Dear Shareholders: As a leading designer and manufacturer of material handling products, Columbus McKinnon is a company with the number one market share in our major product lines and is well known for the quality of our products and our service after the sale. In North America, we are the largest producer of hoists and chain and the second largest producer of forged attachments, products critical to manufacturing processes that have broad applications in most industrial and commercial markets. Over the last three years, our operating performance and financial position have been negatively affected by a prolonged downturn in the industrial economy and reduced spending in the industrial distribution channel on both MROP (maintenance, repair, operating, and production) supplies and on capital goods. In fiscal 2003, we achieved a degree of stabilization in our top line and continued to make progress in reducing debt. Net sales from continuing operations were $453.3 million, a 5.6 percent decrease from $480.0 million  in fiscal 2002 when net sales declined from fiscal 2001 by 18.1 percent. Debt was reduced by $33.8 million to $314.1 million at March 31, 2003, a decrease of 9.7 percent. Columbus McKinnon’s net loss for fiscal 2003 was reduced to $14.0 million, or $0.97 per diluted share, from a net loss of $135.4 million, or $9.39 per diluted share, for fiscal 2002, which included the $121.5 million ($8.43 per diluted share) after-tax loss on the sale of discontinued operations. Fiscal 2003 results included $15.7 million ($0.98 per diluted share) in pre-tax charges for restructuring and goodwill writedowns. Against the backdrop of this difficult environment for our business, we are working diligently to position Columbus McKinnon for improved financial performance and strength. Our repositioning strategy is based on a renewed focus on our core material handling Products business, Columbus McKinnon’s traditional strength and a business that generates significant cash flow at higher margins than our Solutions business.  While there remains significant work to return Columbus McKinnon’s profitability to the level we achieved prior to fiscal 2002, we made significant progress during fiscal 2003 to advance our major strategic objectives and better position the company financially going forward. A discussion of our progress in fiscal 2003 follows.  Objective #1 Further reduce CM’s cost structure Taking more costs out of our business remains a priority both in the current market environment and for the longer term because it enhances the profitability of CM’s business at higher volumes. We continue to drive reductions in our cost structure through facility rationalizations and Lean Manufacturing, as well as our centralized Purchasing Council and the use of lower-cost manufacturing facilities for certain products. During the second half of fiscal 2003, we rationalized our chain and crane-building manufacturing operations and to date have rationalized 13 facilities companywide, significantly reducing excess capacity and overhead costs. We increased utilization of our manufacturing facilities in Mexico and China where we are building lower cost hoist and chain products designed to CM’s exacting specifications and targeted to global markets. Since we introduced Lean Manufacturing in 2001, it has been implemented at 14 of our North American manufacturing facilities. Lean Manufacturing has enabled us to reduce inventories by approximately $30 million in fiscal 2003 and 2002 at these facilities while making us more responsive to customer needs and increasing the flexibility of our manufacturing operations and utilization of space and labor. The value of our strategic initiatives to lower costs is reflected in gross margins in our core Products segment remaining above 25% in the last two years, despite significantly lower volumes.  Objective #2 Increase our financial flexibility  Increasing our financial flexibility was a critical objective in fiscal 2003. Our credit agreement was scheduled to expire in March 2003, so negotiating a new long-term credit facility was important to securing continued funding for our business and the time needed to pay down debt to a more manageable level. In November, we closed on our new credit facility, which expires in March 2007. During the second half of fiscal 2003, we stepped up our efforts to generate cash to pay down debt and reduced long-term debt to its lowest level since March 1998. Over the last two years, we reduced debt by almost $95 million with $65 million of this reduction funded by operations. To further improve our financial flexibility and accelerate debt reduction, we are considering divestiture of several smaller, less synergistic businesses. To make significant further reductions in debt in fiscal 2004, we see operations, additional inventory reductions, potential divestitures and the sale of surplus property providing several diverse sources to generate cash while still preserving the underlying earnings power of our core Products business. 2