UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON D.C. 20549


                                    FORM 8-K


                                 CURRENT REPORT

                     PURSUANT TO SECTION 13 OR 15(D) OF THE
                         SECURITIES EXCHANGE ACT OF 1934


                         Commission File Number 0-27618

        Date of Report (Date of earliest event reported): March 31, 1998

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

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

          140 JOHN JAMES AUDUBON PARKWAY, AMHERST, NEW YORK 14228-1197
          ------------------------------------------------------------
               (Address of principal executive offices)     (Zip Code)

       Registrant's telephone number, including area code: (716) 689-5400
                                                           --------------
                                 NOT APPLICABLE
          -------------------------------------------------------------   
              (Former name, former address and former fiscal year,
                          if changed since last report)



<PAGE>



ITEM 2. - ACQUISITION OR DISPOSITION OF ASSETS

(a) On March 11, 1998,  the Registrant  entered into a Stock Purchase  Agreement
(the  "Stock  Purchase  Agreement"  among  the  Registrant,  as  Buyer,  and the
shareholders  of LICO,  Inc., as Sellers.  Effective at the Closing on March 31,
1998,  the Sellers sold all of the shares of LICO,  Inc. to the  Registrant  for
$155 million less the greater of (x) the sum of $7.059  million and all costs or
expenses  paid by the  Registrant or any  Subsidiary  relating to or incurred in
connection  with this Stock  Purchase  Agreement or (y) Funded Debt of LICO. The
acquisition  was financed by the proceeds from the New Credit  Agreement and the
Private  Placement of 8 1/2% Senior  Subordinated  Notes due 2008,  described in
Item 5 (a) and (b) below, respectively.

(b) LICO, through its subsidiaries, is a designer, manufacturer and installer of
custom  conveyor  and  automated  material  handling  systems  with its  primary
fabrication facility and headquarters in Kansas City, Missouri.

ITEM 5.  -  OTHER EVENTS

(A) NEW CREDIT  AGREEMENT.  On March 31,  1998,  the  Registrant  entered into a
Credit Agreement (the "Credit Agreement") among the Registrant, as Borrower, the
banks,  financial institutions and other institutional lenders named therein, as
Initial  Lenders,  Fleet  National  Bank,  as the Initial  Issuing  Bank,  Fleet
National  Bank,  as  the  Swing  Line  Bank,  and  Fleet  National  Bank  as the
Administrative  Agent. The terms of the Credit Agreement provide for a five year
revolving credit facility with initial  borrowing  availability of $300 million.
The  proceeds  of  borrowings  under the  Credit  Agreement,  together  with the
proceeds  from the sale of the Notes  described in (b) below,  were used to fund
the acquisition of LICO, Inc. and repay borrowings under the Registrant's former
credit facility.

    Borrowings  under the Credit  Agreement  bear  interest  at a rate per annum
equal  to, at the  Registrant's  option,  either  (i) the  greater  of (a) Fleet
National  Bank's prime rate or (b) the Federal Funds Rate plus one-half of 1% or
(ii) LIBOR plus a margin (the "Applicable Margin") ranging from 0.375% to 1.25%,
depending upon the Registrant's ratio (the :"Leverage Ratio") of Funded Debt (as
defined)  to EBITDA (as  defined).  The  Registrant  is also  required  to pay a
commitment  fee at a rate per  annum  ranging  from  .125% to .275% of the total
borrowing  availability  under the Credit  Agreement  (the "Facility Fee Rate"),
determined  on the  basis  of the  Company's  Leverage  Ratio.  Based  upon  the
Company's most recently  determined  Leverage Ratio,  the Applicable  Margin and
Facility  Fee Rate are  1.25%  and  .275%  respectively.  The  Credit  Agreement
contains  customary  affirmative  and negative  covenants,  including  financial
covenants requiring the maintenance of specified  consolidated interest coverage
and leverage ratios and amounts of consolidated net worth.

    Borrowings  under the  Credit  Agreement  are  secured  by a first  priority
security  interest  on all  personal  property of the Company and certain of its
subsidiaries, and a pledge of stock of stock of subsidiaries (limited to 65% for
foreign  subsidiaries).  In addition,  certain  subsidiaries of the Company have
jointly and severally guaranteed the obligations of the Company under the Credit
Agreement.

(B) PRIVATE PLACEMENT OF 8 1/2% SENIOR SUBORDINATED NOTES DUE 2008. On March 31,
1998, the Registrant  completed the sale of $200 million principal amount of its
8 1/2% Senior  Subordinated  Notes due 2008 (the "Notes") in a private placement
under Section 4(2) of the  Securities  Act of 1933, as amended (the "Act"),  and
Rule 144A thereunder, at a purchase price of 99.734% of the face amount thereof.
The net proceeds from the sale of the Notes,  together with borrowings under the
Registrant's new credit facility  described in (a) above,  were used to fund the
acquisition of LICO, Inc. and repay  borrowings  under the  Registrant's  former
credit  facility.  The  Notes  bear  interest  at the rate of 8 1/2% per  annum,
payable  semi-annually,  and will  mature  on April 1,  2008.  Upon a change  of
Control  (as  defined)  of the  Registrant,  holders  of the Notes will have the
right, subject to certain restrictions and conditions, to require the Registrant
to purchase all or any of their Notes at 101% of the  principal  amount  thereof
plus accrued interest thereon.  The Notes are general  unsecured  obligations of
the  Registrant  and are  subordinated  in right of payment to all  existing and
future Senior Debt (as defined) of the Registrant. The Notes are guaranteed on a
senior  subordinated  basis by certain of the  Registrant's  existing and future
subsidiaries (the "Guarantors").  The Indenture pursuant to which the Notes were
issued contains various restrictive  covenants,  including covenants restricting
the payment of  dividends,  the  repurchase  of capital  stock and the making of
certain other  Restricted  Payments 

                                      (2)
<PAGE>

(as  defined),  the  incurrence of additional  indebtedness,  the  incurrence of
certain liens and certain mergers,  consolidations or sales of assets.  Pursuant
to a registration  rights  agreement  relating to the Notes,  the Registrant has
agreed to make an offer to exchange the Notes (the  "Exchange  Offer") for a new
issue of debt  securities  registered  under  the Act with  terms  substantially
identical to those of the Notes.  The  Registrant  will become  obligated to pay
specified amounts of liquidated  damages to holders of the Notes if the Exchange
Offer is not filed, commenced or consummated by specified dates.

    The  foregoing  summary  of the terms of the Notes  does not  purport  to be
complete and is subject to, and is  qualified  in its entirety by reference  to,
the provisions of the Notes and the Indenture,  dated March 31, 1998,  among the
Registrant,  the Guarantors  and State Street Bank and Trust  Company,  N.A., as
Trustee, pursuant to which the Notes were issued, a copy of which (with the form
of Note certificate) is filed as Exhibit 4.1 to this Current Report.

    Pursuant to Rule 135c under the Act,  copies of the press releases issued by
the Registrant on March 11, 1998 and March 31, 1998 relating to the offering and
sale of the Notes are filed as  Exhibits  99.1 and 99.2,  respectively,  to this
Current Report.


ITEM 7. - FINANCIAL STATEMENTS, PRO FORMA FINANCIAL STATEMENTS AND EXHIBITS

(a) Financial Statements

                                      (3)
<PAGE>



                         REPORT OF INDEPENDENT AUDITORS

The Board of Directors and Shareholders
LICO, Inc. and Subsidiaries

    We have audited the  accompanying  consolidated  balance sheet of LICO, Inc.
and  Subsidiaries  (the  Company)  as of  September  30,  1997,  and the related
consolidated  statements of income,  shareholders' equity and cash flows for the
year then ended. These consolidated  financial statements are the responsibility
of the  Company's  management.  Our  responsibility  is to express an opinion on
these consolidated financial statements based on our audit.

    We  conducted  our audit in  accordance  with  generally  accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

    In our opinion,  the  consolidated  financial  statements  referred to above
present fairly, in all material respects, the consolidated financial position of
LICO, Inc. and Subsidiaries at September 30, 1997, and the consolidated  results
of their  operations  and their cash flows for the year then ended in conformity
with generally accepted accounting principles.

                                  ERNST & YOUNG LLP

Kansas City, Missouri
November 21, 1997,
except for Note 11, as to which the date
is February 13, 1998

                                      (4)
<PAGE>




                           LICO, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEET

                               SEPTEMBER 30, 1997

ASSETS
Current assets:
     Cash.................................................. $   959,686
     Accounts receivable, net, including retainages
       of $4,997,093 in 1997...............................  25,992,204       
     Revenues earned in excess of billings 
       on uncompleted contracts............................  13,475,892      
     Raw materials inventory...............................   3,449,061
     Prepaid expenses......................................      56,159
     Deferred income taxes.................................     246,915
                                                             ----------
          Total current assets.............................  44,179,917

Property, plant and equipment, at cost:
     Land and buildings....................................   7,010,020
     Machinery and equipment...............................   3,344,080
     Office furniture and fixtures.........................   1,709,260
                                                             ----------
                                                             12,063,360
     Less accumulated depreciation and amortization          (3,029,380)
                                                             ----------
                                                              9,033,980

     Cash surrender value of officers' life insurance......   1,015,331
     Deferred income taxes.................................     353,166
     Other assets..........................................      76,000
                                                             ----------
                                                              1,444,497
                                                             ----------
          Total assets..................................... $54,658,394
                                                             ==========

LIABILITIES AND SHAREHOLDERS' EQUITY 
Current liabilities:
     Notes payable......................................... $ 7,500,000
     Current portion of capital leases.....................      90,159
     Current portion of long-term debt.....................     517,849
     Accounts payable......................................  17,514,795
     Billings in excess of revenues earned on uncompleted
        contracts..........................................   1,867,031 
     Payroll taxes and fringe benefits accrued
        and withheld.......................................   1,141,014
     Income taxes payable..................................     399,711
     Accrued compensation and other expenses...............   2,782,187
                                                             ----------
          Total current liabilities........................  31,812,746

Long-term debt, less current portion.......................   4,248,919
Accrued retirement benefits................................     872,878
Capital lease obligations, less current portion                 102,706
                                                             ----------
Total liabilities..........................................  37,037,249

Shareholders' equity:
     Preferred stock, $.10 par value:
        Authorized shares - 200,000, none issued...........           -
     Common stock, voting, $.10 par value:
        Authorized shares - 300,000
        Issued shares - 256,250............................      25,625
     Common stock, nonvoting, $.10 par value:
        Authorized shares - 2,700,000
        Issued and outstanding shares - 2,306,250..........     230,625
     Additional paid-in capital............................     119,621
     Retained earnings.....................................  17,380,778
     Treasury stock, at cost, 2,400 shares.................    (135,504)
                                                             ----------
          Total shareholders' equity.......................  17,621,145
                                                             ----------
          Total liabilities and shareholders' equity....... $54,658,394
                                                             ==========


                             See accompanying notes.
   
                                   (5)

<PAGE>




                           LICO, INC. AND SUBSIDIARIES

                        CONSOLIDATED STATEMENT OF INCOME

                          YEAR ENDED SEPTEMBER 30, 1997

Contract revenues.....................................  $126,551,381
Contract costs:
     Direct costs.....................................   102,812,871
     Indirect costs:
          Fabrication.................................     1,773,540
          Field.......................................       448,144
          Engineering.................................     1,526,269
          Other.......................................       162,934
                                                         -----------
                                                         106,723,758

Income from contracts.................................    19,827,623
Selling, general and administrative expenses..........    11,841,477
Litigation costs......................................     1,127,600
                                                         -----------

Income from operations................................     6,858,546
Interest expense......................................    (1,396,331)
Other income..........................................        60,223
                                                         -----------

Income before income taxes............................     5,522,438
Income tax provision..................................    (1,705,009)
                                                         -----------

Net income............................................   $ 3,817,429
                                                         ===========   




                             See accompanying notes.

                                      (6)
<PAGE>

<TABLE>
<CAPTION>



                           LICO, INC. AND SUBSIDIARIES

                 CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY

                          YEAR ENDED SEPTEMBER 30, 1997

                                          Voting  Nonvoting  Additional                              Total
                                          Common   Common     Paid-In     Retained     Treasury    Shareholders'
                                          Stock    Stock      Capital     Earnings       Stock       Equity
                                          ------  ---------  ----------  ----------    --------    -----------      
<S>                                      <C>      <C>        <C>        <C>           <C>          <C>        
Balance at September 30, 1996........... $25,625  $      -   $119,621   $13,793,974   $ (16,444)   $13,922,776
Purchase of 2,000 shares of voting
   common stock.........................       -         -          -             -    (119,060)      (119,060)
Issuance of 2,306,250 shares of non-
   voting common stock..................       -   230,625          -      (230,625)          -              -
Net income..............................       -         -          -     3,817,429           -      3,817,429
                                          --------------------------------------------------------------------
Balance at September 30, 1997........... $25,625  $230,625   $119,621   $17,380,778   $(135,504)   $17,621,145
                                          ====================================================================




                                                  See accompanying notes.

                                      (7)

</TABLE>

<PAGE>



                           LICO, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENT OF CASH FLOWS

                          YEAR ENDED SEPTEMBER 30, 1997

OPERATING ACTIVITIES
Net income...............................................   $ 3,817,429
Adjustments to reconcile net income to net cash
   provided by operating activities:
     Depreciation and amortization.......................       847,394
     Deferred income taxes...............................       760,271
     Changes in assets and liabilities:
          Accounts receivable............................    14,985,364
          Revenues earned in excess of billings on
             uncompleted contracts.......................    (8,399,723)
          Refundable income taxes........................       542,678
          Raw materials inventory........................       743,371
          Prepaid expenses...............................        (1,600)
          Accounts payable...............................     1,086,927
          Billings in excess of revenues
             earned on uncompleted contracts.............    (1,069,984)
          Income taxes payable...........................       399,711
          Accrued expenses...............................    (3,797,618)
          Accrued retirement benefits....................       113,623
                                                             ----------
     Net cash provided by operating activities               10,027,843

INVESTING ACTIVITIES
Capital expenditures.....................................    (7,547,079)
Increase in cash surrender value of officers'
     life insurance......................................      (121,067)       
                                                             ----------
Net cash used in investing activities....................    (7,668,146)

FINANCING ACTIVITIES
Net repayments under line-of-credit agreement                (6,650,000)
Proceeds from issuance of long-term debt.................     5,050,000
Principal payments on long-term debt
   and capital lease obligations.........................      (364,587)
Purchase of common stock for treasury....................      (119,060)
                                                             ----------
Net cash used in financing activities....................    (2,083,647)
                                                             ----------
Net increase in cash.....................................       276,050
Cash at beginning of year................................       683,636
                                                             ----------
Cash at end of year......................................    $  959,686
                                                             ==========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION 
Cash paid during the year for:
     Interest............................................    $1,328,110
                                                             ==========
     Income taxes........................................    $  184,186
                                                             ==========

SUPPLEMENTAL DISCLOSURE OF NONCASH FINANCING AND INVESTING ACTIVITIES
Additions to property, plant and equipment through
   issuance of capital lease obligations.................    $  117,083
                                                             ==========
Issuance of nonvoting common stock.......................    $  230,625
                                                             ==========


                             See accompanying notes.

                                      (8)

<PAGE>




                           LICO, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                               SEPTEMBER 30, 1997

1. SIGNIFICANT ACCOUNTING POLICIES

   PRINCIPLES OF CONSOLIDATION

    The  consolidated  financial  statements  include the accounts of LICO, Inc.
(the Company) and its wholly-owned  subsidiaries,  LICO Steel,  Inc. (LSI), LICO
Conveyor  Company (LCC),  Automatic  Systems  Conveyors  Limited (ASCL),  ASI of
Australia Pty. Ltd. (ASIA), and Automatic Systems,  Inc. (ASI),  including ASI's
wholly-owned subsidiary,  LICO International  Corporation (LIC). All significant
intercompany transactions are eliminated.


   EARNINGS ON CONTRACTS

    ASI,   including  LIC,  is  engaged   principally  in  the  manufacture  and
installation  of  industrial  conveyor  systems  and  other  materials  handling
products under fixed-price  contracts.  ASIA is engaged in negotiating  customer
contracts on a fixed-price basis of contracting for the installation of products
principally manufactured by ASI in Australia. ASCL acts as a sales agent for ASI
in Canada and is reimbursed for expenses on a cost plus basis. LSI is engaged in
steel erection and general  contracting  under fixed-price and time and material
contracts.  LCC is engaged in the manufacture  and  installation of portable and
stationary belt conveyors under  fixed-price  contracts.  Contract  revenues are
recognized  under the  percentage  of completion  method,  measured by comparing
direct costs incurred to total estimated direct costs.

    Changes in job  performance,  job  conditions  and estimated  profitability,
including those arising from final contract settlements, may result in revisions
to costs and income and are  recognized in the period in which the revisions are
determined.  In the event that a loss is anticipated on an uncompleted contract,
a provision for the estimated loss is made at the time it is determined.

    Billings  on  contracts  may  precede  or  lag  revenues  earned,  and  such
differences are reported in the balance sheet as current liabilities and current
assets, respectively.


   INVENTORY

    Steel inventory is stated at the lower of cost, determined using the average
cost  method,  or market.  All other  inventory  is stated at the lower of cost,
using the first-in, first-out method, or market.


   PROPERTY, PLANT AND EQUIPMENT

    Property,  plant and  equipment  are  stated at cost.  When  properties  are
retired or otherwise disposed of, the related cost and accumulated  depreciation
are removed  from the  respective  accounts  and any gain or loss is credited or
charged to income.  Maintenance  and  repairs are charged to expense in the year
incurred, and additions, improvements and betterments are capitalized.

    Depreciation and amortization of property and equipment is computed over the
estimated useful lives of the assets using the  straight-line  method for assets
purchased  prior  to  1992  and  an  accelerated  method  for  assets  purchased
thereafter.  The depreciation  and  amortization  periods range from three to 39
years.

                                      (9)
<PAGE>




   INCOME TAXES

    The Company  accounts  for income  taxes in  accordance  with  Statement  of
Financial  Accounting  Standards (SFAS) No. 109,  "Accounting for Income Taxes."
Under SFAS No. 109, the liability method is used in accounting for income taxes,
whereby  deferred  tax  assets  and  liabilities  are  determined  based  on the
differences  between financial reporting and tax bases of assets and liabilities
and are  measured  using  enacted tax rates and laws that will be in effect when
the differences are expected to reverse.

    The Company files a consolidated federal income tax return with ASI, LSI and
LCC. LIC, ASCL and ASIA file separate returns.

   USE OF ESTIMATES

    The  preparation of  consolidated  financial  statements in conformity  with
generally accepted  accounting  principles requires management to make estimates
and assumptions that affect the amounts  reported in the consolidated  financial
statements  and  accompanying  notes.  Actual  results  could  differ from those
estimates.

2. REVENUES AND BILLINGS ON UNCOMPLETED CONTRACTS

     At  September  30, 1997  revenues  and  billings on  uncompleted  contracts
     consisted of:

            Costs incurred on uncompleted contracts.....     $138,821,673 
            Estimated earnings..........................       24,467,281
                                                              -----------
            Revenues earned to date.....................      163,288,954
            Less billings to date.......................      151,680,093
                                                              -----------
                                                             $ 11,608,861
                                                              ===========

    Such amounts are included in the  accompanying  consolidated  balance sheets
under the following captions at September 30, 1997:

            Revenues earned in excess of billings
                on uncompleted contracts................     $ 13,475,892     
            Billings in excess of revenues earned 
                on uncompleted contracts................       (1,867,031)    
                                                              -----------
                                                             $ 11,608,861
                                                              ===========

3. NOTES PAYABLE AND LONG-TERM DEBT

    The  short-term  bank note  represents  the  balance  due on demand  under a
$22,000,000  revolving  line of credit  which  bears  interest at the prime rate
(8.5% at September  30,  1997).  The credit line is  collateralized  by accounts
receivable and inventory and is partially  guaranteed by certain shareholders of
the Company.

     Long-term debt at September 30, 1997 consists of the following:

       Real estate note, interest at 8.85%, collateralized
           by real estate, maturing November 2006...........   $2,426,805
       Equipment note, interest at 8.25%, collateralized 
           by equipment, maturing March 2004................    1,537,354
       Equipment note, interest at 8.15%, collateralized
           by equipment, maturing March 2002................      802,609
                                                                ---------
                                                                4,766,768
       Less current maturities..............................      517,849
                                                                ---------
                                                               $4,248,919
                                                                =========


                                      (10)
<PAGE>



                           LICO, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


    The aggregated  principal  amounts of long-term debt maturing in each of the
next five years ending September 30 and thereafter:

                  1998......................................   $  517,849
                  1999......................................      563,210
                  2000......................................      612,550
                  2001......................................      666,219
                  2002......................................      615,938
                    Thereafter..............................   $1,791,002
                                                                ---------
                                                               $4,766,768
                                                                =========


4. LEASES

      The amounts of  manufacturing  equipment  under capital lease  obligations
included in property, plant and equipment at September 30, 1997 are as follows:

                  Cost of assets held under capital leases       $405,672      
                  Accumulated amortization...................    (196,057)
                                                                  -------
                  Net assets held under capital leases           $209,615      
                                                                  =======


     LICO,  Inc.  also leases  offices and operating  facilities,  machinery and
 equipment,  and automobiles  under operating leases expiring through July 2001.
 Rental payments amounted to $1,930,143 for 1997. Certain property and equipment
 was purchased from a partnership owned by certain of the Company's shareholders
 during 1997 for  $6,350,811,  its  approximate  fair value,  and recorded as an
 addition to property and equipment for that amount.

     Future minimum lease  payments  under the capital leases and  noncancelable
operating leases for the next four years ending September 30 are as follows:

                                                              Capital  Operating
            FISCAL YEARS ENDING                               Leases     Leases
                                                              -------  ---------
             1998..........................................  $ 92,339  $118,835
             1999..........................................    71,106    56,589
             2000..........................................    46,189    14,205
             2001..........................................     8,404     7,750
                                                              -------   -------
             Total minimum lease payments..................   218,038  $197,379
                                                                        =======
             Less amounts representing interest                25,173
                                                              -------

             Present value of net minimum lease payments      192,865         
             Less current portion..........................    90,159
                                                              -------
                                                             $102,706
                                                              =======



                                      (11)
<PAGE>



                           LICO, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

5. INCOME TAXES

    Deferred  income taxes reflect the net tax effects of temporary  differences
between the carrying  amounts of assets and liabilities for financial  reporting
purposes  and the amounts  used for income tax  purposes.  These  items  consist
principally  of  research  and  experimentation  credits,  accrued  liabilities,
accrued bonuses,  accrued retirement  benefits and basis differences in accounts
receivable.  The  components  of the  Company's  net  deferred  tax  assets  and
liabilities at September 30, 1997 are as follows:

                  Total net deferred assets..........  $600,081
                  Less current portion...............   246,915
                                                        -------
                  Net noncurrent deferred assets.....  $353,166               
                                                        =======


    The income tax provision (benefit) for 1997 consists of the following:

            Current:
                 Federal........................      $ 651,870
                 State..........................        282,868
                 Foreign........................        (10,000)
                                                      ---------
            Total current.......................        944,738

            Deferred:
                 Federal........................        635,715
                 State..........................        124,556
                                                      ---------
            Total deferred......................        760,271
                                                      ---------
            Total provision for income taxes....     $1,705,009        
                                                      =========


    A reconciliation  of the income tax provision to the amounts computed at the
federal statutory rate is as follows:

            Provision at statutory rate.................. $1,932,853
            State income taxes, net of federal benefit...    180,000   
            Federal income tax credits...................   (560,000)
            Other, net...................................    152,156
                                                           ---------
            Net tax provision............................ $1,705,009
                                                           =========


    At September 30, 1997, the Company has unused  research and  experimentation
credits of  approximately  $400,000 for income tax purposes which may be used to
offset future taxable  income through the fiscal year ended  September 30, 2007.
The  Company  believes  it is  more  likely  than  not  that  the  research  and
experimentation  credits  will  be  utilized  prior  to  their  expiration  and,
accordingly, has not provided a valuation allowance to reduce the carrying value
of deferred tax assets.

                                      (12)
<PAGE>



                           LICO, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

6. SHAREHOLDERS' EQUITY

    In September  1997,  the Company  amended its Articles of  Incorporation  to
create  two  classes  of common  stock  designated  as Voting  Common  Stock and
Nonvoting Common Stock. In effect, all existing voting common stock shareholders
were issued nine shares of the newly  created  Nonvoting  Common Stock for every
share of Voting Common Stock owned.  Each holder of Voting Common Stock shall be
entitled to one vote for each share of voting stock owned.  Holders of Nonvoting
Common Stock shall have no voting rights. Except for voting rights, both classes
of  common  stock  share  the  same  preferences,  qualifications,  limitations,
restrictions, special rights and general rights.

7. COMMITMENTS AND RELATED-PARTY TRANSACTIONS

   STOCK REDEMPTION AGREEMENT

    The  Company's  stock  is  principally  owned  by  two  individuals   (major
shareholders)  accounting for  approximately  80% of the outstanding  voting and
nonvoting common stock. Upon the death of any minority shareholder,  the Company
will purchase all of the shareholder's shares at the greater of $10 per share or
the  book  value of such  shares.  Similarly,  upon  disability,  retirement  or
termination without cause of any minority shareholder,  the Company may purchase
the shares at book value.  The two  majority  shareholders  have  entered into a
separate cross purchase  agreement to purchase each others stock in the event of
a death of either major shareholder.

   RECEIVABLES

    Included  in accounts  receivable  at  September  30,  1997,  is advances of
$42,335 to certain officers and employees.

8. EMPLOYEE BENEFIT PLANS

    The Company  provides a defined  contribution  401(k) plan for all employees
not covered by  union-sponsored  plans.  Under the plan,  employees may elect to
contribute a percentage of their annual salary subject to Internal  Revenue Code
maximum limitations.  Regular accruals are recorded by the Company in amounts up
to one half of the employees' contributions but not exceeding a maximum of 3% of
the  employees'  base  compensation.  The  Company's  contribution  for 1997 was
$160,193.

    In addition,  the Company has an agreement with certain officers under which
the Company is obligated to pay  specified  amounts  upon  retirement  or lesser
amounts if termination  occurs prior to age 60. The Company has acquired certain
life insurance  policies that will  accumulate cash value to fund this plan. The
Company's liability under this plan is recorded at its present value (assuming a
7.5% interest  rate) and  presented in the balance  sheet as accrued  retirement
benefits.

    The Company also participates in various  multiemployer,  union-administered
pension plans that principally  cover  production  workers.  Union  compensation
arrangements  provide a stipulated amount per hour for fringe benefits including
pension benefits. The Company recognizes as an expense the required contribution
for all such fringe  benefits,  and any  amounts due and unpaid are  included in
current liabilities. The portion of the total fringe benefits related to pension
benefits has not been separately determined.

9. SIGNIFICANT GROUP CONCENTRATION OF CREDIT RISK

    At September 30, 1997,  substantially  all of the Company's  receivables are
obligations of automotive manufacturers.  The Company generally does not require
collateral  or other  security on the  accounts.  The credit risk is  controlled
through credit approvals, limits and monitoring procedures.

                                      (13)
<PAGE>



                           LICO, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

     The accounts receivable,  including  retainage,  at September 30, 1997 from
these major customers are as follows:

      General Motors.................................     $11,476,393
      Ford...........................................       5,494,280
      Lesco Design and Manufacturing Company 
          (contractor to Ford).......................       2,086,529     
                                                           ----------
                                                          $19,057,202
                                                           ==========

    Sales to two customers accounted for 52% and 26%, respectively,  of contract
revenues in 1997.

10. LITIGATION

    During 1997, ASI settled a dispute with a subcontractor  regarding breach of
contract.  The  settlement and related legal fees resulted in a charge to income
from  operations of  approximately  $1,127,600  in excess of amounts  accrued in
prior years.

11. SUBSEQUENT EVENTS

    Effective  February 13, 1998,  the Company signed a letter of intent whereby
it agreed to sell all of its  outstanding  voting and nonvoting  common stock to
Columbus McKinnon  Corporation for approximately $155 million less the amount of
funded debt  existing  at  closing.  This  transaction  is subject to  customary
closing conditions.



                                      (14)
<PAGE>




(b)  Pro Forma Financial Statements

    The pro forma consolidated balance sheet as of December 28, 1997 and the pro
forma  consolidated  statements of income for the nine months ended December 28,
1997 and the fiscal year ended March 31, 1997 have been  prepared to reflect (i)
the  consummation  of the  Offering and the  application  of the  estimated  net
proceeds therefrom, (ii) the consummation of the LICO Acquisition, and (iii) the
revisions to the Company's  credit  facilities.  The pro forma balance sheet was
prepared as if such  transactions  had occurred on December  28,  1997.  The pro
forma statements of income were prepared as if such transactions had occurred at
the  beginning of the periods  reflected  thereon.  In  addition,  the pro forma
statement  of income for the year ended  March 31,  1997 was  prepared as if the
acquisitions  of Yale and Lister had occurred at the beginning of that year. The
pro  forma  consolidated  financial  information  is  based  on  the  historical
financial  statements of the Company and LICO and should be read in  conjunction
with those financial  statements and notes thereto.  The  consolidated pro forma
financial information is not necessarily indicative of the financial position or
results of operations  which actually  would have occurred if such  transactions
had been  consummated on the dates  described,  nor does it purport to represent
the Company's future financial position or results of operations.

                                      (15)
<PAGE>

<TABLE>



<CAPTION>
                          COLUMBUS MCKINNON CORPORATION

                PRO FORMA CONSOLIDATED BALANCE SHEET (UNAUDITED)

                                DECEMBER 28, 1997

                                                                                   Refinancing and
                                       Columbus            Acquisition                 Offering     Pro Forma
                                      McKinnon(1) LICO(2)  Adjustments   Pro Forma   Adjustments   As Adjusted
                                      ----------- -------  -----------   ---------   -----------   -----------
                                                                 (Dollars in thousands)

ASSETS:
Current assets:
<S>                                    <C>       <C>       <C>           <C>         <C>             <C>      
     Cash and cash equivalents.......  $  5,883  $  1,278                $   7,161                   $   7,161
     Trade accounts receivable.......    79,726    46,889                  126,615                     126,615
     Unbilled revenues...............         -    16,189                   16,189                      16,189
     Inventories.....................    95,999     3,541                   99,540                      99,540
     Net assets held for sale........    10,302         -                   10,302                      10,302
     Prepaid expenses................     6,877       707                    7,584                       7,584
                                        -------    ------    -------       -------     -------         -------
Total current assets.................   198,787    68,604                  267,391                     267,391
Net property, plant & equipment......    63,489     9,059                   72,548                      72,548
Goodwill & other intangibles,
   net...............................   241,687         -        450 (3)   356,299       3,848 (7)     352,822
                                                             114,162 (4)                (7,325)(8)
Marketable securities................    16,293         -                   16,293                      16,293
Deferred taxes on income                  9,196       353                    9,549                       9,549
Other assets.........................     5,573     1,463                    7,036                       7,036
                                        -------    ------    -------       -------     -------         -------
Total assets......................... $ 535,025  $ 79,479  $ 114,612     $ 729,116   $  (3,477)      $ 725,639
                                        =======    ======    =======       =======     =======         =======


LIABILITIES AND SHAREHOLDERS' EQUITY:


Current liabilities:
     Notes payable to banks..........     $ 445  $ 15,500  $ (15,500)(5) $     445                   $     445
     Trade accounts payable              21,426    23,979                   45,405                      45,405
     Excess billings.................         -     6,713                    6,713                       6,713
     Accrued liabilities.............    41,956     6,795                   48,751      (2,930) (8)     45,821
     Current portion-long-term debt..    22,504       625       (625)(5)    22,504     (21,000) (9)      1,504
                                        -------    ------    -------       -------     -------         -------
Total current liabilities                86,331    53,612    (16,125)      123,818     (23,930)         99,888
Long-term debt, less current
   portion...........................   246,016     4,183    151,517 (5)   401,716    (195,620)(10)    227,096
                                                                                        21,000  (9)
Senior subordinated debt.............         -         -                        -     199,468 (10)    199,468
Other non-current liabilities........    39,068       904                   39,972                      39,972
                                        -------    ------    -------       -------     -------         -------
Total liabilities....................   371,415    58,699    135,392       565,506         918         566,424

Shareholders' equity:
     Common stock....................       137       256       (256)(6)       137                         137
     Additional paid-in capital......    96,024       120       (120)(6)    96,024                      96,024
     Retained earnings...............    73,743    20,539    (20,539)(6)    73,743      (4,395) (8)     69,348
     ESOP debt guarantee.............    (3,539)        -                   (3,539)                     (3,539)
     Other...........................    (2,755)     (135)       135 (6)    (2,755)                     (2,755)
                                        -------    ------    -------       -------     -------         -------
Total shareholders' equity...........   163,610    20,780    (20,780)      163,610      (4,395)        159,215
                                        -------    ------    -------       -------     -------         -------
Total liabilities and shareholders'
   equity............................ $ 535,025  $ 79,479  $ 114,612     $ 729,116   $  (3,477)      $ 725,639
                                        =======    ======    =======       =======     =======         =======


                                                         (footnotes on following page)

                                      (16)
<PAGE>



<FN>

(1) Represents the Company's consolidated balance sheet as of December 28, 1997.
(2) Represents  LICO's  consolidated  balance sheet as of December 31, 1997.
(3) Represents  deferred financing fees on bank debt required for acquisition of
    LICO by the Company.
(4) Represents goodwill in the amount of the LICO acquisition price in excess of
    the market value of the assets and liabilities acquired.
(5) Represents  debt  required  for the  LICO  Acquisition  by the  Company  and
    refinancing of LICO's debt, based on a purchase price of $155.0 million plus
    acquisition costs and financing fees, and including assumed debt.
(6) Represents  the  elimination  of LICO equity upon LICO's  acquisition by the
    Company in accordance with purchase accounting principles.
(7) Represents deferred financing fees incurred in connection with the Offering,
    net of deferred gain realized on Offering hedge.
(8) Represents   the  write-off  of  existing   deferred   financing  fees  upon
    replacement of the existing credit  facilities with the New Credit Agreement
    and the related reduction in taxes payable.
(9) Represents  the  reclassification  of the current  portion of long-term bank
    debt to non-current debt under the New Credit Agreement.
(10)Represents the refinancing of bank debt with the proceeds from the Offering,
    net of $3.85 million of expenses and realized  hedge gain,  and $0.5 million
    of original issue discount.

</FN>
</TABLE>

                                      (17)
<PAGE>

<TABLE>



<CAPTION>
                          COLUMBUS MCKINNON CORPORATION

             PRO FORMA CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)

                       NINE MONTHS ENDED DECEMBER 28, 1997

                                                                                 Refinancing and    Pro
                                        Columbus             Acquisition             Offering      Forma
                                       McKinnon(1)  LICO(2)  Adjustments Pro Forma  Adjustments  As Adjusted
                                       -----------  -------  ----------- ---------  -----------  -----------
                                                                 (Dollars in thousands)

<S>                                      <C>       <C>       <C>          <C>         <C>       <C>      
Net sales............................... $372,442  $117,948               $490,390              $ 490,390
Cost of products sold...................  265,990    98,664                364,654                364,654
                                          -------   -------                -------                -------
Gross profit............................  106,452    19,284                125,736                125,736
Selling, general & administrative
      expenses..........................   51,445     9,830   (2,278)(3)    58,997                 58,997
Amortization of intangibles.............    7,581         -    3,425 (4)    11,006                 11,006
                                          -------   -------    -----       -------                -------
                                           59,026     9,830    1,147        70,003                 70,003
                                          -------   -------    -----       -------                -------
Income from operations..................   47,426     9,454   (1,147)       55,733                 55,733
Interest and debt expense...............   17,729     1,150    7,152 (5)    26,031     (820)(7)    25,211
Interest and other income...............    1,076        56                  1,132                  1,132
                                          -------   -------    -----       -------     ----       -------
Income before income taxes,
   Minority interest and extraordinary
    charge..............................   30,773     8,360   (8,299)       30,834      820        31,654
Income tax expense......................   15,227     2,657   (1,950)(6)    15,934      328 (8)    16,262
                                          -------   -------    -----       -------     ----       -------
Income before minority interest and
Extraordinary charge.................... $ 15,546  $  5,703  $(6,349)     $ 14,900    $ 492      $ 15,392
                                          =======   =======    =====       =======     ====       =======
EBITDA(9)............................... $ 62,746  $ 10,116  $ 2,278      $ 75,140    $   -      $ 75,140
                                          =======   =======    =====       =======     ====       =======

<FN>

(1) Represents  the Company's  consolidated  results of operations  for the nine
    months ended December 28, 1997.
(2) Represents  LICO's  consolidated  results of operations  for the  nine-month
    period ended December 31, 1997.
(3) Represents the portion of LICO owners'  compensation  expenses which will be
    eliminated upon acquisition by Columbus McKinnon.
(4) Represents  amortization  of goodwill which will result from the acquisition
    of LICO by Columbus McKinnon.
(5) Represents  the  incremental  interest  and  debt  expense  to  finance  the
    acquisition of LICO by Columbus McKinnon.
(6) Represents the tax effect of LICO pro forma adjustments to selling,  general
    and  administrative  expenses and interest and debt expense in items (3) and
    (5) above.
(7) Represents  the net savings in interest and debt expense  resulting from the
    effect of the New Credit Agreement at 6.875% and the Offering at 8.50%.
(8) Represents the tax effect of interest and debt expense pro forma  adjustment
    per (7) above.
(9) EBITDA  represents  income  before  interest  and debt  expense,  income tax
    expense,  depreciation and amortization,  minority  interest,  extraordinary
    charge and  cumulative  effect of  accounting  change.  EBITDA is  presented
    because it provides useful  information  regarding the Company's  ability to
    service and/or incur debt. EBITDA should not be considered in isolation from
    or as a substitute for net income,  cash flows from operating  activities or
    other consolidated income or cash flow statement data prepared in accordance
    with  generally   accepted   accounting   principles  or  as  a  measure  of
    profitability or liquidity.

</FN>
</TABLE>
                                      (18)
<PAGE>


<TABLE>


<CAPTION>
                                     COLUMBUS MCKINNON CORPORATION

                          PRO FORMA CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)

                                        YEAR ENDED MARCH 31, 1997

                                         Yale & Lister                                             Refinancing and
                              Columbus   Preacquisition  Combined            Acquisition              Offering      Pro Forma
                             McKinnon(1)  Pro Forma(2)  Pro Forma   LICO(3)  Adjustments  Pro Forma  Adjustments   As Adjusted
                             ----------   -----------   ---------   ------   -----------  ---------  -----------   -----------
                                                              (Dollars in thousands)

<S>                          <C>           <C>          <C>        <C>        <C>           <C>        <C>          <C>     
Net sales....................$359,424      $110,901     $470,325   $134,168                 $604,493                $604,493
Cost of products sold........ 251,987        78,405      330,392    121,867                  452,259                 452,259
                              -------       -------      -------    -------                  -------                 -------
Gross profit................. 107,437        32,496      139,933     12,301                  152,234                 152,234
Selling, general &
  administrative expenses....  57,186        17,718       74,904      9,819     (1,892)(4)    82,831                  82,831
Amortization of intangibles..   5,197         4,970       10,167          -      4,566 (5)    14,733                  14,733
                              -------       -------      -------    -------     ------       -------                 -------
                               62,383        22,688       85,071      9,819      2,674        97,564                  97,564
                              -------       -------      -------    -------     ------       -------                 -------
Income from operations.......  45,054         9,808       54,862      2,482     (2,674)       54,670                  54,670
Interest and debt expense....  11,930        12,967       24,897        916      9,947 (6)    35,760    (1,261)(8)    34,499
Interest and other income....   1,168             -        1,168         75                    1,243                   1,243
                              -------       -------      -------    -------     ------       -------    ------       -------
Income before income taxes,
  minority interest and ex-
  traordinary charge.........  34,292        (3,159)      31,133      1,641    (12,621)       20,153     1,261        21,414
Income tax expense...........  15,617           903       16,520         65     (3,222)(7)    13,363       504 (9)    13,867
                              -------       -------      -------    -------     ------       -------    ------       -------
Income before minority
  interest and extraordinary
  charge.....................$ 18,675      $ (4,062)    $ 14,613   $  1,576   $ (9,399)     $  6,790   $   757      $  7,547
                              =======       =======     ========    =======     ======       =======    ======       =======
EBITDA(10)...................$ 57,507      $ 16,727     $ 74,234   $  3,209   $  1,892      $ 79,355   $     -      $ 79,335
                              =======       =======     ========    =======     ======       =======    ======       =======

<FN>

(1) Represents the Company's  consolidated  results of operations for the fiscal
    year ended March 31, 1997, including Yale and Lister since their acquisition
    by the Company on October 17, 1996 and December 19, 1996, respectively.
(2) Represents Yale's and Lister's consolidated results of continuing operations
    from April 1, 1996 through their date of acquisition by Columbus McKinnon on
    October 17, 1996 and December 19, 1996, respectively, along with the effects
    of  acquisition.  Those pro forma effects  include the  following:  (a) $2.5
    million  reduction  of selling,  general  and  administrative  expenses  for
    elimination of Yale corporate offices and other administrative expenses; (b)
    $4.1 million of additional goodwill  amortization  expense; (c) $8.4 million
    incremental  interest and debt expense to finance the acquisitions;  and (d)
    $2.4 million  reduction in income tax expense  resulting  from items (a) and
    (c) above.
(3) Represents  LICO's  consolidated  results of operations for the twelve-month
    period ended March 31, 1997.
(4) Represents the portion of LICO owners'  compensation  expenses which will be
    eliminated upon acquisition by Columbus McKinnon.
(5) Represents  amortization  of goodwill which will result from the acquisition
    of LICO by Columbus McKinnon.
(6) Represents  the  incremental  interest  and  debt  expense  to  finance  the
    acquisition of LICO by Columbus McKinnon.
(7) Represents the tax effect of LICO pro forma adjustments to selling,  general
    and  administrative  expenses and interest and debt expense in items (4) and
    (6) above.
(8) Represents  the net savings in interest and debt expense  resulting from the
    effect of the New Credit Agreement at 6.875% and the Offering at 8.50%.
(9) Represents the tax effect of interest and debt expense pro forma  adjustment
    per (8) above.
(10)EBITDA  represents  income  before  interest  and debt  expense,  income tax
    expense,  depreciation and amortization,  minority  interest,  extraordinary
    charge and  cumulative  effect of  accounting  change.  EBITDA is  presented
    because it provides useful  information  regarding the Company's  ability to
    service and/or incur debt. EBITDA should not be considered in isolation from
    or as a substitute for net income,  cash flows from operating  activities or
    other consolidated income or cash flow statement data prepared in accordance
    with  generally   accepted   accounting   principles  or  as  a  measure  of
    profitability or liquidity.

</FN>
</TABLE>
                                      (19)
<PAGE>




(c) Exhibits:

    4.1 Conformed  copy of the  Indenture,  dated as of March  31,  1998,  among
        Columbus  McKinnon  Corporation,  the Guarantors  named on the signature
        pages thereto and State Street Bank and Trust Company, N.A., as Trustee,
        including the form of Senior Subordinated Notes due 2008.

    4.2 A/B Exchange Registration Rights Agreement dated as of March 31, 1998 by
        and among Columbus  McKinnon  Corporation,  the Guarantors  named on the
        signature pages thereto and Bear, Stearns & Co. Inc. and Goldman,  Sachs
        & Co.

    4.3 Supplemental Indenture dated as of  March 31, 1998,  among  LICO,  Inc.,
        Automatic Systems, Inc., LICO Steel Inc., Columbus McKinnon  Corporation
        the other Guarantors  and  State Street Bank and Trust Company, N.A., as
        trustee.

   10.1 Stock  Purchase  Agreement  dated as of March 11,  1998  among  Columbus
        McKinnon  Corporation,  as Buyer, and the shareholders of LICO, Inc., as
        Sellers.

   10.2 Credit  Agreement  dated as of March 31,  1998 among  Columbus  McKinnon
        Corporation,  as Borrower,  the banks,  financial institutions and other
        institutional  lenders named therein as Initial Lenders,  Fleet National
        Bank, as the Initial  Issuing Bank,  Fleet  National  Bank, as the Swing
        Line Bank and Fleet National Bank, as the Administrative Agent.

   23.1 Consent of Ernst & Young LLP as Independent Auditors of LICO, Inc.

   99.1 Text of  Registrant's  press release dated March 11, 1998  (incorporated
        by reference to Exhibit 99 to the  Registrant's  Current  Report on Form
        8-K dated March 11, 1998 and filed on March 23, 1998).

   99.2 Text of Registrant's press release dated March 31, 1998.



                                      (20)
<PAGE>



                                   SIGNATURES

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

                                       COLUMBUS McKINNON CORPORATION


Dated:  April 9, 1998                  By:  /s/ Robert L. Montgomery
        -------------                       ------------------------
                                            Executive Vice President and
                                            Chief Financial Officer
                                           




                                      (21)
[{"type": "8-K", "sequence": "1", "description": "FORM 8-K MARCH 31, 1998", "secsgml_size_bytes": 62753}]
{"company-data": {"conformed-name": "COLUMBUS MCKINNON CORP", "cik": "0001005229", "assigned-sic": "3531", "irs-number": "160547600", "state-of-incorporation": "NY", "fiscal-year-end": "0331"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "000-27618", "film-number": "98590630"}, "business-address": {"street1": "140 JOHN JAMES AUDUBON PKWY", "city": "AMHERST", "state": "NY", "zip": "14228-1197", "phone": "7166895400"}, "mail-address": {"street1": "140 JOHN JAMES AUDUBON PARKWAY", "city": "AMHERST", "state": "NY", "zip": "14228-1197"}}
UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON D.C. 20549

                                    FORM 8-K

                                 CURRENT REPORT

                     PURSUANT TO SECTION 13 OR 15(D) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                         Commission File Number 0-27618

        Date of Report (Date of earliest event reported): March 31, 1998

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

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

          140 JOHN JAMES AUDUBON PARKWAY, AMHERST, NEW YORK 14228-1197
          ------------------------------------------------------------
               (Address of principal executive offices)     (Zip Code)

       Registrant's telephone number, including area code: (716) 689-5400
                                                           --------------
                                 NOT APPLICABLE
          -------------------------------------------------------------   
              (Former name, former address and former fiscal year,
                          if changed since last report)
ITEM 2. - ACQUISITION OR DISPOSITION OF ASSETS

(a) On March 11, 1998,  the Registrant  entered into a Stock Purchase  Agreement
(the  "Stock  Purchase  Agreement"  among  the  Registrant,  as  Buyer,  and the
shareholders  of LICO,  Inc., as Sellers.  Effective at the Closing on March 31,
1998,  the Sellers sold all of the shares of LICO,  Inc. to the  Registrant  for
$155 million less the greater of (x) the sum of $7.059  million and all costs or
expenses  paid by the  Registrant or any  Subsidiary  relating to or incurred in
connection  with this Stock  Purchase  Agreement or (y) Funded Debt of LICO. The
acquisition  was financed by the proceeds from the New Credit  Agreement and the
Private  Placement of 8 1/2% Senior  Subordinated  Notes due 2008,  described in
Item 5 (a) and (b) below, respectively.

(b) LICO, through its subsidiaries, is a designer, manufacturer and installer of
custom  conveyor  and  automated  material  handling  systems  with its  primary
fabrication facility and headquarters in Kansas City, Missouri.

ITEM 5.  -  OTHER EVENTS

(A) NEW CREDIT  AGREEMENT.  On March 31,  1998,  the  Registrant  entered into a
Credit Agreement (the "Credit Agreement") among the Registrant, as Borrower, the
banks,  financial institutions and other institutional lenders named therein, as
Initial  Lenders,  Fleet  National  Bank,  as the Initial  Issuing  Bank,  Fleet
National  Bank,  as  the  Swing  Line  Bank,  and  Fleet  National  Bank  as the
Administrative  Agent. The terms of the Credit Agreement provide for a five year
revolving credit facility with initial  borrowing  availability of $300 million.
The  proceeds  of  borrowings  under the  Credit  Agreement,  together  with the
proceeds  from the sale of the Notes  described in (b) below,  were used to fund
the acquisition of LICO, Inc. and repay borrowings under the Registrant's former
credit facility.

    Borrowings  under the Credit  Agreement  bear  interest  at a rate per annum
equal  to, at the  Registrant's  option,  either  (i) the  greater  of (a) Fleet
National  Bank's prime rate or (b) the Federal Funds Rate plus one-half of 1% or
(ii) LIBOR plus a margin (the "Applicable Margin") ranging from 0.375% to 1.25%,
depending upon the Registrant's ratio (the :"Leverage Ratio") of Funded Debt (as
defined)  to EBITDA (as  defined).  The  Registrant  is also  required  to pay a
commitment  fee at a rate per  annum  ranging  from  .125% to .275% of the total
borrowing  availability  under the Credit  Agreement  (the "Facility Fee Rate"),
determined  on the  basis  of the  Company's  Leverage  Ratio.  Based  upon  the
Company's most recently  determined  Leverage Ratio,  the Applicable  Margin and
Facility  Fee Rate are  1.25%  and  .275%  respectively.  The  Credit  Agreement
contains  customary  affirmative  and negative  covenants,  including  financial
covenants requiring the maintenance of specified  consolidated interest coverage
and leverage ratios and amounts of consolidated net worth.

    Borrowings  under the  Credit  Agreement  are  secured  by a first  priority
security  interest  on all  personal  property of the Company and certain of its
subsidiaries, and a pledge of stock of stock of subsidiaries (limited to 65% for
foreign  subsidiaries).  In addition,  certain  subsidiaries of the Company have
jointly and severally guaranteed the obligations of the Company under the Credit
Agreement.

(B) PRIVATE PLACEMENT OF 8 1/2% SENIOR SUBORDINATED NOTES DUE 2008. On March 31,
1998, the Registrant  completed the sale of $200 million principal amount of its
8 1/2% Senior  Subordinated  Notes due 2008 (the "Notes") in a private placement
under Section 4(2) of the  Securities  Act of 1933, as amended (the "Act"),  and
Rule 144A thereunder, at a purchase price of 99.734% of the face amount thereof.
The net proceeds from the sale of the Notes,  together with borrowings under the
Registrant's new credit facility  described in (a) above,  were used to fund the
acquisition of LICO, Inc. and repay  borrowings  under the  Registrant's  former
credit  facility.  The  Notes  bear  interest  at the rate of 8 1/2% per  annum,
payable  semi-annually,  and will  mature  on April 1,  2008.  Upon a change  of
Control  (as  defined)  of the  Registrant,  holders  of the Notes will have the
right, subject to certain restrictions and conditions, to require the Registrant
to purchase all or any of their Notes at 101% of the  principal  amount  thereof
plus accrued interest thereon.  The Notes are general  unsecured  obligations of
the  Registrant  and are  subordinated  in right of payment to all  existing and
future Senior Debt (as defined) of the Registrant. The Notes are guaranteed on a
senior  subordinated  basis by certain of the  Registrant's  existing and future
subsidiaries (the "Guarantors").  The Indenture pursuant to which the Notes were
issued contains various restrictive  covenants,  including covenants restricting
the payment of  dividends,  the  repurchase  of capital  stock and the making of
certain other  Restricted  Payments 

                                      (2)
(as  defined),  the  incurrence of additional  indebtedness,  the  incurrence of
certain liens and certain mergers,  consolidations or sales of assets.  Pursuant
to a registration  rights  agreement  relating to the Notes,  the Registrant has
agreed to make an offer to exchange the Notes (the  "Exchange  Offer") for a new
issue of debt  securities  registered  under  the Act with  terms  substantially
identical to those of the Notes.  The  Registrant  will become  obligated to pay
specified amounts of liquidated  damages to holders of the Notes if the Exchange
Offer is not filed, commenced or consummated by specified dates.

    The  foregoing  summary  of the terms of the Notes  does not  purport  to be
complete and is subject to, and is  qualified  in its entirety by reference  to,
the provisions of the Notes and the Indenture,  dated March 31, 1998,  among the
Registrant,  the Guarantors  and State Street Bank and Trust  Company,  N.A., as
Trustee, pursuant to which the Notes were issued, a copy of which (with the form
of Note certificate) is filed as Exhibit 4.1 to this Current Report.

    Pursuant to Rule 135c under the Act,  copies of the press releases issued by
the Registrant on March 11, 1998 and March 31, 1998 relating to the offering and
sale of the Notes are filed as  Exhibits  99.1 and 99.2,  respectively,  to this
Current Report.

ITEM 7. - FINANCIAL STATEMENTS, PRO FORMA FINANCIAL STATEMENTS AND EXHIBITS

(a) Financial Statements

                                      (3)
REPORT OF INDEPENDENT AUDITORS

The Board of Directors and Shareholders
LICO, Inc. and Subsidiaries

    We have audited the  accompanying  consolidated  balance sheet of LICO, Inc.
and  Subsidiaries  (the  Company)  as of  September  30,  1997,  and the related
consolidated  statements of income,  shareholders' equity and cash flows for the
year then ended. These consolidated  financial statements are the responsibility
of the  Company's  management.  Our  responsibility  is to express an opinion on
these consolidated financial statements based on our audit.

    We  conducted  our audit in  accordance  with  generally  accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

    In our opinion,  the  consolidated  financial  statements  referred to above
present fairly, in all material respects, the consolidated financial position of
LICO, Inc. and Subsidiaries at September 30, 1997, and the consolidated  results
of their  operations  and their cash flows for the year then ended in conformity
with generally accepted accounting principles.

                                  ERNST & YOUNG LLP

Kansas City, Missouri
November 21, 1997,
except for Note 11, as to which the date
is February 13, 1998

                                      (4)
LICO, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEET

                               SEPTEMBER 30, 1997

ASSETS
Current assets:
     Cash.................................................. $   959,686
     Accounts receivable, net, including retainages
       of $4,997,093 in 1997...............................  25,992,204       
     Revenues earned in excess of billings 
       on uncompleted contracts............................  13,475,892      
     Raw materials inventory...............................   3,449,061
     Prepaid expenses......................................      56,159
     Deferred income taxes.................................     246,915
                                                             ----------
          Total current assets.............................  44,179,917

Property, plant and equipment, at cost:
     Land and buildings....................................   7,010,020
     Machinery and equipment...............................   3,344,080
     Office furniture and fixtures.........................   1,709,260
                                                             ----------
                                                             12,063,360
     Less accumulated depreciation and amortization          (3,029,380)
                                                             ----------
                                                              9,033,980

     Cash surrender value of officers' life insurance......   1,015,331
     Deferred income taxes.................................     353,166
     Other assets..........................................      76,000
                                                             ----------
                                                              1,444,497
                                                             ----------
          Total assets..................................... $54,658,394
                                                             ==========

LIABILITIES AND SHAREHOLDERS' EQUITY 
Current liabilities:
     Notes payable......................................... $ 7,500,000
     Current portion of capital leases.....................      90,159
     Current portion of long-term debt.....................     517,849
     Accounts payable......................................  17,514,795
     Billings in excess of revenues earned on uncompleted
        contracts..........................................   1,867,031 
     Payroll taxes and fringe benefits accrued
        and withheld.......................................   1,141,014
     Income taxes payable..................................     399,711
     Accrued compensation and other expenses...............   2,782,187
                                                             ----------
          Total current liabilities........................  31,812,746

Long-term debt, less current portion.......................   4,248,919
Accrued retirement benefits................................     872,878
Capital lease obligations, less current portion                 102,706
                                                             ----------
Total liabilities..........................................  37,037,249

Shareholders' equity:
     Preferred stock, $.10 par value:
        Authorized shares - 200,000, none issued...........           -
     Common stock, voting, $.10 par value:
        Authorized shares - 300,000
        Issued shares - 256,250............................      25,625
     Common stock, nonvoting, $.10 par value:
        Authorized shares - 2,700,000
        Issued and outstanding shares - 2,306,250..........     230,625
     Additional paid-in capital............................     119,621
     Retained earnings.....................................  17,380,778
     Treasury stock, at cost, 2,400 shares.................    (135,504)
                                                             ----------
          Total shareholders' equity.......................  17,621,145
                                                             ----------
          Total liabilities and shareholders' equity....... $54,658,394
                                                             ==========

                             See accompanying notes.
   
                                   (5)
LICO, INC. AND SUBSIDIARIES

                        CONSOLIDATED STATEMENT OF INCOME

                          YEAR ENDED SEPTEMBER 30, 1997

Contract revenues.....................................  $126,551,381
Contract costs:
     Direct costs.....................................   102,812,871
     Indirect costs:
          Fabrication.................................     1,773,540
          Field.......................................       448,144
          Engineering.................................     1,526,269
          Other.......................................       162,934
                                                         -----------
                                                         106,723,758

Income from contracts.................................    19,827,623
Selling, general and administrative expenses..........    11,841,477
Litigation costs......................................     1,127,600
                                                         -----------

Income from operations................................     6,858,546
Interest expense......................................    (1,396,331)
Other income..........................................        60,223
                                                         -----------

Income before income taxes............................     5,522,438
Income tax provision..................................    (1,705,009)
                                                         -----------

Net income............................................   $ 3,817,429
                                                         ===========   

                             See accompanying notes.

                                      (6)
LICO, INC. AND SUBSIDIARIES

                 CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY

                          YEAR ENDED SEPTEMBER 30, 1997

                                          Voting  Nonvoting  Additional                              Total
                                          Common   Common     Paid-In     Retained     Treasury    Shareholders'
                                          Stock    Stock      Capital     Earnings       Stock       Equity
                                          ------  ---------  ----------  ----------    --------    -----------
Balance at September 30, 1996........... $25,625  $      -   $119,621   $13,793,974   $ (16,444)   $13,922,776
Purchase of 2,000 shares of voting
   common stock.........................       -         -          -             -    (119,060)      (119,060)
Issuance of 2,306,250 shares of non-
   voting common stock..................       -   230,625          -      (230,625)          -              -
Net income..............................       -         -          -     3,817,429           -      3,817,429
                                          --------------------------------------------------------------------
Balance at September 30, 1997........... $25,625  $230,625   $119,621   $17,380,778   $(135,504)   $17,621,145
                                          ====================================================================

                                                  See accompanying notes.

                                      (7)
LICO, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENT OF CASH FLOWS

                          YEAR ENDED SEPTEMBER 30, 1997

OPERATING ACTIVITIES
Net income...............................................   $ 3,817,429
Adjustments to reconcile net income to net cash
   provided by operating activities:
     Depreciation and amortization.......................       847,394
     Deferred income taxes...............................       760,271
     Changes in assets and liabilities:
          Accounts receivable............................    14,985,364
          Revenues earned in excess of billings on
             uncompleted contracts.......................    (8,399,723)
          Refundable income taxes........................       542,678
          Raw materials inventory........................       743,371
          Prepaid expenses...............................        (1,600)
          Accounts payable...............................     1,086,927
          Billings in excess of revenues
             earned on uncompleted contracts.............    (1,069,984)
          Income taxes payable...........................       399,711
          Accrued expenses...............................    (3,797,618)
          Accrued retirement benefits....................       113,623
                                                             ----------
     Net cash provided by operating activities               10,027,843

INVESTING ACTIVITIES
Capital expenditures.....................................    (7,547,079)
Increase in cash surrender value of officers'
     life insurance......................................      (121,067)       
                                                             ----------
Net cash used in investing activities....................    (7,668,146)

FINANCING ACTIVITIES
Net repayments under line-of-credit agreement                (6,650,000)
Proceeds from issuance of long-term debt.................     5,050,000
Principal payments on long-term debt
   and capital lease obligations.........................      (364,587)
Purchase of common stock for treasury....................      (119,060)
                                                             ----------
Net cash used in financing activities....................    (2,083,647)
                                                             ----------
Net increase in cash.....................................       276,050
Cash at beginning of year................................       683,636
                                                             ----------
Cash at end of year......................................    $  959,686
                                                             ==========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION 
Cash paid during the year for:
     Interest............................................    $1,328,110
                                                             ==========
     Income taxes........................................    $  184,186
                                                             ==========

SUPPLEMENTAL DISCLOSURE OF NONCASH FINANCING AND INVESTING ACTIVITIES
Additions to property, plant and equipment through
   issuance of capital lease obligations.................    $  117,083
                                                             ==========
Issuance of nonvoting common stock.......................    $  230,625
                                                             ==========

                             See accompanying notes.

                                      (8)
LICO, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                               SEPTEMBER 30, 1997

1. SIGNIFICANT ACCOUNTING POLICIES

   PRINCIPLES OF CONSOLIDATION

    The  consolidated  financial  statements  include the accounts of LICO, Inc.
(the Company) and its wholly-owned  subsidiaries,  LICO Steel,  Inc. (LSI), LICO
Conveyor  Company (LCC),  Automatic  Systems  Conveyors  Limited (ASCL),  ASI of
Australia Pty. Ltd. (ASIA), and Automatic Systems,  Inc. (ASI),  including ASI's
wholly-owned subsidiary,  LICO International  Corporation (LIC). All significant
intercompany transactions are eliminated.

   EARNINGS ON CONTRACTS

    ASI,   including  LIC,  is  engaged   principally  in  the  manufacture  and
installation  of  industrial  conveyor  systems  and  other  materials  handling
products under fixed-price  contracts.  ASIA is engaged in negotiating  customer
contracts on a fixed-price basis of contracting for the installation of products
principally manufactured by ASI in Australia. ASCL acts as a sales agent for ASI
in Canada and is reimbursed for expenses on a cost plus basis. LSI is engaged in
steel erection and general  contracting  under fixed-price and time and material
contracts.  LCC is engaged in the manufacture  and  installation of portable and
stationary belt conveyors under  fixed-price  contracts.  Contract  revenues are
recognized  under the  percentage  of completion  method,  measured by comparing
direct costs incurred to total estimated direct costs.

    Changes in job  performance,  job  conditions  and estimated  profitability,
including those arising from final contract settlements, may result in revisions
to costs and income and are  recognized in the period in which the revisions are
determined.  In the event that a loss is anticipated on an uncompleted contract,
a provision for the estimated loss is made at the time it is determined.

    Billings  on  contracts  may  precede  or  lag  revenues  earned,  and  such
differences are reported in the balance sheet as current liabilities and current
assets, respectively.

   INVENTORY

    Steel inventory is stated at the lower of cost, determined using the average
cost  method,  or market.  All other  inventory  is stated at the lower of cost,
using the first-in, first-out method, or market.

   PROPERTY, PLANT AND EQUIPMENT

    Property,  plant and  equipment  are  stated at cost.  When  properties  are
retired or otherwise disposed of, the related cost and accumulated  depreciation
are removed  from the  respective  accounts  and any gain or loss is credited or
charged to income.  Maintenance  and  repairs are charged to expense in the year
incurred, and additions, improvements and betterments are capitalized.

    Depreciation and amortization of property and equipment is computed over the
estimated useful lives of the assets using the  straight-line  method for assets
purchased  prior  to  1992  and  an  accelerated  method  for  assets  purchased
thereafter.  The depreciation  and  amortization  periods range from three to 39
years.

                                      (9)
INCOME TAXES

    The Company  accounts  for income  taxes in  accordance  with  Statement  of
Financial  Accounting  Standards (SFAS) No. 109,  "Accounting for Income Taxes."
Under SFAS No. 109, the liability method is used in accounting for income taxes,
whereby  deferred  tax  assets  and  liabilities  are  determined  based  on the
differences  between financial reporting and tax bases of assets and liabilities
and are  measured  using  enacted tax rates and laws that will be in effect when
the differences are expected to reverse.

    The Company files a consolidated federal income tax return with ASI, LSI and
LCC. LIC, ASCL and ASIA file separate returns.

   USE OF ESTIMATES

    The  preparation of  consolidated  financial  statements in conformity  with
generally accepted  accounting  principles requires management to make estimates
and assumptions that affect the amounts  reported in the consolidated  financial
statements  and  accompanying  notes.  Actual  results  could  differ from those
estimates.

2. REVENUES AND BILLINGS ON UNCOMPLETED CONTRACTS

     At  September  30, 1997  revenues  and  billings on  uncompleted  contracts
     consisted of:

            Costs incurred on uncompleted contracts.....     $138,821,673 
            Estimated earnings..........................       24,467,281
                                                              -----------
            Revenues earned to date.....................      163,288,954
            Less billings to date.......................      151,680,093
                                                              -----------
                                                             $ 11,608,861
                                                              ===========

    Such amounts are included in the  accompanying  consolidated  balance sheets
under the following captions at September 30, 1997:

            Revenues earned in excess of billings
                on uncompleted contracts................     $ 13,475,892     
            Billings in excess of revenues earned 
                on uncompleted contracts................       (1,867,031)    
                                                              -----------
                                                             $ 11,608,861
                                                              ===========

3. NOTES PAYABLE AND LONG-TERM DEBT

    The  short-term  bank note  represents  the  balance  due on demand  under a
$22,000,000  revolving  line of credit  which  bears  interest at the prime rate
(8.5% at September  30,  1997).  The credit line is  collateralized  by accounts
receivable and inventory and is partially  guaranteed by certain shareholders of
the Company.

     Long-term debt at September 30, 1997 consists of the following:

       Real estate note, interest at 8.85%, collateralized
           by real estate, maturing November 2006...........   $2,426,805
       Equipment note, interest at 8.25%, collateralized 
           by equipment, maturing March 2004................    1,537,354
       Equipment note, interest at 8.15%, collateralized
           by equipment, maturing March 2002................      802,609
                                                                ---------
                                                                4,766,768
       Less current maturities..............................      517,849
                                                                ---------
                                                               $4,248,919
                                                                =========

                                      (10)
LICO, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

    The aggregated  principal  amounts of long-term debt maturing in each of the
next five years ending September 30 and thereafter:

                  1998......................................   $  517,849
                  1999......................................      563,210
                  2000......................................      612,550
                  2001......................................      666,219
                  2002......................................      615,938
                    Thereafter..............................   $1,791,002
                                                                ---------
                                                               $4,766,768
                                                                =========

4. LEASES

      The amounts of  manufacturing  equipment  under capital lease  obligations
included in property, plant and equipment at September 30, 1997 are as follows:

                  Cost of assets held under capital leases       $405,672      
                  Accumulated amortization...................    (196,057)
                                                                  -------
                  Net assets held under capital leases           $209,615      
                                                                  =======

     LICO,  Inc.  also leases  offices and operating  facilities,  machinery and
 equipment,  and automobiles  under operating leases expiring through July 2001.
 Rental payments amounted to $1,930,143 for 1997. Certain property and equipment
 was purchased from a partnership owned by certain of the Company's shareholders
 during 1997 for  $6,350,811,  its  approximate  fair value,  and recorded as an
 addition to property and equipment for that amount.

     Future minimum lease  payments  under the capital leases and  noncancelable
operating leases for the next four years ending September 30 are as follows:

                                                              Capital  Operating
            FISCAL YEARS ENDING                               Leases     Leases
                                                              -------  ---------
             1998..........................................  $ 92,339  $118,835
             1999..........................................    71,106    56,589
             2000..........................................    46,189    14,205
             2001..........................................     8,404     7,750
                                                              -------   -------
             Total minimum lease payments..................   218,038  $197,379
                                                                        =======
             Less amounts representing interest                25,173
                                                              -------

             Present value of net minimum lease payments      192,865         
             Less current portion..........................    90,159
                                                              -------
                                                             $102,706
                                                              =======

                                      (11)
LICO, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

5. INCOME TAXES

    Deferred  income taxes reflect the net tax effects of temporary  differences
between the carrying  amounts of assets and liabilities for financial  reporting
purposes  and the amounts  used for income tax  purposes.  These  items  consist
principally  of  research  and  experimentation  credits,  accrued  liabilities,
accrued bonuses,  accrued retirement  benefits and basis differences in accounts
receivable.  The  components  of the  Company's  net  deferred  tax  assets  and
liabilities at September 30, 1997 are as follows:

                  Total net deferred assets..........  $600,081
                  Less current portion...............   246,915
                                                        -------
                  Net noncurrent deferred assets.....  $353,166               
                                                        =======

    The income tax provision (benefit) for 1997 consists of the following:

            Current:
                 Federal........................      $ 651,870
                 State..........................        282,868
                 Foreign........................        (10,000)
                                                      ---------
            Total current.......................        944,738

            Deferred:
                 Federal........................        635,715
                 State..........................        124,556
                                                      ---------
            Total deferred......................        760,271
                                                      ---------
            Total provision for income taxes....     $1,705,009        
                                                      =========

    A reconciliation  of the income tax provision to the amounts computed at the
federal statutory rate is as follows:

            Provision at statutory rate.................. $1,932,853
            State income taxes, net of federal benefit...    180,000   
            Federal income tax credits...................   (560,000)
            Other, net...................................    152,156
                                                           ---------
            Net tax provision............................ $1,705,009
                                                           =========

    At September 30, 1997, the Company has unused  research and  experimentation
credits of  approximately  $400,000 for income tax purposes which may be used to
offset future taxable  income through the fiscal year ended  September 30, 2007.
The  Company  believes  it is  more  likely  than  not  that  the  research  and
experimentation  credits  will  be  utilized  prior  to  their  expiration  and,
accordingly, has not provided a valuation allowance to reduce the carrying value
of deferred tax assets.

                                      (12)
LICO, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

6. SHAREHOLDERS' EQUITY

    In September  1997,  the Company  amended its Articles of  Incorporation  to
create  two  classes  of common  stock  designated  as Voting  Common  Stock and
Nonvoting Common Stock. In effect, all existing voting common stock shareholders
were issued nine shares of the newly  created  Nonvoting  Common Stock for every
share of Voting Common Stock owned.  Each holder of Voting Common Stock shall be
entitled to one vote for each share of voting stock owned.  Holders of Nonvoting
Common Stock shall have no voting rights. Except for voting rights, both classes
of  common  stock  share  the  same  preferences,  qualifications,  limitations,
restrictions, special rights and general rights.

7. COMMITMENTS AND RELATED-PARTY TRANSACTIONS

   STOCK REDEMPTION AGREEMENT

    The  Company's  stock  is  principally  owned  by  two  individuals   (major
shareholders)  accounting for  approximately  80% of the outstanding  voting and
nonvoting common stock. Upon the death of any minority shareholder,  the Company
will purchase all of the shareholder's shares at the greater of $10 per share or
the  book  value of such  shares.  Similarly,  upon  disability,  retirement  or
termination without cause of any minority shareholder,  the Company may purchase
the shares at book value.  The two  majority  shareholders  have  entered into a
separate cross purchase  agreement to purchase each others stock in the event of
a death of either major shareholder.

   RECEIVABLES

    Included  in accounts  receivable  at  September  30,  1997,  is advances of
$42,335 to certain officers and employees.

8. EMPLOYEE BENEFIT PLANS

    The Company  provides a defined  contribution  401(k) plan for all employees
not covered by  union-sponsored  plans.  Under the plan,  employees may elect to
contribute a percentage of their annual salary subject to Internal  Revenue Code
maximum limitations.  Regular accruals are recorded by the Company in amounts up
to one half of the employees' contributions but not exceeding a maximum of 3% of
the  employees'  base  compensation.  The  Company's  contribution  for 1997 was
$160,193.

    In addition,  the Company has an agreement with certain officers under which
the Company is obligated to pay  specified  amounts  upon  retirement  or lesser
amounts if termination  occurs prior to age 60. The Company has acquired certain
life insurance  policies that will  accumulate cash value to fund this plan. The
Company's liability under this plan is recorded at its present value (assuming a
7.5% interest  rate) and  presented in the balance  sheet as accrued  retirement
benefits.

    The Company also participates in various  multiemployer,  union-administered
pension plans that principally  cover  production  workers.  Union  compensation
arrangements  provide a stipulated amount per hour for fringe benefits including
pension benefits. The Company recognizes as an expense the required contribution
for all such fringe  benefits,  and any  amounts due and unpaid are  included in
current liabilities. The portion of the total fringe benefits related to pension
benefits has not been separately determined.

9. SIGNIFICANT GROUP CONCENTRATION OF CREDIT RISK

    At September 30, 1997,  substantially  all of the Company's  receivables are
obligations of automotive manufacturers.  The Company generally does not require
collateral  or other  security on the  accounts.  The credit risk is  controlled
through credit approvals, limits and monitoring procedures.

                                      (13)
LICO, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

     The accounts receivable,  including  retainage,  at September 30, 1997 from
these major customers are as follows:

      General Motors.................................     $11,476,393
      Ford...........................................       5,494,280
      Lesco Design and Manufacturing Company 
          (contractor to Ford).......................       2,086,529     
                                                           ----------
                                                          $19,057,202
                                                           ==========

    Sales to two customers accounted for 52% and 26%, respectively,  of contract
revenues in 1997.

10. LITIGATION

    During 1997, ASI settled a dispute with a subcontractor  regarding breach of
contract.  The  settlement and related legal fees resulted in a charge to income
from  operations of  approximately  $1,127,600  in excess of amounts  accrued in
prior years.

11. SUBSEQUENT EVENTS

    Effective  February 13, 1998,  the Company signed a letter of intent whereby
it agreed to sell all of its  outstanding  voting and nonvoting  common stock to
Columbus McKinnon  Corporation for approximately $155 million less the amount of
funded debt  existing  at  closing.  This  transaction  is subject to  customary
closing conditions.

                                      (14)
(b)  Pro Forma Financial Statements

    The pro forma consolidated balance sheet as of December 28, 1997 and the pro
forma  consolidated  statements of income for the nine months ended December 28,
1997 and the fiscal year ended March 31, 1997 have been  prepared to reflect (i)
the  consummation  of the  Offering and the  application  of the  estimated  net
proceeds therefrom, (ii) the consummation of the LICO Acquisition, and (iii) the
revisions to the Company's  credit  facilities.  The pro forma balance sheet was
prepared as if such  transactions  had occurred on December  28,  1997.  The pro
forma statements of income were prepared as if such transactions had occurred at
the  beginning of the periods  reflected  thereon.  In  addition,  the pro forma
statement  of income for the year ended  March 31,  1997 was  prepared as if the
acquisitions  of Yale and Lister had occurred at the beginning of that year. The
pro  forma  consolidated  financial  information  is  based  on  the  historical
financial  statements of the Company and LICO and should be read in  conjunction
with those financial  statements and notes thereto.  The  consolidated pro forma
financial information is not necessarily indicative of the financial position or
results of operations  which actually  would have occurred if such  transactions
had been  consummated on the dates  described,  nor does it purport to represent
the Company's future financial position or results of operations.

                                      (15)
COLUMBUS MCKINNON CORPORATION

                PRO FORMA CONSOLIDATED BALANCE SHEET (UNAUDITED)

                                DECEMBER 28, 1997

                                                                                   Refinancing and
                                       Columbus            Acquisition                 Offering     Pro Forma
                                      McKinnon(1) LICO(2)  Adjustments   Pro Forma   Adjustments   As Adjusted
                                      ----------- -------  -----------   ---------   -----------   -----------
                                                                 (Dollars in thousands)

ASSETS:
Current assets:
Cash and cash equivalents.......  $  5,883  $  1,278                $   7,161                   $   7,161
     Trade accounts receivable.......    79,726    46,889                  126,615                     126,615
     Unbilled revenues...............         -    16,189                   16,189                      16,189
     Inventories.....................    95,999     3,541                   99,540                      99,540
     Net assets held for sale........    10,302         -                   10,302                      10,302
     Prepaid expenses................     6,877       707                    7,584                       7,584
                                        -------    ------    -------       -------     -------         -------
Total current assets.................   198,787    68,604                  267,391                     267,391
Net property, plant & equipment......    63,489     9,059                   72,548                      72,548
Goodwill & other intangibles,
   net...............................   241,687         -        450 (3)   356,299       3,848 (7)     352,822
                                                             114,162 (4)                (7,325)(8)
Marketable securities................    16,293         -                   16,293                      16,293
Deferred taxes on income                  9,196       353                    9,549                       9,549
Other assets.........................     5,573     1,463                    7,036                       7,036
                                        -------    ------    -------       -------     -------         -------
Total assets......................... $ 535,025  $ 79,479  $ 114,612     $ 729,116   $  (3,477)      $ 725,639
                                        =======    ======    =======       =======     =======         =======

LIABILITIES AND SHAREHOLDERS' EQUITY:

Current liabilities:
     Notes payable to banks..........     $ 445  $ 15,500  $ (15,500)(5) $     445                   $     445
     Trade accounts payable              21,426    23,979                   45,405                      45,405
     Excess billings.................         -     6,713                    6,713                       6,713
     Accrued liabilities.............    41,956     6,795                   48,751      (2,930) (8)     45,821
     Current portion-long-term debt..    22,504       625       (625)(5)    22,504     (21,000) (9)      1,504
                                        -------    ------    -------       -------     -------         -------
Total current liabilities                86,331    53,612    (16,125)      123,818     (23,930)         99,888
Long-term debt, less current
   portion...........................   246,016     4,183    151,517 (5)   401,716    (195,620)(10)    227,096
                                                                                        21,000  (9)
Senior subordinated debt.............         -         -                        -     199,468 (10)    199,468
Other non-current liabilities........    39,068       904                   39,972                      39,972
                                        -------    ------    -------       -------     -------         -------
Total liabilities....................   371,415    58,699    135,392       565,506         918         566,424

Shareholders' equity:
     Common stock....................       137       256       (256)(6)       137                         137
     Additional paid-in capital......    96,024       120       (120)(6)    96,024                      96,024
     Retained earnings...............    73,743    20,539    (20,539)(6)    73,743      (4,395) (8)     69,348
     ESOP debt guarantee.............    (3,539)        -                   (3,539)                     (3,539)
     Other...........................    (2,755)     (135)       135 (6)    (2,755)                     (2,755)
                                        -------    ------    -------       -------     -------         -------
Total shareholders' equity...........   163,610    20,780    (20,780)      163,610      (4,395)        159,215
                                        -------    ------    -------       -------     -------         -------
Total liabilities and shareholders'
   equity............................ $ 535,025  $ 79,479  $ 114,612     $ 729,116   $  (3,477)      $ 725,639
                                        =======    ======    =======       =======     =======         =======

                                                         (footnotes on following page)

                                      (16)
(1) Represents the Company's consolidated balance sheet as of December 28, 1997.
(2) Represents  LICO's  consolidated  balance sheet as of December 31, 1997.
(3) Represents  deferred financing fees on bank debt required for acquisition of
    LICO by the Company.
(4) Represents goodwill in the amount of the LICO acquisition price in excess of
    the market value of the assets and liabilities acquired.
(5) Represents  debt  required  for the  LICO  Acquisition  by the  Company  and
    refinancing of LICO's debt, based on a purchase price of $155.0 million plus
    acquisition costs and financing fees, and including assumed debt.
(6) Represents  the  elimination  of LICO equity upon LICO's  acquisition by the
    Company in accordance with purchase accounting principles.
(7) Represents deferred financing fees incurred in connection with the Offering,
    net of deferred gain realized on Offering hedge.
(8) Represents   the  write-off  of  existing   deferred   financing  fees  upon
    replacement of the existing credit  facilities with the New Credit Agreement
    and the related reduction in taxes payable.
(9) Represents  the  reclassification  of the current  portion of long-term bank
    debt to non-current debt under the New Credit Agreement.
(10)Represents the refinancing of bank debt with the proceeds from the Offering,
    net of $3.85 million of expenses and realized  hedge gain,  and $0.5 million
    of original issue discount.
(17)
COLUMBUS MCKINNON CORPORATION

             PRO FORMA CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)

                       NINE MONTHS ENDED DECEMBER 28, 1997

                                                                                 Refinancing and    Pro
                                        Columbus             Acquisition             Offering      Forma
                                       McKinnon(1)  LICO(2)  Adjustments Pro Forma  Adjustments  As Adjusted
                                       -----------  -------  ----------- ---------  -----------  -----------
                                                                 (Dollars in thousands)
Net sales............................... $372,442  $117,948               $490,390              $ 490,390
Cost of products sold...................  265,990    98,664                364,654                364,654
                                          -------   -------                -------                -------
Gross profit............................  106,452    19,284                125,736                125,736
Selling, general & administrative
      expenses..........................   51,445     9,830   (2,278)(3)    58,997                 58,997
Amortization of intangibles.............    7,581         -    3,425 (4)    11,006                 11,006
                                          -------   -------    -----       -------                -------
                                           59,026     9,830    1,147        70,003                 70,003
                                          -------   -------    -----       -------                -------
Income from operations..................   47,426     9,454   (1,147)       55,733                 55,733
Interest and debt expense...............   17,729     1,150    7,152 (5)    26,031     (820)(7)    25,211
Interest and other income...............    1,076        56                  1,132                  1,132
                                          -------   -------    -----       -------     ----       -------
Income before income taxes,
   Minority interest and extraordinary
    charge..............................   30,773     8,360   (8,299)       30,834      820        31,654
Income tax expense......................   15,227     2,657   (1,950)(6)    15,934      328 (8)    16,262
                                          -------   -------    -----       -------     ----       -------
Income before minority interest and
Extraordinary charge.................... $ 15,546  $  5,703  $(6,349)     $ 14,900    $ 492      $ 15,392
                                          =======   =======    =====       =======     ====       =======
EBITDA(9)............................... $ 62,746  $ 10,116  $ 2,278      $ 75,140    $   -      $ 75,140
                                          =======   =======    =====       =======     ====       =======
(1) Represents  the Company's  consolidated  results of operations  for the nine
    months ended December 28, 1997.
(2) Represents  LICO's  consolidated  results of operations  for the  nine-month
    period ended December 31, 1997.
(3) Represents the portion of LICO owners'  compensation  expenses which will be
    eliminated upon acquisition by Columbus McKinnon.
(4) Represents  amortization  of goodwill which will result from the acquisition
    of LICO by Columbus McKinnon.
(5) Represents  the  incremental  interest  and  debt  expense  to  finance  the
    acquisition of LICO by Columbus McKinnon.
(6) Represents the tax effect of LICO pro forma adjustments to selling,  general
    and  administrative  expenses and interest and debt expense in items (3) and
    (5) above.
(7) Represents  the net savings in interest and debt expense  resulting from the
    effect of the New Credit Agreement at 6.875% and the Offering at 8.50%.
(8) Represents the tax effect of interest and debt expense pro forma  adjustment
    per (7) above.
(9) EBITDA  represents  income  before  interest  and debt  expense,  income tax
    expense,  depreciation and amortization,  minority  interest,  extraordinary
    charge and  cumulative  effect of  accounting  change.  EBITDA is  presented
    because it provides useful  information  regarding the Company's  ability to
    service and/or incur debt. EBITDA should not be considered in isolation from
    or as a substitute for net income,  cash flows from operating  activities or
    other consolidated income or cash flow statement data prepared in accordance
    with  generally   accepted   accounting   principles  or  as  a  measure  of
    profitability or liquidity.
(18)
COLUMBUS MCKINNON CORPORATION

                          PRO FORMA CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)

                                        YEAR ENDED MARCH 31, 1997

                                         Yale & Lister                                             Refinancing and
                              Columbus   Preacquisition  Combined            Acquisition              Offering      Pro Forma
                             McKinnon(1)  Pro Forma(2)  Pro Forma   LICO(3)  Adjustments  Pro Forma  Adjustments   As Adjusted
                             ----------   -----------   ---------   ------   -----------  ---------  -----------   -----------
                                                              (Dollars in thousands)
Net sales....................$359,424      $110,901     $470,325   $134,168                 $604,493                $604,493
Cost of products sold........ 251,987        78,405      330,392    121,867                  452,259                 452,259
                              -------       -------      -------    -------                  -------                 -------
Gross profit................. 107,437        32,496      139,933     12,301                  152,234                 152,234
Selling, general &
  administrative expenses....  57,186        17,718       74,904      9,819     (1,892)(4)    82,831                  82,831
Amortization of intangibles..   5,197         4,970       10,167          -      4,566 (5)    14,733                  14,733
                              -------       -------      -------    -------     ------       -------                 -------
                               62,383        22,688       85,071      9,819      2,674        97,564                  97,564
                              -------       -------      -------    -------     ------       -------                 -------
Income from operations.......  45,054         9,808       54,862      2,482     (2,674)       54,670                  54,670
Interest and debt expense....  11,930        12,967       24,897        916      9,947 (6)    35,760    (1,261)(8)    34,499
Interest and other income....   1,168             -        1,168         75                    1,243                   1,243
                              -------       -------      -------    -------     ------       -------    ------       -------
Income before income taxes,
  minority interest and ex-
  traordinary charge.........  34,292        (3,159)      31,133      1,641    (12,621)       20,153     1,261        21,414
Income tax expense...........  15,617           903       16,520         65     (3,222)(7)    13,363       504 (9)    13,867
                              -------       -------      -------    -------     ------       -------    ------       -------
Income before minority
  interest and extraordinary
  charge.....................$ 18,675      $ (4,062)    $ 14,613   $  1,576   $ (9,399)     $  6,790   $   757      $  7,547
                              =======       =======     ========    =======     ======       =======    ======       =======
EBITDA(10)...................$ 57,507      $ 16,727     $ 74,234   $  3,209   $  1,892      $ 79,355   $     -      $ 79,335
                              =======       =======     ========    =======     ======       =======    ======       =======
(1) Represents the Company's  consolidated  results of operations for the fiscal
    year ended March 31, 1997, including Yale and Lister since their acquisition
    by the Company on October 17, 1996 and December 19, 1996, respectively.
(2) Represents Yale's and Lister's consolidated results of continuing operations
    from April 1, 1996 through their date of acquisition by Columbus McKinnon on
    October 17, 1996 and December 19, 1996, respectively, along with the effects
    of  acquisition.  Those pro forma effects  include the  following:  (a) $2.5
    million  reduction  of selling,  general  and  administrative  expenses  for
    elimination of Yale corporate offices and other administrative expenses; (b)
    $4.1 million of additional goodwill  amortization  expense; (c) $8.4 million
    incremental  interest and debt expense to finance the acquisitions;  and (d)
    $2.4 million  reduction in income tax expense  resulting  from items (a) and
    (c) above.
(3) Represents  LICO's  consolidated  results of operations for the twelve-month
    period ended March 31, 1997.
(4) Represents the portion of LICO owners'  compensation  expenses which will be
    eliminated upon acquisition by Columbus McKinnon.
(5) Represents  amortization  of goodwill which will result from the acquisition
    of LICO by Columbus McKinnon.
(6) Represents  the  incremental  interest  and  debt  expense  to  finance  the
    acquisition of LICO by Columbus McKinnon.
(7) Represents the tax effect of LICO pro forma adjustments to selling,  general
    and  administrative  expenses and interest and debt expense in items (4) and
    (6) above.
(8) Represents  the net savings in interest and debt expense  resulting from the
    effect of the New Credit Agreement at 6.875% and the Offering at 8.50%.
(9) Represents the tax effect of interest and debt expense pro forma  adjustment
    per (8) above.
(10)EBITDA  represents  income  before  interest  and debt  expense,  income tax
    expense,  depreciation and amortization,  minority  interest,  extraordinary
    charge and  cumulative  effect of  accounting  change.  EBITDA is  presented
    because it provides useful  information  regarding the Company's  ability to
    service and/or incur debt. EBITDA should not be considered in isolation from
    or as a substitute for net income,  cash flows from operating  activities or
    other consolidated income or cash flow statement data prepared in accordance
    with  generally   accepted   accounting   principles  or  as  a  measure  of
    profitability or liquidity.
(19)
(c) Exhibits:

    4.1 Conformed  copy of the  Indenture,  dated as of March  31,  1998,  among
        Columbus  McKinnon  Corporation,  the Guarantors  named on the signature
        pages thereto and State Street Bank and Trust Company, N.A., as Trustee,
        including the form of Senior Subordinated Notes due 2008.

    4.2 A/B Exchange Registration Rights Agreement dated as of March 31, 1998 by
        and among Columbus  McKinnon  Corporation,  the Guarantors  named on the
        signature pages thereto and Bear, Stearns & Co. Inc. and Goldman,  Sachs
        & Co.

    4.3 Supplemental Indenture dated as of  March 31, 1998,  among  LICO,  Inc.,
        Automatic Systems, Inc., LICO Steel Inc., Columbus McKinnon  Corporation
        the other Guarantors  and  State Street Bank and Trust Company, N.A., as
        trustee.

   10.1 Stock  Purchase  Agreement  dated as of March 11,  1998  among  Columbus
        McKinnon  Corporation,  as Buyer, and the shareholders of LICO, Inc., as
        Sellers.

   10.2 Credit  Agreement  dated as of March 31,  1998 among  Columbus  McKinnon
        Corporation,  as Borrower,  the banks,  financial institutions and other
        institutional  lenders named therein as Initial Lenders,  Fleet National
        Bank, as the Initial  Issuing Bank,  Fleet  National  Bank, as the Swing
        Line Bank and Fleet National Bank, as the Administrative Agent.

   23.1 Consent of Ernst & Young LLP as Independent Auditors of LICO, Inc.

   99.1 Text of  Registrant's  press release dated March 11, 1998  (incorporated
        by reference to Exhibit 99 to the  Registrant's  Current  Report on Form
        8-K dated March 11, 1998 and filed on March 23, 1998).

   99.2 Text of Registrant's press release dated March 31, 1998.

                                      (20)
SIGNATURES

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

                                       COLUMBUS McKINNON CORPORATION

Dated:  April 9, 1998                  By:  /s/ Robert L. Montgomery
        -------------                       ------------------------
                                            Executive Vice President and
                                            Chief Financial Officer
                                           

                                      (21)