Cascade (NYSE:CAE), which makes handling attachments for forklifts, managed to hoist its first-quarter earnings as well.

Compared with the first quarter in 2004, sales were up 22% to $114.5 million and diluted earnings per share increased 46% to $0.95. According to Yahoo! Finance, analysts were expecting $102 million in sales and $0.58 in diluted EPS. The fantastic execution lifted the stock price by more than 20% this morning.

Despite rising prices for steel and other input materials, gross margins fell only 80 basis points. Rising commodity prices have hurt other companies, so Cascade must have some pricing power.

Cascade transforms a forklift into a workable tool by designing special attachments. It creates newsprint-handling attachments to help publishers like New York Times (NYSE:NYT) load the paper on the presses. It also creates appliance-handling devices to help Home Depot (NYSE:HD) or Lowe's (NYSE:LOW) move refrigerators and such in and out of warehouses. When you add value, you have pricing power.

But the real reason that so much dropped to the bottom line is that selling, general, and administrative costs were essentially flat as a percentage of sales. To me, that means the sales and support forces were very productive in getting sold goods processed and delivered to their customers.

From a regional perspective, North America and Europe were strong while Asia was weak. Sales grew 21% in North America and 28% in Europe, excluding foreign currency translations. Asia was relatively flat but still contributed $3 million in operating income. Management expects the momentum to continue for a bit longer. Based on industry order backlog and a forecast for continued growth in forklift sales, management expects growth to be strong for the next quarter as well.

Cascade is a solid company that has turned itself around since 2002. Sales have been growing by 15% per year. The company generates free cash flow and has cut its debt load by almost 75%. And with the forward price-to-earnings ratio at 17, investors would be Foolish to keep this one in mind when there is a pullback in the price, because annual earnings growth for the next few years is expected to average around 10%.

Fool contributor David Meier does not own shares in any of the companies mentioned. The Motley Fool has a disclosure policy.