Net sales of $80.8 million for the third quarter of fiscal 2010 were 5% higher than net sales of $76.6 million for the second quarter of fiscal 2010. Third quarter fiscal 2010 net sales were 42% lower than net sales of $139.1 million for the prior year third quarter.

Our net income for the third quarter of fiscal 2010 was $157,000 ($0.01 per diluted share) compared to a net loss of $12.3 million ($1.14 loss per diluted share) for the second quarter of fiscal 2010 and net income of $10.4 million ($0.94 per diluted share) for the third quarter of fiscal 2009.

Fiscal 2010 third quarter results included $1.5 million of restructuring costs, primarily as a result of shutting down production activities at our attachment facility in The Netherlands. Second quarter restructuring costs totaled $11.6 million.

Using cash flows from operations we were able to pay down outstanding debt by $2.3 million during the quarter ended October 31, 2009 and $40 million during the nine months ended October 31, 2009.

The provision for income taxes in the third quarter of fiscal 2010 is primarily a result of taxes due in countries where we are generating income and taxes on foreign dividends related to the repatriation of cash to the U.S. We are currently unable to realize a tax benefit in several European countries where we have incurred losses.

Net sales increased 5% during the third quarter of fiscal 2010 compared to the second quarter of fiscal 2010 due to higher sales volumes in North America, China and Asia Pacific, which offset lower volumes in Europe.

The consolidated gross profit percentage remained consistent at 24% during the third quarter of fiscal 2010 compared to the previous quarter. Increased margins in North America, China and Asia Pacific were offset by a decreased margin in Europe.

Selling and administrative costs decreased during the third quarter of fiscal 2010 compared to the second quarter of fiscal 2010, primarily due to lower costs in North America.

Operating income, excluding the impact of restructuring costs in Europe, was $1.6 million higher during the third quarter of fiscal 2010 compared to the previous quarter.

Summary financial results are outlined below (in thousands, except earnings per share):

Quarter ended October 31,

Net sales

Gross profit

Gross profit %

SG&A

European restructuring costs

Operating income

Interest expense, net

Foreign currency loss, net

Income before taxes

Provision for income taxes

Effective tax rate

Net income

Diluted earnings per share

Consolidated net sales decreased 42% during the third quarter of fiscal 2010, excluding the impact of foreign currency changes, as a result of the decline in global economic conditions and a weak global lift truck market. Global lift truck shipments were down 44% compared to the prior year. Details of the change in net sales compared to the prior year third quarter follow (in thousands):

Revenue change

Foreign currency changes

Total

The consolidated gross profit percentage decreased largely as a result of unabsorbed fixed and variable costs due to lower sales volumes primarily in Europe.

During the third quarter of fiscal 2010, we incurred restructuring costs of $1.5 million, primarily as a result of shutting down production activities at our facility in The Netherlands.

Selling and administrative expenses decreased 20%, excluding foreign currency changes, due to a reduction in personnel, marketing and other general costs.

Percentage changes in lift truck industry shipments, by region, as compared to the prior year and prior quarter are outlined below. Although lift truck unit shipments are an indicator of the general health of the industry, they do not necessarily correlate directly with the demand for our products.

North America

Europe

Asia Pacific

China

Global

Percentage changes in third quarter fiscal 2010 lift truck industry orders, by region, as compared to the previous quarter, are outlined below:

North America

Europe

Asia Pacific

China

Global

Global lift truck shipments are at their lowest levels since the early 1980’s. The uncertain depth and duration of this recession makes it very difficult to estimate when the global lift truck market will begin to recover. However we are planning that global demand for lift trucks will continue to be at low levels through the remainder of fiscal 2010 and into fiscal 2011.

Summary financial results are outlined below (in thousands):

Quarter ended October 31,

Net sales

Transfers between areas

Net sales and transfers

Gross profit

Gross profit %

SG&A

Loss on disposition of assets, net

Amortization

Operating income

Net sales decreased 42%, excluding the impact of currency changes, primarily due to lower sales volumes as a result of the general economic downturn and a weak lift truck market. Details of the change in net sales over the prior year quarter follow (in thousands):

Revenue change

Foreign currency changes

Total

The gross profit percentage remained consistent at 31% due to a favorable product and customer mix which offset significantly lower sales volumes. Some of our facilities in North America operated at reduced work schedules during the third quarter of fiscal 2010.

The decrease in selling and administrative costs was due to a reduction in personnel, advertising and other general costs.

Summary financial results are outlined below (in thousands):

Quarter ended October 31,

Net sales

Transfers between areas

Net sales and transfers

Gross profit (loss)

Gross profit (loss) %

SG&A

Loss (gain) on disposition of assets, net

Amortization

Restructuring costs

Operating income (loss)

Net sales decreased 56%, excluding the impact of currency changes, due to lower sales volumes as a result of general economic conditions and a weak lift truck market. Even though sales have significantly decreased, we believe we have maintained market share. Details of the change in net sales over the prior year quarter follow (in thousands):

Revenue change

Foreign currency changes

Total

Our gross profit percentage decreased due to significantly lower sales volumes, which resulted in unabsorbed fixed and variable costs, higher product costs from transportation and import duties on goods shipped from North America and inventory write-offs due to restructuring. Most facilities in Europe operated under reduced work schedules during the third quarter of fiscal 2010. In addition, we recorded inventory write-downs of approximately $800,000 to reflect losses we expect to incur on certain customer orders which will be shipped in the future.

Excluding the impact of currency changes, selling and administrative expenses decreased 25% in Europe due to lower personnel costs as result of headcount reductions made during our European restructuring activities and lower marketing, selling and travel costs.

Restructuring costs incurred during the third quarter of fiscal 2010 were primarily a result of shutting down production activities at our facility in The Netherlands. These costs included severance expense of $531,000, costs for movement of equipment and facility shutdowns of $968,000 and other costs of $15,000. We estimate future restructuring costs for The Netherlands will be minimal.

In October 2009 we initiated discussions with the local works council at our facility in Hagen, Germany regarding our intention to cease production operations there. Our current plans are to continue to maintain sales and certain administrative functions in Germany and shift production to other Cascade facilities. Using these facilities, we will be able to continue providing a full-range of products to our European customers. We estimate the costs for the Hagen restructuring to be approximately $10 million and will be incurred in the fourth quarter of fiscal 2010.

Summary financial results are outlined below (in thousands):

Quarter ended October 31,

Net sales

Transfers between areas

Net sales and transfers

Gross profit

Gross profit %

SG&A

Loss on disposition of assets, net

Operating income

Net sales decreased 35%, excluding the impact of currency changes, due to lower sales volumes as a result of the general economic downturn and a weak lift truck market. Details of the change in net sales over the prior year quarter follow (in thousands):

Revenue change

Foreign currency changes

Total

The gross profit percentage in Asia Pacific was higher than the prior year due to changes in product mix and fluctuations in foreign currency rates.

Selling and administrative costs decreased 15% in the current year, excluding the impact of currency changes, due to lower personnel, sales and other general costs.

Summary financial results are outlined below (in thousands):

Quarter ended October 31,

Net sales

Transfers between areas

Net sales and transfers

Gross profit

Gross profit %

SG&A

Loss on disposition of assets, net

Operating income

Net sales increased 2%, excluding currency changes, primarily due to a slight increase in sales volumes as a result of the partial recovery of the Chinese economy and lift truck market. Details of the change in net sales over the prior year quarter follow (in thousands):

Revenue change

Foreign currency changes

Total

Gross margin percentages in China increased due to changes in product mix, price increases implemented in the prior year and lower intercompany transfers, which carry lower gross margins.

Selling and administrative costs decreased 8%, excluding currency changes, due to lower personnel and other general costs.

On December 1, 2009, our Board of Directors declared a quarterly dividend of $0.01 per share, payable on January 28, 2010 to shareholders of record as of January 5, 2010.

Free cash flow, a non-GAAP measure, is defined as cash flow from operating activities less capital expenditures. The following table presents a summary of our free cash flow for the three and nine months ended October 31, 2009 and 2008.

Cash flow from operating activities

Capital expenditures

Free cash flow

Net sales

Cost of goods sold

Gross profit

Selling and administrative expenses

Loss on disposition of assets, net

Amortization

European restructuring costs

Operating income (loss)

Interest expense

Interest income

Foreign currency loss, net

Income (loss) before provision for income taxes

Provision for income taxes

Net income (loss)

Basic earnings (loss) per share

Diluted earnings (loss) per share

Basic weighted average shares outstanding

Diluted weighted average shares outstanding

Current assets:

Cash and cash equivalents

Accounts receivable, less allowance for doubtful accounts of $1,390 and $1,441

Inventories

Deferred income taxes

Prepaid expenses and other

Total current assets

Property, plant and equipment, net

Goodwill

Deferred income taxes

Intangible assets, net

Other assets

Total assets

Current liabilities:

Notes payable to banks

Current portion of long-term debt

Accounts payable

Accrued payroll and payroll taxes

Accrued restructuring costs

Other accrued expenses

Total current liabilities

Long-term debt, net of current portion

Accrued environmental expenses

Deferred income taxes

Employee benefit obligations

Other liabilities

Total liabilities

Shareholders’ equity:

Common stock, $.50 par value, 40,000 authorized shares; 10,885 and 10,852 shares issued and outstanding

Additional paid-in capital

Retained earnings

Accumulated other comprehensive income

Total shareholders’ equity

Total liabilities and shareholders’ equity

Cash flows from operating activities:

Net income (loss)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Fixed asset write off due to restructuring

Depreciation

Amortization

Share-based compensation

Deferred income taxes

Loss on disposition of assets, net

Changes in operating assets and liabilities:

Accounts receivable

Inventories

Prepaid expenses and other

Accounts payable and accrued expenses

Income taxes payable and receivable

Other assets and liabilities

Net cash provided by operating activities

Cash flows from investing activities:

Capital expenditures

Proceeds from disposition of assets

Net cash used in investing activities

Cash flows from financing activities:

Cash dividends paid

Payments on long-term debt

Proceeds from long-term debt

Notes payable to banks, net

Common stock issued under share-based compensation plans

Common stock repurchased

Tax effect from share-based compensation awards

Net cash provided by (used in) financing activities

Effect of exchange rate changes

Change in cash and cash equivalents

Cash and cash equivalents at beginning of period

Cash and cash equivalents at end of period