, we consider our historical and projected results, as well as the economic environment in which our reporting units operate. The discount rates utilized for each reporting unit reflect management’s assumptions of marketplace participants’ cost of capital and risk assumptions, both specific to the reporting unit and overall in the economy.

We currently do not believe that it is more likely than not that the fair value of each of our reporting units is less than that its applicable carrying value. Additionally, we currently do not believe that we have any significant impairment indicators or that any of our reporting units with goodwill are at risk of failing Step One of the goodwill impairment test. However if the projected long-term revenue growth rates, profit margins, or terminal rates are significantly lower, and/or the estimated weighted-average cost of capital is considerably higher, future testing may indicate impairment of one or more of the Company’s reporting units and, as a result, the related goodwill may be impaired.

Quarterly results may be materially affected by the timing of large customer orders, periods of high vacation and holiday concentrations, gains or losses on early retirement of bonds, gains or losses in our portfolio of marketable securities, restructuring charges, favorable or unfavorable foreign currency translation, divestitures and acquisitions. Therefore, the operating results for any particular fiscal quarter are not necessarily indicative of results for any subsequent fiscal quarter or for the full fiscal year.

In July 2013, the FASB issued ASU No. 2013-11, "Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or Tax Credit Carryforward Exists." ASU 2013-11 requires entities to present an unrecognized tax benefit, or a portion of an unrecognized tax benefit, as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward when settlement in this manner is available under the tax law. This ASU is effective prospectively for fiscal years, and interim periods within those years, beginning after December 15, 2013. The Company is evaluating the potential impact of this adoption on its consolidated financial statements.

in a Foreign Entity.” This ASU addresses the accounting for the cumulative translation adjustment when a parent either sells a part or all of its investment in a foreign entity or no longer holds a controlling financial interest in a subsidiary or group of assets that is a nonprofit activity or a business within a foreign entity. This ASU is effective prospectively for fiscal years, and interim periods within those years, beginning after December 15, 2013. The Company is evaluating the potential impact of this adoption on its consolidated financial statements.

This report may include “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements involve known and unknown risks, uncertainties and other factors that could cause our actual results to differ materially from the results expressed or implied by such statements, including general economic and business conditions, conditions affecting the industries served by us and our subsidiaries, conditions affecting our customers and suppliers, competitor responses to our products and services, the overall market acceptance of such products and services, facility consolidations and other restructurings, our asbestos-related liability, the integration of acquisitions and other factors disclosed in our periodic reports filed with the Commission. Consequently such forward-looking statements should be regarded as our current plans, estimates and beliefs. We do not undertake and specifically decline any obligation to publicly release the results of any revisions to these forward-looking statements that may be made to reflect any future events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.

As of September 30, 2013, an evaluation was performed under the supervision and with the participation of the Company’s management, including the chief executive officer and chief financial officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures. Based on that evaluation, the Company’s management, including the chief executive officer and chief financial officer, concluded that the Company’s disclosure controls and procedures were effective as of September 30, 2013, to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is made known to them on a timely basis, and that these disclosure controls and procedures are effective to ensure such information is recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms.



	Exhibit 31.1		Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934; as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

	Exhibit 31.2		Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934; as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

	Exhibit 32		Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

	Exhibit 101*		The following financial statements from the Company’s Quarterly Report on Form 10-Q for the three and six months ended September 30, 2013, formatted in XBRL, as follows:

			(i) Condensed Consolidated Balance Sheets September 30, 2013 and March 31, 2013;

			(ii) Condensed Consolidated Statements of Operations and Retained Earnings for the three and six months ended September 30, 2013 and 2012;

			(iii) Condensed Consolidated Statements of Cash Flows for the six months ended September 30, 2013 and 2012;

			(iv) Condensed Consolidated Statements of Comprehensive Income (Loss) for the three and six months ended September 30, 2013 and 2012; and

			(v) Notes to Condensed Consolidated Financial Statements.

*Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Section 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.



Large accelerated filer o	Accelerated filer x
Non-accelerated filer o (Do not check if a smaller reporting company)	Smaller Reporting Company o



		Page #
Part I. Financial Information

Item 1.	Condensed Consolidated Financial Statements (Unaudited)

	Condensed consolidated balance sheets - September 30, 2013 and March 31, 2013	3

	Condensed consolidated statements of operations and retained earnings - Three and six months ended September 30, 2013 and 2012	4

	Condensed consolidated statements of comprehensive income - Three and six months ended September 30, 2013 and 2012	5

	Condensed consolidated statements of cash flows - Six months ended September 30, 2013 and 2012	6

	Notes to condensed consolidated financial statements - September 30, 2013	7

Item 2.	Management's Discussion and Analysis of Results of Operations and Financial Condition	28

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	34

Item 4.	Controls and Procedures	34

Part II. Other Information

Item 1.	Legal Proceedings – none.	35

Item 1A.	Risk Factors	35

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds – none.	35

Item 3.	Defaults upon Senior Securities – none.	35

Item 4.	Mine Safety Disclosures.	35

Item 5.	Other Information – none.	35

Item 6.	Exhibits	36



	September 30, 2013			March 31, 2013
At cost - FIFO basis:
Raw materials	$	56,638		$	52,900
Work-in-process	17,102			10,813
Finished goods	52,454			50,722
	126,194			114,435
LIFO cost less than FIFO cost	(19,802		)	(20,246		)
Net inventories	$	106,392		$	94,189



	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Marketable securities	$	20,788	$	2,062	$	238	$	22,612



	Aggregate Fair Value		Unrealized Losses
Securities in a continuous loss position for less than 12 months	$	7,257	$	238
Securities in a continuous loss position for more than 12 months	—		—
	$	7,257	$	238



ý	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT 1934



o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.



Working capital	$	212
Other current assets	58
Property, plant and equipment	446
Goodwill	5,324
Long term debt	(193		)
Total	$	5,847



Balance at April 1, 2013	$	105,354
Acquisition of Hebetechnik (See Note 3)	5,324
Currency translation	1,223
Balance at September 30, 2013	$	111,901



September 30,	Derivatives Not Designated as Hedging Instruments	Location of Gain Recognized in Income on Derivatives	Amount of Gain Recognized in Income on Derivatives
2013	Foreign exchange contracts	Foreign currency exchange gain	$	(60	)
2012	Foreign exchange contracts	Foreign currency exchange gain	(77		)


(1)	These AOCL components are included in the computation of net periodic pension cost. (See Note 10 — Net Periodic Benefit Cost for additional details.)


a)	The new enterprise resource planning system was designed to generate reports and other information used to account for transactions and reduce the number of manual processes employed by the Company;


c)	The Company will design new processes and implement new procedures in connection with the implementations.



	COLUMBUS McKINNON CORPORATION
	(Registrant)

Date: October 24, 2013	/S/ GREGORY P. RUSTOWICZ
	Gregory P. Rustowicz
	Chief Financial Officer
	(Principal Financial Officer)