EXHIBIT 13

MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL
CONDITION
(dollars in millions except per share data)
(references to Notes are references to Notes to Consolidated Financial
Statements)


Results of Operations
Net sales were $831.1, $752.6 and $681.3, respectively, in 1995, 1994 and 1993.
Net sales in the Engineered Materials segment were up $32.0 in 1995, as
shipments of metal powders by the Special Materials business reached record
levels for a second successive year, as a result of the continuing penetration
by powder metallurgy into automotive and nonautomotive applications and strong
North American auto and light truck production.  Sales of the Aerospace
Components business increased as several newer engine programs reached the
production stage.  Handling/Packaging Systems' sales were up $46.5 in 1995, as
North American and Asia Pacific Handling sales reached record levels, and most
of the Packaging businesses reported higher sales.  The weakening of the U.S.
dollar against most foreign currencies added $15.6 to net sales compared with
1994, as discussed in "Foreign Operations."  In 1994, in the Engineered
Materials segment, strong North American auto and light truck production led to
a $22.4 increase in sales of metal powders.  Handling/Packaging Systems' sales
were up $47.4 in 1994, primarily as a result of a strong market for material
handling equipment in the U.S. and Asia Pacific markets, coupled with higher
sales of strapping products in the U.S. and Canada.

Operating income was $71.6, $24.2 and $38.2, respectively, in 1995, 1994 and
1993.  In 1994, a charge of $34.2 was taken to write down goodwill, as
discussed in "Long-Lived Assets" and in Note 2.  Excluding the effect of this
charge, operating income in 1995 was $13.2 higher than in 1994, reflecting
increased volumes at nearly all business units and improved selling prices in
the North American Handling business.  In 1994, operating income was $14.0
lower than in 1993, reflecting the $34.2 charge to write down goodwill. Strong
metal powder volume at Special Materials, higher Handling volumes in the U.S.
and Asia Pacific, and improved sales of packaging products, primarily in the
U.S. and Canada, had a favorable effect on 1994 operating results.  A
restructuring charge of $5.6 reduced operating income in 1993, as discussed in
"Restructuring Charges" and Note 3.  Excluding the goodwill charge in 1994 and
the restructuring charge in 1993, operating income was $71.6, $58.4 and $43.8
in 1995, 1994 and 1993, respectively.

From 1993 to 1995, Special Materials' shipments of metal powders grew by 24%,
due to increased usage of metal powders in automotive and nonautomotive
applications and growth in North American auto and light truck production.  At
Aerospace Components, military fabrication sales in 1995 increased over 1994,
and were at essentially the same level as in 1993, while commercial and space
fabrication sales grew by $15.0 from 1993 to 1995.  Repair sales were down $3.5
in 1995 compared with 1993, reflecting weaker demand from the airline industry.
In Handling/Packaging Systems, 1995 sales volume exceeded that of 1994 and 1993
in North American and Asia Pacific markets, but European demand for capital
goods remained soft.

Cost of sales as a percentage of sales was 76%, 77% and 76%, respectively, in
1995, 1994 and 1993.  As a percentage of sales, selling and administrative
expenses were 15% in 1995, 16% in 1994 and 17% in 1993. 

The following business segment commentary reflects the 1994 goodwill write-down
and the 1993 restructuring charge for each segment.  However, the discussion of
individual business unit results is presented before these charges and
allocation of general corporate expenses.  See Note 6 for further information
on business segments.

Net Sales and Operating Profit by Business Segment
(in millions)

                                  Net Sales            Operating Profit 
                            1995    1994    1993     1995    1994    1993 
Engineered Materials
  Special Materials        $175.7  $153.9  $131.5        
  Aerospace Components       72.7    62.5    61.0     
                             248.4   216.4  192.5   $ 39.4 $ 32.3  $ 26.3
  Goodwill Write-Down                                   --  (13.2)     --
  Restructuring Charge                                  --     --    (1.8)
                             248.4   216.4  192.5     39.4   19.1    24.5

Handling/Packaging Systems
  Handling                   441.5   406.0  366.7        
  Packaging                  141.2   130.2  122.1        
                             582.7   536.2  488.8     34.2   28.1    19.1
  Goodwill Write-Down                                   --  (21.0)     --
  Restructuring Charge                                  --     --    (3.8)
                             582.7   536.2  488.8     34.2    7.1    15.3

Corporate Items                                       (2.0)  (2.0)   (1.6)

Total Net Sales             $831.1  $752.6 $681.3        

Total Operating Profit                              $ 71.6 $ 24.2  $ 38.2

Engineered Materials
Engineered Materials includes Special Materials (metal powders for
manufacturing precision parts) and Aerospace Components (precision machined
structures, complex fabrications and jet engine component repairs).

Sales increased 15% in 1995 in the Engineered Materials segment, reflecting a
second successive year of record shipments of metal powders.  Special
Materials' shipments were up 8% from 1994, driven by increased penetration by
powder metallurgy in automotive and nonautomotive applications and strong North
American auto and light truck production.  Aerospace Components' sales were up
16%, with increased fabrication shipments on several newer commercial and
military programs and higher sales on several repair programs.

Aerospace Components' defense-related business represented approximately 32%,
33% and 39% of its sales in 1995, 1994 and 1993, respectively.  Defense-related
sales as a percentage of the Company's consolidated sales were approximately 3%
in each of the last three years.  In the face of the slowdown in military
procurement throughout the 1990s to date, the fabrication business of Aerospace
Components has executed a strategy of increasing its penetration of the
commercial and space sectors, while continuing to secure new military business.
The business has developed expertise in fabrication of the very large
components used on new high-thrust commercial jet engines and on space
applications.  Sales to the commercial and space sectors have more than doubled
from 1990 to 1995.  Repair sales increased 7% in 1995 after a 22% drop in 1994,
reflecting higher prices and additional quantities of jet engine blades
repaired.

Operating profit for the Engineered Materials segment increased 22% in 1995
over 1994, excluding the impact of a special charge in 1994.  Including the
effect of the 1994 goodwill write-down, as discussed in "Long-Lived Assets" and
in Note 2, operating profit increased by $20.3 in 1995.  Special Materials'
operating profit was up 16%, reflecting the record volume.  Higher selling
prices were largely offset by a 4% increase in scrap steel costs and higher
costs of other materials such as molybdenum and nickel, along with several one-
time operating expenses.  At Aerospace Components, operating profit was up 10%
in 1995, despite a one-time gain in 1994 from settlement of a real estate
matter (see "Nonoperating Items").  Higher volume and improved manufacturing
efficiency on several newer fabrication programs, along with selected price
increases and improved operating procedures in the repair business, all
contributed to the earnings improvement.

In 1994, sales in the Engineered Materials segment increased 12% over 1993. 
Metal powder shipments were up 17% in 1994, to then-record levels, on higher
North American automobile and truck production and increased penetration of
powdered metals into automotive and nonautomotive applications.  Aerospace
Components' sales were up slightly, as higher commercial fabrication shipments
were substantially offset by lower repair and defense business.  Operating
profit for the segment fell 22% in 1994 as a result of the goodwill write-down,
as discussed in "Long-Lived Assets" and in Note 2.  Excluding the effect of the
goodwill charge and the $1.8 restructuring charge in 1993, operating profit in
1994 increased 23% over 1993.  Special Materials' operating profit was up 20%,
primarily reflecting the then-record volume.  Scrap steel costs increased 18%
above 1993, about half of which was recovered with higher selling prices. 
Operating profit was up 27% in 1994 at Aerospace Components, due to a one-time
gain from settlement of a real estate matter (see "Nonoperating Items") and
slightly improved margins in the aviation repair business.

The Engineered Materials segment's order backlog at year-end 1995 was $142.7,
down from $148.4 at the end of 1994.  Special Materials' backlog, which is
generally short-term in nature, remained at a high level, up 7% from 1994,
although order rates and backlog during the last half of 1995 were down from
the levels experienced during the first half of the year.  Aerospace
Components' backlog was 8% lower at year-end 1995 than 1994, reflecting
deliveries against multi-year fabrication orders received during the latter
part of 1994 for commercial, military and space applications.

Handling/Packaging Systems
Total segment sales in 1995 were up 9% from 1994.  In 1995, Handling sales
increased 9% from the prior year, with both North American and Asia Pacific
businesses achieving record sales for a second successive year.  Demand for
material handling products in the U.S. continued to be strong, resulting in
record volumes, higher pricing and a 6% increase in sales in 1995.  Strong
Australian and Pacific Rim demand led to a 14% increase in 1995 sales in Asia
Pacific.  A 10% increase in European Handling sales reflected favorable
exchange rates and increased sales of conveyors and interiors products. 
Packaging sales were up 8%, with higher sales in all businesses except the U.S.
stitching operation.  With a full year of production on the new polyester
strapping line, U.S. sales of plastic strap increased.  Higher prices accounted
for most of the increase in U.K. plastic strap sales, while increased volume
was the primary factor leading to sales growth in the U.K. steel strap
business.  Strong sales of machines to lumber, textile, fiber and other
industries offset the impact of lower equipment sales to the newspaper
industry.  Lower Canadian steel strap sales reflected weakness in the lumber
industry and the Canadian economy in general.

Segment operating profit increased $27.1 in 1995, to $34.2, after accounting
for the 1994 write-down of $21.0 for goodwill related to the Packaging unit, as
discussed in "Long-Lived Assets" and in Note 2.  Excluding the effects of the
goodwill write-down, operating profit was up 22% from 1994.  North American
Handling profits were up 37%, reflecting the record volume and stronger
pricing, partially offset by a 5% increase in steel costs.  The record volume
at Handling Asia Pacific contributed to a 28% increase in operating profit in
that business.  Operating profit for the European Handling business was down
17%, as higher selling prices did not cover increased steel costs, and a one-
time cost of $2.6 was incurred to rationalize the sales and distribution
operations to reduce fixed costs in the U.K. and Germany.  Packaging operating
profit was up 4%, as high raw material costs, particularly for plastic resins,
absorbed much of the benefit of increased selling prices.

Total Handling/Packaging Systems' sales in 1994 were 10% higher than in 1993. 
Handling sales increased 11% from the prior year.  Strong demand for material
handling products in the U.S. led to then-record volumes and higher pricing,
and generated a 14% increase in sales.  Strong Australian and Pacific Rim
demand, together with sales from the Hong Kong distributor acquired in April
1994, led to a 52% increase in Asia Pacific sales.  European Handling sales
were up slightly as improvements in the U.K. were offset by the effects of a
slow economy in Continental Europe.  Packaging sales were up 7% with higher
sales in all locations, especially in Canada.

In 1994, Handling/Packaging Systems' operating profit fell 54% to $7.1, due to
the $21.0 goodwill write-down related to the Packaging unit, as discussed in
"Long-Lived Assets" and in Note 2.  Excluding the effects of the goodwill
write-down and the $3.8 restructuring charge in 1993, operating profit was up
47% in 1994.  North American Handling profits were up 43%, reflecting then-
record volumes and better pricing, partially offset by an 11% increase in steel
costs.  The improved volume at Handling Asia Pacific was a significant
contributor to the increase in segment income.  Operating profit for the
European Handling business was up 18%, as higher volume in the U.K. and cost
savings throughout Europe were only partially offset by lower volume and
pricing in Continental Europe and higher steel costs in the U.K.  Despite a
decline in operating profit in the newspaper-related business, Packaging
operating profit was up 25%, due primarily to higher strapping volume and
selling prices and LIFO inventory liquidation benefits in Canada and the U.K.

Handling/Packaging Systems ended 1995 with an order backlog of $88.4, down from
$94.5 at the end of 1994 (at the same exchange rates), due mainly to lower
order rates at the North American Handling operation.  Order intake at Handling
Asia Pacific reached a record level in 1995.

Restructuring Charges
In 1993, the Company provided $5.6 for restructuring costs related to: the exit
from certain lines of business that were part of Handling North America; the
reorganization and downsizing of portions of the European Handling operation;
and, in the Aerospace Components business, the abandonment of certain product
lines that resulted in idled equipment and the provision for severance costs
related to a downsizing of the aviation repair workforce.  The $5.6 consisted
of $1.7 in severance costs, $1.5 of idled equipment written down to fair market
value, $1.4 of inventory related to the exited businesses and $1.0 of other
costs.  Quantification of the effects of the restructuring on subsequent
operating results is not practical because some of the actions were taken to
avoid future costs while other actions were strategic in nature and implemented
to limit exposure to changing market dynamics.  These restructuring activities
are complete.

Long-Lived Assets
In 1994, the Company concluded that, in the light of its highly leveraged
capital structure, a preferable accounting policy for analyzing the valuation
of long-lived assets would be to reflect its cost of capital in computing the
present value of the expected cash flows of its businesses.  Applying this
policy to all of its long-lived assets, the Company determined that with
respect to its Aerospace Components and newspaper-related Packaging businesses,
in the light of the significant deterioration in business climates in the
aerospace and newspaper industries over the preceding years, the values of the
discounted cash flows were insufficient to recover the carrying value of the
long-lived assets.  Therefore, the goodwill component of those assets was
deemed to be impaired.  As a result, a charge of $34.2 was taken for the write-
down of goodwill established in connection with the acquisitions of the
Aerospace Components and newspaper-related Packaging businesses.  As of
December 31, 1995, the remaining net investment in these businesses was
approximately equal to the value of the discounted projected cash flows
attributable to them, and consisted primarily of tangible assets.  The Company
intends to periodically assess the carrying values of its long-lived assets. 
(See Note 2.)

Interest Expense
The Company has a highly leveraged capital structure with substantial net
interest expense of $52.5, $50.2 and $49.1 in 1995, 1994 and 1993,
respectively.  The increase in 1995 reflected the effect of replacement of a
portion of the Company's bank debt with senior notes bearing higher interest
rates, as well as higher rates on the remaining bank debt.  In 1994, the
increase in net interest expense was caused primarily by higher rates on bank
debt. The Company has interest rate agreements that effectively provided fixed
rates of interest on 79% of its bank obligations at the end of 1995, all of
which bore interest at floating rates.  (See Note 13.)

Nonoperating Items
The Company has certain income and expenses that are not related to its ongoing
operations.  In 1994, these items included a $1.1 one-time gain for settlement
of a real estate matter with a local transportation authority at Aerospace
Components.  In 1993, a charge of $4.8 was recorded for anticipated costs for
environmental matters, as discussed below and in Notes 15 and 16.  Ongoing
postretirement expenses attributable to disposed or discontinued operations are
also shown as nonoperating items.

The Company has been identified as a potentially responsible party in
connection with the investigation and remediation of a site in Duluth,
Minnesota.  Based on the Company's current estimates of its potential
liabilities related to the site, the Company believes that this matter is
unlikely to have a material adverse effect on the Company's liquidity or
consolidated financial condition.  However, the Company's current estimate of
its potential environmental liabilities is subject to considerable uncertainty
related to the possible remediation of certain underwater sediments at the
site.  (See Note 15.)

The Company is a defendant in an action in federal district court in Toledo,
Ohio, in which it has been judged liable for response costs incurred or to be
incurred in the future by the City of Toledo in connection with the alleged
contamination of a 1.7 acre parcel of land owned by the City that formerly was
the site of a coke plant and related by-products facilities.  However, the
Court has ruled that the Company is entitled to indemnification by one of the
other defendants in the matter, Beazer East, Inc., under the terms of a 1978
sale agreement.  The Company expects Beazer East to appeal the indemnification
ruling.  (See Note 16.)

The Company's Hoeganaes Corporation subsidiary is one of approximately 100
defendants in an action in federal district court in Trenton, New Jersey,
brought by SC Holdings, Inc., a subsidiary of Waste Management International
Plc.  The plaintiff seeks to recover amounts expended or to be expended in
investigation and remediation of the Cinnaminson Groundwater Contamination Site
in Burlington County, New Jersey, which encompasses a landfill formerly
operated by the plaintiff and may also include the groundwater under a
Hoeganaes facility.  SC Holdings alleges that Hoeganaes has liability both as
an owner/operator and as a generator.  The matter is in its preliminary stages,
but the Company believes that Hoeganaes has meritorious defenses against both
alleged bases of liability.  (See Note 16.)

In May 1994, the Company instituted an action seeking a declaratory judgment
against and recoveries from insurers in connection with environmental claims
under policies covering nearly 30 years.  The parties are in discovery and
trial is tentatively set for March 1997.

Provision for Income Taxes
In 1995, 1994 and 1993, high levels of interest expense and differences in
income and expense recognition resulted in losses for U.S. federal income tax
purposes. Since most of the interest expense is borne in the United States at
the parent company level, throughout each period the Company had taxable income
in foreign and state jurisdictions despite the high levels of consolidated
interest expense.  For each period presented, the Company also provided for
additional amounts related to open federal tax return years 1982 through 1990. 
In 1994, the write-down of goodwill did not result in a deduction allowable for
tax purposes.

The Company's U.S. federal income tax returns for the years 1988 through 1990
are in the process of examination.  Resolution of tax years 1982-1984 is
pending at the U.S. Tax Court following receipt of a statutory notice of
deficiency for $17.0 plus interest and penalties.  Resolution of tax years
1985-1987 is pending at the Appeals Division of the Internal Revenue Service. 
The Company believes that adequate provision has been made for possible
assessments of additional taxes.

Extraordinary Loss
During the second quarter of 1995, the Company issued $100.0 of 12% Senior
Notes due 2001 and completed a substantial amendment to the Company's senior
bank credit agreement.  The proceeds were used to retire a portion of the
Company's bank debt.  Debt issuance costs of $3.4 associated with the retired
debt were written off, without any currently usable tax benefit in 1995, and
shown as an extraordinary item.  (See Notes 5 and 13.)

Cumulative Effect of Accounting Change
In 1994, the Company adopted the Financial Accounting Standards Board's
Statement of Financial Accounting Standards ("FAS") No. 106 "Employers'
Accounting for Postretirement Benefits Other Than Pensions" for its foreign
locations.  The one-time cumulative effect of this adoption on income was a net
charge of $.2.  (See Note 4.)

Liquidity and Capital Resources
Interlake's total debt at year-end 1995 was $443.6, up $1.2 from year-end 1994.
Cash totaled $41.6 at the end of the year, up $1.9 from year-end 1994.  During
1996, the Company will have debt amortization requirements of $3.8.  Based on
current levels of performance, which, if maintained throughout the year will
provide the Company with leeway under its bank credit agreement covenants, and
based on the availability of additional revolver borrowings under the Company's
bank credit agreement, the Company believes that it will have adequate
liquidity to meet its debt service and operating requirements in 1996.  Under
the bank credit agreement, the Company is able to borrow under its revolving
facility up to an additional $40.8 over the year-end 1995 revolving
indebtedness.  In addition, the Company will have up to $5.8 of delayed draw
term loan availability for amounts that may be incurred in connection with
certain environmental matters.  (See Note 13.)

In 1999, the Company has debt amortization requirements of $98.3, which it does
not expect to be able to meet from operating cash flow.  The Company continues
to evaluate alternative actions to repay or refinance some or all of its long-
term debt obligations.

Cash Flow (see Consolidated Statement of Cash Flows)
Cash inflows provided by operating activities were $23.9, $23.2 and $8.0 in
1995, 1994 and 1993, respectively.  Cash provided by operating activities was
up in 1995 and 1994 from 1993 primarily as a result of higher operating
earnings.  The $34.2 goodwill charge in 1994 did not affect cash flow.  Working
capital needs were $3.6 in 1995 compared with $6.5 in 1994.  In 1993, a decline
in sales led to a $5.8 cash inflow from working capital.  In 1994, other
operating adjustments reflected the movement of certain expected tax
liabilities from current to long-term. 

Cash outflows used by investing activities were $20.2, $14.6 and $13.1,
respectively, in 1995, 1994 and 1993.  Capital expenditures for expansion
projects totaled $2.9, $4.1 and $6.1, respectively, in 1995, 1994 and 1993.
Expansion spending in 1995 included milling and machining equipment to
accommodate fabrication of new engine programs at the Aerospace Components
operation.  Expansion spending in 1994 and 1993 included the addition of two
annealing furnaces to expand capacity at the Special Materials operation and,
in 1993, a new production line for polyester strapping at Packaging. 
Management believes that capital expenditures have been adequate to properly
maintain the Company's businesses and provide for anticipated growth
opportunities. At the end of 1995, the unexpended balance on approved capital
expenditure projects was $10.8. The Company anticipates that 1996 capital
spending will be approximately $27.0.

Cash outflows for financing activities were $1.2, $.6 and $1.3 in 1995, 1994
and 1993, respectively.

Foreign Operations
The Company does business in a number of foreign countries, mainly through its
Handling/Packaging Systems segment. The results of these operations are
initially measured in local currencies, principally in British pounds, German
marks, Canadian dollars and Australian dollars, and then translated into U.S.
dollars at applicable exchange rates. The reported results of these operations
are sensitive to changes in applicable foreign exchange rates that could have a
material effect on the Company's results of operations.  In both 1995 and 1994,
the dollar became weaker against most currencies, which had a favorable impact
on sales of $15.6 and $5.2, respectively, but an insignificant impact on
operating income. (For additional information about the Company's operations by
geographic area, see Note 6.)

Effects of Inflation
The impact of inflation on the Company in recent years has not been material,
and it is not expected to have a significant effect in the foreseeable future.



REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Shareholders of The Interlake Corporation:

In our opinion, the accompanying consolidated balance sheets and the related
consolidated statements of operations, of cash flows and of shareholders'
equity (deficit) present fairly, in all material respects, the financial
position of The Interlake Corporation and its subsidiaries at December 31, 1995
and December 25, 1994, and the results of their operations and their cash flows
for each of the three years in the period ended December 31, 1995, in
conformity with generally accepted accounting principles. These financial
statements are the responsibility of The Interlake Corporation's management;
our responsibility is to express an opinion on these financial statements based
on our audits. We conducted our audits of these statements in accordance with
generally accepted auditing standards which 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, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for the
opinion expressed above.

As discussed in Note 2 to the consolidated financial statements, the Company
changed its method of evaluating the recoverability of goodwill and other long-
lived assets in 1994.

/s/ Price Waterhouse LLP

Chicago, Illinois
January 24, 1996


The Interlake Corporation
Consolidated Statement of Operations
For the Years Ended December 31, 1995,
 December 25, 1994 and December 26, 1993
(in thousands except per share data)
<TABLE>
<CAPTION>
                                                                       1995         1994          1993   
                                                                    (53 weeks)   (52 weeks)    (52 weeks)
<S>                                                                  <C>          <C>          <C>
Net Sales                                                            $831,103     $752,592     $ 681,330
Cost of Products Sold                                                 634,386      576,929       520,508
Selling and Administrative Expense                                    125,139      117,264       117,025
Goodwill Write-down (See Note 2)                                           --       34,174            --
Restructuring Charge (See Note 3)                                          --           --         5,611

Operating Profit                                                       71,578       24,225        38,186

Interest Expense                                                       54,320       51,609        50,906
Interest Income                                                        (1,780)      (1,369)       (1,855)
Nonoperating (Income) Expense (See Note 15)                            (1,064)        (481)        5,359

Income (Loss) Before Taxes, Minority Interest,
  Extraordinary Loss and Accounting Change                             20,102      (25,534)      (16,224)
Provision for Income Taxes (See Note 7)                                11,356       10,888         6,542

Income (Loss) Before Minority Interest, Extraordinary Loss
   and Accounting Change                                                8,746      (36,422)      (22,766)
Minority Interest in Net Income of Subsidiaries                         4,533        4,135         3,196

Income (Loss) Before Extraordinary Loss
   and Accounting Change                                                4,213      (40,557)      (25,962)
Extraordinary Loss on Early Extinguishment of Debt, Net of
   Applicable Income Taxes (See Note 5)                                (3,448)          --            --
Cumulative Effect of Change in Accounting Principle (See Note 4)           --         (194)           --

Net Income (Loss)                                                    $    765     $(40,751)    $ (25,962)

Income (Loss) Per Share of Common Stock:
  Primary Income (Loss) Before Extraordinary Loss
    and Accounting Change                                            $    .18     $  (1.84)    $   (1.18)
  Extraordinary Loss                                                     (.15)          --            --
  Accounting Change                                                        --         (.01)           --
  Primary Net Income (Loss)                                          $    .03     $  (1.85)    $   (1.18)

  Fully Diluted Income Before Extraordinary Loss
    and Accounting Change                                            $    .14
  Extraordinary Loss                                                     (.11)
  Fully Diluted Net Income                                           $    .03

Average Shares Outstanding
  Primary                                                              22,691       22,027        22,027
  Fully Diluted                                                        30,520

(See notes to consolidated financial statements)
</TABLE

The Interlake Corporation
Consolidated Balance Sheet
December 31, 1995 and December 25, 1994
(Dollars in thousands)

</TABLE>
<TABLE>                                                         
                                                                       1995         1994    
Assets
Current Assets:                                                                   
<S>                                                                  <C>          <C>
  Cash and cash equivalents                                          $ 41,562     $ 39,708
  Receivables less allowances of $3,425 in 1995
    and $2,977 in 1994                                                132,331      129,089
  Inventories                                                          78,730       73,853
  Other current assets                                                 15,100        6,340
  Total Current Assets                                                267,723      248,990

Other Assets                                                           43,269       50,229

Property, Plant and Equipment, net                                    148,810      145,734

Total Assets                                                         $459,802     $444,953

Liabilities and Shareholders' Equity (Deficit)
Current Liabilities:
  Accounts payable                                                   $ 75,266     $ 71,957
  Accrued liabilities                                                  47,464       42,563
  Interest payable                                                     11,150       13,910
  Accrued salaries and wages                                           15,648       18,060
  Income taxes payable                                                 14,665       10,328
  Debt due within one year (See Note 13)                                3,759       24,553
Total Current Liabilities                                             167,952      181,371
Long-Term Debt (See Note 13)                                          439,856      417,898
Other Long-Term Liabilities                                            87,362       75,753
Deferred Tax Liabilities (See Note 7)                                   9,307        6,038
Commitments and Contingencies (See Note 16)                                --           --
Minority Interest                                                       7,847       21,173
Preferred Stock--2,000,000 shares authorized
  Convertible Exchangeable Preferred Stock--Redeemable,
    par value $1 per share, issued 40,000 shares  (liquidation value
    $54,602 at December 31,1995 and $47,847 at
    December 25, 1994) (See Note 10)                                   39,155       39,155
Shareholders' Equity (Deficit): (See Note 11)
  Common stock, par value $1 per share, authorized
    100,000,000 shares, issued 23,228,695 in 1995 and 1994             23,229       23,229
  Additional paid-in capital                                           13,504       30,248
  Cost of common stock held in treasury (412,500 shares in
    1995 and 1,202,000 shares in 1994)                                 (9,625)     (28,047)
  Retained earnings (Accumulated deficit)                            (293,201)    (293,966)
  Unearned compensation                                                (8,950)     (10,058)
  Accumulated foreign currency translation adjustments                (16,634)     (17,841)
Total Shareholders' Equity (Deficit)                                 (291,677)    (296,435)
Total Liabilities and Shareholders' Equity (Deficit)                 $459,802     $444,953


(See notes to consolidated financial statements)
</TABLE>
The Interlake Corporation
Consolidated Statement of Cash Flows
For the Years Ended December 31, 1995,
 December 25, 1994 and December 26, 1993
(in thousands)
<TABLE>
<CAPTION>
                                                     1995         1994           1993     
                                                  (53 weeks)   (52 weeks)     (52 weeks)
<S>
Cash Flows from (for) Operating Activities:        <C>          <C>           <C>
 Net income (loss)                                 $    765     $(40,751)     $(25,962)
 Adjustments to reconcile net income (loss) to
  net cash provided by operating activities:
   Restructuring charge                                  --           --         5,611
   Goodwill write-down                                   --       34,174            --
   Depreciation and amortization                     20,298       23,102        25,040
   Extraordinary item                                 3,448           --            --
   Nonoperating environmental matters                    --           --         4,750
   Other operating adjustments                        2,982       13,172        (7,231)
   (Increase) Decrease in working capital:
     Accounts receivable                               (993)     (18,754)       16,233
     Inventories                                     (3,837)       5,880        (4,190)
     Other current assets                            (1,762)       3,249        (1,642)
     Accounts payable                                 2,040        9,897           519
     Other accrued liabilities                       (3,717)         758        (2,708)
     Income taxes payable                             4,660       (7,560)       (2,432)
       Total Working Capital Change                  (3,609)      (6,530)        5,780
Net Cash Provided (Used) by Operating Activities     23,884       23,167         7,988
Cash Flows from (for) Investing Activities:
 Capital expenditures                               (21,299)     (15,485)      (14,540)
 Proceeds from disposal of PP&E                         329          477           284
 Acquisitions                                            --         (746)           --
 Other investment flows                                 762        1,137         1,122
Net Cash Provided (Used) by Investing Activities    (20,208)     (14,617)      (13,134)
Cash Flows from (for) Financing Activities:
 Proceeds from issuance of long-term debt           110,127       10,656           104
 Retirements of long-term debt                     (108,624)     (11,970)       (7,582)
 Debt issuance costs                                 (4,773)      (1,264)           --
 Other financing flows                                2,111        1,982         6,158
Net Cash Provided (Used) by Financing Activities     (1,159)        (596)       (1,320)
Effect of Exchange Rate Changes on Cash                (663)        (180)         (240)
Increase (Decrease) in Cash and Cash Equivalents      1,854        7,774        (6,706)
Cash and Cash Equivalents, Beginning of Year         39,708       31,934        38,640
Cash and Cash Equivalents, End of Year            $  41,562     $ 39,708      $ 31,934


(See notes to consolidated financial statements)
</TABLE>
The Interlake Corporation
Consolidated Statement of Shareholders' Equity (Deficit)
For the Years Ended December 31, 1995,
 December 25, 1994 and December 26, 1993
(in thousands)
<TABLE>
<CAPTION>         
                                     Common Stock            Common Stock           Retained    Unearned    Foreign
                                     and Paid-In Capital    Held in Treasury        Earnings    Compen-     Currency
                                     Shares      Amount    Shares     Amount       (Deficit)     sation    Translation     Total
<S>                                  <C>         <C>       <C>        <C>         <C>          <C>           <C>         <C>
Balance December 27, 1992            23,229      $53,500   (1,202)    $(28,060)   $(227,252)   $(12,934)     $(17,972)   $(232,718)
Net income (loss)                                                                   (25,962)                               (25,962)
Stock incentive plans (See Note 12)                  (23)                   13           (1)         46                         35
ESOP transactions (See Note 11)                                                                   1,609                      1,609
Translation loss                                                                                               (2,731)      (2,731)
                                   
Balance December 26, 1993            23,229       53,477   (1,202)     (28,047)    (253,215)    (11,279)      (20,703)    (259,767)
Net income (loss)                                                                   (40,751)                               (40,751)
Stock incentive plans (See Note 12)                                                                  15                         15
ESOP transactions (See Note 11)                                                                   1,206                      1,206
Translation gain                                                                                                2,862        2,862

Balance December 25, 1994            23,229       53,477   (1,202)     (28,047)    (293,966)    (10,058)      (17,841)    (296,435)
Net income (loss)                                                                       765                                    765
Stock incentive plans (See Note 12)              (16,744)     789       18,422                   (1,004)                       674
ESOP transactions (See Note 11)                                                                   2,112                      2,112
Translation gain                                                                                                1,207        1,207
                                                                                             
Balance December 31, 1995            23,229      $36,733     (413)    $ (9,625)   $(293,201)   $ (8,950)     $(16,634)   $(291,677)

(See notes to consolidated financial statements)
</TABLE>
The Interlake Corporation
Notes to Consolidated Financial Statements
For the Years Ended December 31, 1995, December 25, 1994 and December 26, 1993
(All dollar amounts in thousands except where indicated)


NOTE 1--Summary of Significant Accounting Policies

Principles of Consolidation--The consolidated financial statements include the
accounts of all majority-owned domestic and foreign subsidiaries.  All
significant intercompany transactions are eliminated.

Cash Equivalents--The Company considers all highly liquid financial instruments
with original maturities of three months or less to be cash equivalents and
reports the earnings from these instruments as interest income.

Revenue Recognition--Revenue from sales is generally recognized when product is
shipped, except on long-term contracts in the Handling/Packaging Systems
segment, where revenue is accounted for principally by the percentage-of-
completion method.

Deferred Charges--The Aerospace Components unit periodically enters into long-
term agreements with customers on major programs where tooling and other
development costs are capitalized as Other Assets.  These assets are then
amortized during the production stage by the units-of-production method.

Inventories--Inventories are stated at the lower of cost or market value. 
Inventories valued on the LIFO method represent approximately 32% and 41% of
consolidated inventories and 55% and 50% of domestic inventories at December
31, 1995 and December 25, 1994, respectively.  The current cost of these
inventories exceeded their valuation determined on a LIFO basis by $14,381 at
December 31, 1995 and by $15,513 at December 25, 1994.

During 1995, 1994, and 1993, inventory quantities valued on the LIFO method
were reduced, resulting in the liquidation of LIFO inventory quantities carried
at lower costs that prevailed in prior years as compared with the costs of
production for 1995, 1994, and 1993.  As a result, pretax income in 1995, 1994,
and 1993 was increased by $805, $951, and $1,201, respectively.

Inventories by category at December 31, 1995 and December 25, 1994 were:

                                                 1995        1994    
          Raw materials                        $ 16,247   $ 14,703
          Semi-finished and finished products    55,140     50,978
          Supplies                                7,343      8,172

                                               $ 78,730   $ 73,853

Leases--The Company frequently enters into operating leases in the normal
course of business.  Amounts due under noncancellable operating leases in the
next five fiscal years are as follows:

            1996      1997      1998      1999      2000  
           $5,539    $5,043    $3,572    $3,411   $3,048

Rent expense charged to operating income was $11,969, $11,853, and $11,271 in
1995, 1994, and 1993, respectively.

Property, Plant and Equipment and Depreciation--For financial reporting
purposes, plant and equipment are depreciated principally on a straight-line
method over the estimated useful lives of the assets.  Depreciation for income
tax purposes is computed by use of accelerated methods.

Expenditures for renewals and betterments which extend the originally estimated
useful life of an asset or materially increase its productivity are
capitalized.  Expenditures for maintenance and repairs are charged to expense
as incurred.  Upon sale or disposal of property, plant and equipment, the asset
cost and related accumulated depreciation are removed from the accounts, and
any gain or loss on the disposal is generally credited or charged to
nonoperating income.
Property, plant and equipment by category at December 31, 1995 and December 25,
1994 were:

                                               1995            1994   
          At Cost:
            Land                            $   7,122       $   6,946
            Buildings                          77,878          75,788
            Equipment                         308,282         294,239
            Construction in progress            8,843           5,867
                                              402,125         382,840
            Depreciation                     (253,315)       (237,106)

                                            $ 148,810       $ 145,734

Goodwill--Goodwill represents the excess of the purchase price over the fair
value of the net assets of acquired companies and is amortized on a straight-
line method over periods not exceeding thirty years.  The Company carries its
goodwill assets at their purchase prices, less amortized amounts, but subject
to periodic review for impairment.  In 1994, the Company changed its accounting
policy for valuation of its long-lived assets, primarily goodwill, to reflect
its cost of capital in calculating the present value of the projected future
cash flows expected to be generated over the lives of those assets.  Under this
policy, projections of cash flows for individual business units are discounted
at the approximate incremental cost of borrowing for the Company.  This
discounted amount is then compared to the carrying value of the long-lived
assets to determine if their value is impaired (see Note 2).  The Company will
adopt the Financial Accounting Standards Board's Statement of Financial
Accounting Standards (FAS) No. 121, "Accounting for the Impairment of Long-
Lived Assets and for Long-Lived Assets to be Disposed Of" in 1996.  This change
in accounting policy is not expected to have a material effect on the financial
statements.

Foreign Currency Translation--The financial position and results of operations
of the Company's foreign subsidiaries are measured using local currency as the
functional currency.  Assets and liabilities of these subsidiaries are
translated at the exchange rate in effect at each fiscal year end.  Results of
operations are translated at the average rates of exchange prevailing during
the year.  Translation adjustments arising from differences in exchange rates
from period to period are included in the accumulated foreign currency
translation adjustments account in shareholders' equity (deficit).

Foreign Exchange Contracts--The Company periodically enters into foreign
exchange contracts to hedge specific inventory purchases and other transactions
denominated in foreign currencies.  Premiums received and fees paid on foreign
exchange contracts are deferred and amortized over the period of the contracts.
At December 31, 1995, the Company had outstanding currency contracts to
exchange 264.6 million yen for $.9 million and 1.1 million pounds sterling, and
 .6 million pounds sterling for 1.4 million deutsche marks.  The Company's
exposure to loss in the event of nonperformance by the other parties to these
contracts is limited to the effect of the currency fluctuations related to the
amounts to be exchanged; however, the Company does not anticipate
nonperformance by the counterparties.

Interest Rate Hedges--The Company utilizes swap agreements to hedge a portion
of its interest rate exposure on floating rate obligations (see Notes 13 and
14).  Interest expense increases or decreases are accrued as they occur and are
settled on a quarterly basis.  At current interest rates the Company has no
exposure to credit loss.

Research and Development Expenses--Research and development expenditures for
Company sponsored projects are generally expensed as incurred.  Research and
development expenses included in selling and administrative expenses were
$2,151, $2,107, and $2,153 for the Engineered Materials segment in 1995, 1994,
and 1993, respectively, and $1,178, $1,303, and $1,092 for the
Handling/Packaging Systems segment in 1995, 1994, and 1993, respectively.

Computation of Common Share Data--The weighted average number of common shares
outstanding used to compute income (loss) per common share for the 1995 period
was 22,691,000 and for the 1994 period was 22,027,000 for primary shares, and
for fully diluted shares was 30,520,000 in the 1995 period.  (The weighted
average shares outstanding excludes 7,692,000 contingent shares in the 1994
period related to the convertible preferred stock because the conversion of the
preferred stock into such shares would have an anti-dilutive effect.)

Use of Estimates--The preparation of 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 related notes to financial statements.  Changes in such
estimates may affect amounts reported in future periods.

Accounting for Stock Based Compensation--In October of 1995, the Financial
Accounting Standards Board issued FAS 123, "Accounting for Stock Based
Compensation".  The statement, effective for fiscal year 1996, establishes a
fair value based method of accounting for employee stock based compensation
plans and encourages adoption of that method.  Companies may, however, continue
to apply the method currently prescribed under existing accounting rules,
provided certain pro forma disclosures are made.  The Company plans to retain
the accounting prescribed under the existing rules and will provide the
necessary disclosures in the notes to the consolidated financial statements in
1996.

NOTE 2--Goodwill Write-down

In 1994, the Company concluded that, in the light of its highly leveraged
capital structure and significant losses, a preferable accounting policy for
analyzing the potential impairment of long-lived assets would be to reflect the
cost of capital in computing the present value of the expected cash flows of
its businesses.  In particular, the aerospace industry was suffering the
combined impacts of a significant decrease in U.S. military spending in the 
post-Reagan years and competitive pricing due to overcapacity in the airline
industry, while the newspaper industry was continuing to go through an
industry-wide consolidation.

Applying this new policy to all of its long-lived assets the Company
determined, with respect to its Aerospace Components and newspaper-related
Packaging businesses, that in the light of the significant deterioration in
business climates in the aerospace and newspaper industries over recent years, 
the values of the discounted cash flows were insufficient to recover the
carrying value of the long-lived assets.  Therefore, the goodwill included
among those assets was deemed to be impaired.  As a result, a charge of $34,174
was recorded for the write-down of goodwill established in connection with the
acquisitions of the Aerospace Components and newspaper-related Packaging
businesses.  As of December 31, 1995, the remaining net investment in these
businesses was approximately equal to the value of the discounted projected
cash flows attributable to them, and consisted primarily of tangible assets. 
The discounted projected cash flows of the Company's other businesses all
exceeded their carrying values.

NOTE 3--Restructuring Charges

In 1993, the Company provided $5,611 for restructuring costs related to:  the
exit from certain lines of business that were part of Handling North America;
the reorganization and downsizing of portions of the European Handling
operation; and, in the Aerospace Components business, the abandonment of
certain product lines which resulted in idled equipment and severance costs
related to a downsizing of the aviation repair workforce.  The $5,611 consisted
of $1,676 in severance costs, $1,515 of idled equipment written down to fair
market value, $1,367 of inventory related to the exited businesses and $1,053
of other costs.  Quantification of the anticipated effects of the restructuring
on subsequent operating results is not practical because some of the actions
were taken to avoid future costs while other actions were strategic in nature
and implemented to limit exposure to changing market dynamics.  These
restructuring activities are complete.

NOTE 4--Cumulative Effect of Change in Accounting Principle

In 1994, the Company adopted the Financial Accounting Standards Board's
Statement of Financial Accounting Standards (FAS) No. 106, "Employers'
Accounting for Postretirement Benefits Other Than Pensions" for its foreign
locations.  The one-time cumulative effect of this adoption on income was a net
charge of $194 ($.01 per share).

NOTE 5--Extraordinary Loss

In 1995, the Company completed the sale of $100,000 of 12% Senior Notes in a
public offering and entered into a substantial amendment and restatement of its
senior bank credit agreement.  Proceeds of the Senior Notes were used to repay
a portion of its outstanding bank debt.  This necessitated the write-off of
issuance costs related to the previously outstanding indebtedness which were
originally deferred to be amortized over the original life of the indebtedness.
This resulted in an extraordinary loss of $3,448 (equivalent to $.15 per share)
without any currently usable tax benefit in 1995.

The cash flow impact of the early extinguishment of debt was immaterial. 
However, debt issuance and related  costs in 1995 had a negative cash flow
consequence of $4,773 which was deducted in determining cash flows from
financing activities in the Consolidated Statement of Cash Flows.

NOTE 6--Business Segment Information

The Company operates in two segments:

          Engineered Materials--includes Special Materials, which produces
          ferrous metal powder used to manufacture precision parts, and
          Aerospace Components, which manufactures precision jet engine
          components and repairs jet engine fan blades.

          Handling/Packaging Systems--comprised of the Company's Handling
          operations, which design, manufacture and sell storage rack, shelving
          and related equipment primarily for use in warehouses, distribution
          centers and for other storage applications; and the Company's
          Packaging operations, which design and sell machinery for applying
          strapping and stitching wire, and also supply strapping and stitching
          wire for use in such machines.

The accompanying tables present financial information by business segment for
the years 1995, 1994, and 1993.  Operating profit consists of net sales of the
segment less all costs and expenses related to the segment.  "Corporate Items"
includes items which are not related to either of the two business segments. 
Total assets by business segment consist of those assets used directly in the
operations of each segment.  Corporate net assets consist principally of cash,
nonoperating investments and prepaid pension cost.

Information About The Company's Business Segments
<TABLE>
                                                     Net Sales                Operating Profit (Loss)        Identifiable Assets
                                             1995      1994      1993        1995      1994      1993       1995    1994     1993
                                                                                   (in millions)
<S>                                         <C>       <C>       <C>         <C>       <C>        <C>       <C>      <C>      <C>
Engineered Materials
 Special Materials                          $175.7    $153.9    $131.5
 Aerospace Components                         72.7      62.5      61.0

                                             248.4     216.4     192.5      $ 39.4    $ 32.3     $ 26.3
 Goodwill Write-down                                                            --     (13.2)        --
 Restructuring Charge                                                           --        --       (1.8)

                                             248.4     216.4     192.5        39.4      19.1       24.5    $172.6   $166.6   $178.3

Handling/Packaging Systems
 Handling                                    441.5     406.0     366.7
 Packaging                                   141.2     130.2     122.1
                                             582.7     536.2     488.8        34.2      28.1       19.1
 Goodwill Write-down                                                            --     (21.0)        --
 Restructuring Charge                                                           --        --       (3.8)

                                             582.7     536.2     488.8        34.2       7.1       15.3     229.5    221.6    235.1

Corporate Items                                                               (2.0)     (2.0)      (1.6)     57.7     56.8     50.8

Operating Profit                                                              71.6      24.2       38.2

Net Interest Expense                                                         (52.5)    (50.2)     (49.1)
Nonoperating Income (Expense)                                                  1.0       0.5       (5.3)

Consolidated Totals                         $831.1    $752.6    $681.3      $ 20.1    $(25.5)    $(16.2)   $459.8   $445.0   $464.2

Depreciation and Amortization
 Engineered Materials                       $ 10.5    $ 11.7    $ 12.2
 Handling/Packaging Systems                    9.7      11.2      12.6
 Corporate Items                               0.1       0.2       0.2

Consolidated Total                          $ 20.3    $ 23.1    $ 25.0

Capital Expenditures
 Engineered Materials                       $ 13.0    $  8.3    $  9.0
 Handling/Packaging Systems                    8.3       7.2       5.5

Consolidated Total                          $ 21.3    $ 15.5    $ 14.5

Liquidation of LIFO Inventory Quantities
 Engineered Materials                       $   --    $   --    $   --
 Handling/Packaging Systems                    0.8       1.0       1.2
</TABLE>

Information About The Company's Operations by Geographic Region

The following table presents information about the Company's operations by
geographic area.  Transfers between geographic areas, which are all in the
Handling/Packaging Systems segment, are made at prices which approximate the
prices of similar items sold to distributors.  Operating profit by geographic
area is the difference between net sales attributable to the area and all costs
and expenses related to that area.  Export sales to unaffiliated customers
included in the United States' sales are not material.  Sales to domestic and
foreign government agencies are not material.
<TABLE>
<CAPTION>                                                                                                
                                                    Net Sales                   Operating Profit (Loss)      Identifiable Assets
                                             1995      1994      1993       1995       1994        1993     1995    1994      1993 
                                                                                   (in millions)
<S>                                         <C>       <C>       <C>         <C>       <C>        <C>       <C>      <C>      <C>
United States
 Customer Sales                             $484.8    $439.1    $390.0
 Inter-geographic                              2.9       3.5       2.8
  Subtotal                                   487.7     442.6     392.8      $ 54.6    $ 43.1     $ 32.1
 Goodwill Write-down                                                            --     (34.2)        --
 Restructuring Charge                                                           --        --       (3.8)

                                             487.7     442.6     392.8        54.6       8.9       28.3    $240.3   $240.1   $275.1

United Kingdom
 Customer Sales                              146.9     135.0     126.9     
 Inter-geographic                              6.2       7.3       4.2
  Subtotal                                   153.1     142.3     131.1         8.9      10.0        6.5
        Restructuring Charge                                                    --        --       (0.6)                   
 

                                             153.1     142.3     131.1         8.9      10.0        5.9      64.7     60.7     56.9
Continental Europe
 Customer Sales                               89.1      75.1      79.6     
 Inter-geographic                              0.5       0.5       0.2
  Subtotal                                    89.6      75.6      79.8         1.6       1.4        3.1     
 Restructuring Charge                                                           --        --       (0.5)

                                              89.6      75.6      79.8         1.6       1.4        2.6      44.8     40.1     37.8
Canada and Asia Pacific
 Customer Sales                              110.3     103.4      84.8     
 Inter-geographic                              2.6       2.9       1.2
  Subtotal                                   112.9     106.3      86.0         8.5       5.9        3.7
 Restructuring Charge                                                           --        --       (0.7)

                                             112.9     106.3      86.0         8.5       5.9        3.0      52.3     47.3     43.6

Corporate Items/Eliminations                 (12.2)    (14.2)     (8.4)       (2.0)     (2.0)      (1.6)     57.7     56.8     50.8

Operating Profit                                                              71.6      24.2       38.2

Net Interest Expense                                                         (52.5)    (50.2)     (49.1)
Nonoperating Income (Expense)                                                  1.0       0.5       (5.3)

Consolidated Totals                         $831.1    $752.6    $681.3      $ 20.1    $(25.5)    $(16.2)   $459.8   $445.0   $464.2


Liquidation of LIFO Inventory Quantities
 United States                              $   --    $  0.1    $   --
 United Kingdom                                 --       0.5       1.1
 Continental Europe                             --       0.1        --
 Canada and Asia Pacific                       0.8       0.3       0.1
</TABLE>

 NOTE 7--Income Taxes

Income (Loss) before taxes, minority interest,
  extraordinary loss and accounting changes consisted of:

                                 1995        1994        1993   
       Domestic               $  4,529    $(39,188)   $(25,482)
       Foreign                  15,573      13,654       9,258

                              $ 20,102    $(25,534)   $(16,224)
The provisions for taxes on income consisted of:

                                 1995        1994        1993   
      Current:
       U.S. Federal           $  2,342    $  2,688    $    602
       State                     3,379       2,892       2,343
       Foreign                   4,630       3,001       3,697
       Total                    10,351       8,581       6,642

      Deferred:
       U.S. Federal                321      (3,493)         --
       State                        --          --          --
       Foreign                     300       1,676        (100)
       Total                       621      (1,817)       (100)
 
      Change in Net Operating Loss Carryforwards:
       U. S. Federal                --       3,172          --
       Foreign                     384         952          --
       Total                       384       4,124          --

      Tax Provision           $ 11,356    $ 10,888    $  6,542


The company reported consolidated income tax expense for all years presented
consisting primarily of current taxes and deferred taxes on income earned in
foreign and state jurisdictions.  

In 1995, 1994 and 1993, high levels of interest expense and differences in
income and expense recognition resulted in losses for U.S. federal income tax
purposes.

Since most of the interest expense is borne in the United States at the parent
company level, throughout each period the Company had taxable income in foreign
and state jurisdictions despite the high levels of consolidated interest
expense.  For each period presented, the Company also provided for additional
amounts related to open federal tax return years 1982 through 1990.  In 1994,
the goodwill write-down did not result in a deduction allowable for tax
purposes.  The Company's effective tax rate was 56.5% in 1995.  Items
increasing the effective tax rate above the U.S. statutory rate of 35% included
state income taxes (net of federal income tax benefit) of 11.5%, and
adjustments to prior year accruals of 15.0% partially offset by other
insignificant items.  In 1994 and 1993, the effective tax rate analysis would
not be meaningful.  

The U.S. federal tax net operating loss carry-forward, which was $32,159 at the
end of 1995, will expire in varying amounts starting in 2006 through 2010.  The
tax effects of this benefit as well as the net deferred domestic temporary
differences were fully reserved in the valuation allowance principally because
of uncertainties regarding the availability of such benefits in the future and
the company's recent history of tax losses.

Actual cash disbursements for income taxes and other tax assessments were
$6,896, $4,844, and $8,586 in 1995, 1994, and 1993, respectively.

Deferred tax liabilities and assets are comprised of the following:

                                        1995       1994   
     Deferred tax liabilities
     Depreciation                     $ 21,208  $ 20,123
     Other                               3,548     3,034
                                      $ 24,756  $ 23,157
    Deferred tax assets
     Deferred employee benefits       $ 17,448  $ 16,905
     Net operating loss carryforward    12,151     8,557
     AMT credit carryforwards            2,016     2,168
     Inventory                           2,854     3,407
     Recapitalization costs              1,635     2,049
     Environmental reserves              2,155     2,189
     Other                               4,472     3,795
                                        42,731    39,070
    Valuation allowances               (21,232)  (18,165)
                                      $ 21,499  $ 20,905

As of December 31, 1995, U.S. federal income tax returns for the years 1988
through 1990 were in the process of examination.  Resolution of tax years 1982-
1984 is pending with the U.S. Tax Court following receipt of a statutory notice
for $17,000 plus penalties and interest.  Resolution of tax years 1985-1987 is
pending with the Appeals Division of the Internal Revenue Service.  The Company
believes that adequate provision has been made for possible assessments of
additional taxes.

No provision has been made for U.S. income taxes on approximately $38,085 of
undistributed earnings of foreign subsidiaries, some of which are subject to
statutory restrictions on distribution.

NOTE 8--Pensions

The Company has various defined benefit and defined contribution pension plans
which between them cover substantially all employees.

The provision for defined benefit pension costs includes current costs,
interest costs, actual return on plan assets, amortization of the unrecognized
net asset existing at the date of transition and net unrealized gains and
losses.  Benefits are computed based mainly on years of service and
compensation during the latter years of employment.  Company contributions are
determined according to the funding requirements set forth by ERISA, and in the
case of foreign plans, local statutory requirements.

Certain of the Company's defined benefit plans relate to foreign locations and
are denominated in currencies other than U.S. dollars.  All plans use similar
economic assumptions.  The following table sets forth the funded status of
domestic and foreign defined benefit plans and the amounts included in the
year-end balance sheet.

                                                            1995        1994   
  Plan assets at fair value                               $146,787    $131,387
  Actuarial present value of 
   accumulated benefit obligation:
   Vested benefits                                         133,880     108,143
   Non-vested benefits                                       1,103       1,243
                                                           134,983     109,386
   Effect of assumed future compensation increases          14,955      13,452
   Projected benefit obligation for service to date        149,938     122,838
   Plan assets in excess of projected benefit obligation    (3,151)      8,549
   Items not yet recognized in earnings:
    Unrecognized net asset at December 28, 1986
     (being recognized over 15 years)                       11,994      13,881
    Unrecognized net actuarial gain (loss)                 (15,558)     (6,231)
    Unrecognized prior service cost                         (7,236)     (6,456)
                                                           (10,800)      1,194

    Prepaid (Accrued) pension liability                   $  7,649    $  7,355

In aggregate, the plans are underfunded by $3,151 at December 31, 1995 compared
with an overfunded balance of $8,549 at December 25, 1994.  This change was
caused, in large part, by a reduction in the discount rate used in the various
pension plans.

Net pension cost (income) included in operating profit for these plans consists
of the following components:

                                               1995         1994        1993   
    Service cost                           $   3,470     $   3,679  $   3,068
    Interest cost                             10,361         9,747      9,298
    Actual return on plan assets 
     [(income) loss]                         (15,952)       (6,795)   (12,107)
    Net amortization and deferred items        2,105        (7,657)      (434)
    Net pension cost (income)              $     (16)    $  (1,026) $    (175)
    Assumptions used in the computations:
       Assumed discount rate                   7.5-9%        7.5-9%       7-9%
       Expected long-term rate of return 
        on plan assets                         8.5-9%        8.5-9%       7-9%
       Rate of increase in future 
        compensation levels                      4-6%          4-7%       4-6%

Pension plan assets are primarily invested in common and preferred stock, short
and intermediate term cash investments, and corporate bonds.

The expense for the Company's defined contribution pension plans covering
certain domestic employees was $2,526, $1,835, and $2,267 in 1995, 1994, and
1993, respectively.  Annual contributions to defined contribution plans are
equal to the amounts accrued during the year.

In 1989, the Company established a non-contributory, defined contribution
employee stock ownership plan (ESOP) covering all domestic employees not
covered by collective bargaining agreements.  Company contributions are
allocated to participants based on the ratio each participant's compensation
bears to the total compensation of all eligible participants.  The Company
makes contributions to the plan in the amount necessary to enable the plan to
make its regularly scheduled payments of principal and interest on its term
loan under the bank credit agreement (see Note 13).  Amounts charged to
employee benefits and interest during the year totalled $1,709 and $824,
respectively, in 1995, $1,307 and $741, respectively, in 1994, and $1,508 and
$703, respectively, in 1993.

NOTE 9--Postretirement Benefits Other Than Pensions

In 1994, the Company adopted FAS No. 106, "Employers' Accounting for Post
Retirement Benefits Other Than Pensions" for its foreign locations.  The one-
time cumulative effect of this adoption on income was a net charge of $194.

The following table sets forth the status of the plans, reconciled to the
accrued cost for postretirement medical and life benefits recognized in the
Company's year-end balance sheet.

                                                       1995          1994 
      
   Accumulated postretirement benefit obligation:
    Retirees                                          $23,017      $22,751  
    Fully eligible active plan participants             2,403        2,203
    Other active plan participants                      2,082        1,975
   Total accumulated postretirement benefit
     obligation                                        27,502       26,929
   Unrecognized prior service cost                      2,013        2,177
   Unrecognized gain (loss)                             4,996        5,595
   Accrued postretirement benefit cost                $34,511      $34,701

Net periodic postretirement benefit cost included the following components:

                                                  1995      1994      1993   
      
    Service cost on benefits earned             $  172   $   205   $   242
    Interest cost on accumulated postretirement
      benefit obligation                         2,082     2,062     2,389
    Unrecognized prior service cost               (164)     (164)     (123)
    Unrecognized gain (loss)                      (307)     (118)      (57)
    Net periodic postretirement benefit cost 
      charged to results from operations       $ 1,783   $ 1,985   $ 2,451

For measuring the expected postretirement benefit obligation, a 13% annual rate
of increase in the per capita claims cost was assumed for 1995.  This rate was
assumed to decrease 1% per year to 6% in 2002 and remain at that level
thereafter.  The weighted-average discount rate used in determining the
accumulated postretirement benefit obligation was 7.5% at December 31, 1995 and
8.5% at December 31, 1994.  The rate of compensation increase used to measure
the accumulated postretirement benefit obligation for the death benefit plans
was 4% in both 1995 and 1994.

If the health care cost trend rate were increased 1%, the accumulated
postretirement benefit obligation as of December 31, 1995 would have increased
by 5%.  The effect of this change on the aggregate of service and interest cost
for 1995 would be an increase of 6%.

The provision for postretirement benefits other than pensions included in
operating profit was $1,045, $1,107, and $167 in 1995, 1994, and 1993,
respectively.  In 1993, costs were lower because of benefit changes made by the
Company which resulted in a curtailment gain of $1,141.  The provision for such
costs included in nonoperating income was $738, $878, and $1,143 in 1995, 1994,
and 1993, respectively.

NOTE 10--Convertible Exchangeable Preferred Stock

In 1992, the Company issued 40,000 shares of Series A Preferred Stock.  The
preferred stock is convertible into common stock and bears a 9% per annum
dividend payable semi-annually beginning December 31, 1992.  The preferred
stock initially was convertible at $6.50 per share.  However, to the extent
dividends are not paid in cash on the semi-annual dividend payment date, an
adjustment is made which reduces the per share conversion price.  Upon such an
adjustment, all accrued and unpaid dividends on the shares of preferred stock
through the date of adjustment cease to be accrued and unpaid.  Dividends have
not been paid on the preferred shares since their issuance, and due to
restrictions in the bank credit agreement and the indentures relating to the
Company's Senior Subordinated Debentures and the Senior Notes, it is not
expected that cash dividends will be paid on the preferred stock for the
foreseeable future.  Accordingly, it is expected that the conversion price of
the preferred stock will continue to decline approximately 4.5% on each semi-
annual dividend payment date, resulting in an increase in the aggregate number
of shares of common stock issuable upon conversion of the preferred stock.  As
a result of the operation of these provisions, the conversion price of the
preferred stock was reduced to $4.77 per share as of December 31, 1995.  In
addition, to the extent dividends are not paid on the preferred stock in cash,
the liquidation preference on the preferred stock increases at a rate of 9% per
year, compounded semi-annually, and as of December 31, 1995 was $54,602.  Upon
certain events defined as "changes in control" or fundamental changes, the
holders of the preferred stock have the right to require the Company to
purchase the shares at the liquidation preference value, subject to certain
limitations.  The Company believes that the probability of these events
occurring is remote and, therefore, the preferred stock is not stated at the
liquidation preference value.

NOTE 11--Shareholders' Equity (Deficit)

In 1992, the Company sold 11,488,000 shares of common stock, par value $1 per
share, in an underwritten public offering at a public offering price of $4.00
per share.  The net proceeds of this sale of $41,759 were added to common stock
and additional paid-in capital in the amounts of $11,488 and $30,271,
respectively.  Each share of common stock has the right to one vote per share
on all matters submitted to a vote of the shareholders of the Company.

In 1992, a new class of non-voting common stock with a par value of $1 per
share was created, of which 15,000,000 shares were authorized.  None has been
issued.  Shares of non-voting common stock have no voting rights except as
otherwise provided or as required by law.

No dividend payments were made in 1995, 1994, and 1993 and, due to restrictions
in the bank credit agreement and the indentures relating to the Senior
Subordinated Debentures and the Senior Notes, it is not expected that cash
dividends will be paid in the foreseeable future. 

The Company established an ESOP in 1989 with an initial contribution of 10,000
shares, followed by the sale of 1,100,000 shares to the ESOP.  Under a related
stock purchase program, the Company's Board of Directors authorized the
purchase of the lesser of 1,100,000 shares or the number of shares purchasable
for $16,088 in the open market or in privately negotiated transactions.  As of
December 31, 1995, a total of 893,739 shares had been acquired at a cost of
$11,083, unchanged from the prior year end.  Further repurchases under the
stock purchase program are prohibited by the Company's bank credit agreement
and the indentures related to its Senior Subordinated Notes and Senior Notes.

Unearned compensation represents estimated future charges to income by reason
of the ESOP and stock awards previously granted.  Principal and interest
payments on the ESOP borrowings are charged against earnings as employee
compensation and interest expense, respectively.

In 1989, the Board of Directors declared a stock right dividend distribution. 
The purpose of these rights is to protect the Company against certain unfair
and abusive takeover tactics.  In certain circumstances, shareholders, other
than certain holders of 15% or more of Interlake's stock, have the right to
purchase Interlake stock from Interlake for less than its market price.  In
certain circumstances, Interlake shareholders can purchase, for less than
market value, shares of a company which acquires The Interlake Corporation.

NOTE 12--Stock Incentive Plans

The Company has in place two stock incentive programs adopted by its Board of
Directors and approved by the shareholders--the 1986 Stock Incentive Program
(the "1986 Program") and the 1989 Stock Incentive Program (the "1989 Program"
and, together with the 1986 Program, the "Stock Incentive Programs").  The
Stock Incentive Programs provide for the grant of awards and options for shares
of the Company's common stock to officers, key employees and outside directors
of the Company and its subsidiaries.  The 1989 Program also provides for the
grant of shares of common stock in lieu of cash bonuses and the 1986 Program
also provides for the grant of stock appreciation rights.

A summary of stock option activity under the Stock Incentive Programs follows:

                                           1995                       1994 
                                               Average                  Average
                                  Shares        Price        Shares      Price
  Stock Options:                           
  Outstanding-beginning of year  1,076,288      $6.15        1,188,162   $6.15
   Granted                          50,000       4.00               --      --
   Exercised                            --         --               --      --
   Canceled or expired            (139,808)      7.10         (111,874)   6.13
   Outstanding-end of year         986,480       5.91        1,076,288    6.15
   Exercisable-end of year         682,380       6.76          535,663    8.31

  Available shares                 309,337                     908,529       

NOTE 13--Long-Term Debt and Credit Arrangements

Long-term debt of the Company consists of the following:

                               December 31,  Interest  December 25,  Interest
                                   1995        Rates      1994         Rates 

  Senior Subordinated Debentures  $220,000     12.13%    $220,000      12.13%
  Senior Notes                     100,000     12.00           --         --
  Term Loans                        56,478   8.44-9.31     94,383     8.00-8.63
  Delayed Draw Term Loan                --        --       11,125       8.00
  Deferred Term Loans                   --        --        7,500       8.00
  Revolving Loans                   37,742   8.44-9.31     76,314     8.00-8.63
  ESOP Note                          7,943      8.44       10,055       8.00
  Obligations under long-term 
   lease agreements                  7,470   6.13-7.88      8,930     6.13-7.88
  Pollution control and industrial 
   development loan agreements      12,150   6.25-7.13     12,150     6.25-7.13
  Other                              1,832          --      1,994         --
                                   443,615                442,451
  Less-current maturities            3,759                 24,553

                                  $439,856              $ 417,898
  Weighted average interest rate               11.80%                  11.16%

During 1995, the Company completed the sale of $100,000 of 12% Senior Notes due
2001 in a public offering.  The proceeds from the offering were used to repay a
portion of the indebtedness outstanding under the Company's senior bank credit
facilities.  Concurrent with the closing of the sale of the Senior Notes and
the repayment of a portion of its outstanding bank debt, the Company and its
bank group completed a substantial amendment to the Company's senior bank
credit agreement to defer the amortization of substantially all of the
remaining bank indebtedness until 1999 and to revise certain terms and
financial covenants of the bank credit agreement.

At the end of 1995, the bank credit agreement provided facilities for term
loans of $62,262, revolving loans of up to $102,337 (subject to limitations
described below), and ESOP loans of $7,943.  Principal repayments for term and
revolving loans are due in 1999.  Principal amounts for ESOP loans are due in
varying amounts through 1999.

Under the terms of the bank credit agreement, the Company pays a commitment fee
of 1/2 percent on unused credit facilities and, in 1995, had the option to
borrow funds under the revolving and term facilities at the prime rate plus 1
3/4 percent, or various London Interbank Offered Rates (LIBOR) plus 2 3/4
percent, with such rates adjusted periodically.  The bank credit agreement
borrowing rates at December 31, 1995 ranged from 8.44% to 9.31%.  At the end of
1995, the Company had interest rate hedging arrangements with members of the
bank group fixing interest rates on $80,250 of debt under the bank credit
agreement at 8.59% plus the applicable spread.  These agreements mature on a
quarterly basis through 1997.  Without the swap agreements, the weighted
average cost of borrowing would have been .5 percentage points lower in 1995,
1.2 percentage points lower in 1994 and 1.6 percentage points lower in 1993.

The Senior Subordinated Debentures were sold in 1992 and bear interest at 12
1/8%.  Principal repayment is due in 2002, with sinking fund payment of $50,000
in 2001.

The long-term lease obligations relate principally to capitalized pollution
control facilities.  The interest rates on these obligations vary from 6.125%
to 7.875%.  Principal repayments are due in varying amounts through 2002.

The Company has borrowed funds under several loan agreements with state and
county pollution control and industrial development authorities to finance
certain environmental and facility expansion and improvement projects. 
Interest rates on these obligations vary from 6.25% to 7.125%.  Principal
repayments are to be made in varying amounts from 1998 to 2009.  At the time of
the spin-off of Acme Steel Company from the Company in 1986, Acme entered into
a parallel loan agreement in favor of the Company with respect to pollution
control bonds related to its facilities, which are currently outstanding for
$6,000.

The schedule of debt repayment requirements for the five years following 1995
is as follows:

                  1996    $3,759
                  1997     4,203
                  1998     4,072
                  1999    98,343
                  2000       339

Based on current levels of performance, which, if maintained throughout the
year will provide the Company with leeway under its bank credit agreement
covenants, and based on the availability of additional revolver borrowings
under the Company's bank credit agreement, the Company believes that it will
have adequate liquidity to meet its debt service and operating requirements in
1996.  Under the bank credit agreement, the Company is able to borrow under its
revolving facility up to an additional $40,832 over the 1995 year-end revolving
indebtedness.  In addition, the Company has available up to $5,784 of delayed
draw term loan for amounts that may be incurred in connection with certain
environmental matters.

Under the bank credit agreement the Company is limited in its ability to pay
cash dividends and repurchase its common stock.  There are no plans to pay
dividends in the immediate future.  In addition to scheduled repayments of
debt, the bank credit agreement requires certain mandatory prepayments in
connection with asset dispositions, issuances of stock, incurrence of
indebtedness and generation of annual excess cash flows.  The bank credit
agreement contains covenants relating to earnings before interest, taxes and
depreciation and amortization; capital expenditures; and net worth.  Amounts
available under the revolving facility are limited based upon percentages of
qualified receivables and inventories.  Substantially all of the Company's
assets are pledged under the bank credit agreement.

In 1999, the Company has debt amortization requirements of $98,343, which it
does not expect to be able to meet from operating cash flow.  The Company
continues to evaluate alternative actions to repay or refinance some or all of
its long-term debt obligations.

Actual cash disbursements for interest were $55,028, $49,413, and $48,326 in
1995, 1994, and 1993, respectively.

At December 31, 1995, the Company had unamortized deferred debt issuance costs
of $8,319 included in other assets which are being amortized as part of
interest expense over the lives of the related debt issues.  Amortization
included in interest expense was $2,053, $2,199, and $1,786, in 1995, 1994, and
1993, respectively.

NOTE 14--Fair Value of Financial Instruments

The following methods and assumptions were used to estimate the fair value of
each class of financial instruments for which it is practicable to estimate
that value:

  Cash and cash equivalents--The carrying amount approximates fair value
  because of the short maturities of such instruments.

  Other assets--The fair values for financial instruments included in other
  assets were estimated based on quoted market prices for the same or similar
  issues.

  Long-term debt (See Note 13)--The interest rate on the Company's bank debt
  is reset every quarter to reflect current market rates.  Consequently, the
  carrying value of the bank debt approximates fair value.  The fair values of
  the long-term debt other than bank debt were estimated based on quoted
  market prices for the same or similar issues.

  Convertible exchangeable preferred stock (See Note 10)--The fair value of
  the preferred stock, which was issued in a private placement, is included
  in the following table at carrying value as such stock is not traded in the 
  open market and a market price is not readily available.

  Foreign exchange contracts (See Note 1)--The fair value associated with the
  foreign currency contracts has been estimated by valuing the net position of
  the contracts using applicable spot rates and thirty day forward rates as of
  the end of the fiscal year.

  Interest rate swap agreements (See Note 13)--The fair value of interest rate
  swaps (used for hedging purposes) is the estimated amount that the Company
  would pay to terminate the swap agreements at the reporting date, taking
  into account current interest rates and the present creditworthiness of the
  swap counterparties.  The Company does not expect to cancel these
  agreements, and expects them to expire as originally contracted.

The estimated fair values of the Company's financial instruments are as
follows:

                                 December 31,                  December 25,
                                   1995                            1994 
                              Carrying      Fair        Carrying       Fair
                               Amount       Value        Amount        Value   

  Cash and cash equivalents   $ 41,562    $41,562      $ 39,708     $ 39,708
  Other assets                   6,000      5,490         6,000        5,220
  Long-term debt*              436,145    425,898       433,521      418,440
  Convertible exchangeable 
   preferred stock              39,155     39,155        39,155       39,155
  Foreign currency contract 
   assets                           --       (64)            --          (43)
  Interest rate swap liabilities    --      3,561           932        1,838

* Includes current maturities and excludes capitalized long-term leases

NOTE 15--Environmental Matters

In connection with the reorganization of the old Interlake, Inc. (now Acme
Steel Company ("Acme")) in 1986, the Company, then newly-formed, indemnified
Acme against certain environmental liabilities relating to properties which had
been shut down or disposed of by Acme's iron and steel division prior to the
1986 reorganization.  The Company recorded a charge of $6,000 in 1991 and a
charge of $4,750 in 1993 for anticipated liabilities for environmental matters
relating to nonoperating sites.  As of December 31, 1995, the Company's
reserves for environmental liabilities totalled $4,700.

Based on its current estimate of its potential environmental liabilities,
including all contingent liabilities, individually and in the aggregate,
asserted and unasserted, the Company believes that the costs of environmental
matters have been fully provided for or are unlikely to have a material adverse
effect on the Company's business, future results of operations, liquidity or
consolidated financial condition. In arriving at its current estimate of its
potential environmental liabilities, the Company has relied upon the estimates
and analysis of its environmental consultants and legal advisors, as well as
its own evaluation, and has considered:  the probable scope and cost of
investigations and remediations for which the Company expects to have
liability; the likelihood of the Company being found liable for the claims
asserted or threatened against it; and the risk of other responsible parties
not being able to meet their obligations with respect to clean-ups.  In
estimating its potential environmental liabilities, the Company has not taken
into consideration any potential recoveries from insurance companies, although
in May 1994 the Company instituted an action seeking a declaratory judgment
against and recoveries from insurers under policies covering nearly 30 years. 
The parties are in discovery and trial is tentatively set for March 1997.  The
Company's estimate has not been discounted to reflect the time-value of money,
although a significant delay in implementation of certain of the remedies
thought to be probable could result in cost estimates increasing due to
inflation.

The Company's current estimates of its potential environmental liabilities are
subject to considerable uncertainty due to the continuing uncertainty
surrounding one of the sites for which the Company is responsible pursuant to
its indemnity of Acme -- namely, the Superfund site on the St. Louis River in
Duluth, Minnesota (the "Duluth Site").  These uncertainties relate to both the
clean-up of certain contaminated soils at the site, as well as the remediation
of certain underwater sediments.  In the light of these uncertainties, the
Company's estimates could be subject to change in the future.

With respect to the contaminated soils, the Minnesota Pollution Control Agency
("MPCA") on September 27, 1995, issued a Record of Decision selecting a remedy
consistent with the anticipated industrial development of the site.  The
Company's consultants have estimated the cost of implementing the portions of
the selected remedy for which the Company is responsible to be between $3,000
and $5,000.  The Company expects the soils remediation to be substantially
completed by the end of 1996.

With respect to the underwater sediments, the MPCA has requested the Company to
undertake an investigation and to evaluate remedial alternatives.  The MPCA and
the Company have substantially agreed on the initial scope of the sediments
investigation, and the Company's consultants commenced the investigation in
February 1996.  The Company believes that any estimate of the potential costs
of remediating the underwater sediments will not be meaningful until the
investigation is completed and possible remedial alternatives are reviewed by
the Company and the MPCA.  The Company also believes that the range of
reasonable remedial alternatives for the underwater sediments includes that of
taking no action, thereby avoiding the disruption of the natural remediation of
the underwater sediments which has been under way for over 30 years.  Thus, the
Company believes the minimum of the range of costs of remedial alternatives to
be zero, and to date has made provision for only the investigation, and not for
the clean-up, of underwater sediments.  Were a clean-up determined to be
appropriate after investigation, the range of costs would likely be dependent
in part upon whether the remedy selected called for treating contamination in
place, which might cost several millions of dollars, or provided for removal
and treatment of contaminated sediments, which could cost tens of millions of
dollars.

In March 1994, the citizens' board of the MPCA, contrary to the recommendation
of the MPCA professional staff, named only the Company as a responsible party
with respect to the underwater sediments at the Duluth Site.  The MPCA staff
had recommended that the successors to certain coal tar processors at the site
(the "tar companies") also be named as responsible parties.  The Company
believes that the tar companies are the cause of a significant portion of the
underwater contamination of the site.   In November 1995, the MPCA staff again
recommended the naming of the tar companies as responsible parties for the
underwater sediments.  The matter is scheduled for rehearing by the citizens'
board in March 1996.

The Company's current expectation is that cash outlays related to its
outstanding reserves for environmental matters will be made over the period of
1996 and 1997.  If the Company ultimately determines that additional charges
beyond its present reserves are necessary in connection with the Duluth Site,
the Company believes it is likely that cash outlays would occur near the end of
the decade, or later.

NOTE 16--Commitments and Contingencies

The Company is engaged in certain routine litigation arising in the ordinary
course of business.  Based upon its evaluation of available information,
management does not believe that any such matters are likely, individually or
in the aggregate, to have a material adverse effect upon the Company's business
future, results of operations, liquidity or consolidated financial condition.

On July 9, 1990, the City of Toledo, Ohio (the "City"), brought an action in
federal district court (the "Court") in Toledo against the Company, Acme Steel
Company ("Acme" or the "old Interlake" and, together with the Company, the
"Interlake defendants"), Beazer Materials and Services, Inc. succeeded by
Beazer East, Inc. ("Beazer") and Toledo Coke Corporation ("Toledo Coke") in
connection with the alleged contamination of a 1.7 acre parcel of land the City
had purchased from Toledo Coke for purposes of widening a road.  The City
alleged various claims under the Resource Conservation Recovery Act ("RCRA")
and the Comprehensive Environmental Response, Compensation and Liability Act
("CERCLA"), and under common law.  The Company's alleged liability arises from
its indemnification obligations with respect to Acme, which as the old
Interlake operated coke ovens and by-product recovery facilities on the site
from 1930 through 1978.  In 1978 the old Interlake sold the coke plant to
Koppers Company, Inc., which was later acquired by Beazer, and which agreed to
indemnify the Interlake defendants against environmental liabilities.  Koppers,
in turn, sold the facility to Toledo Coke.  The Interlake defendants cross-
claimed against Beazer under its indemnity.  In June 1995, the Court denied the
City's motion for an injunction under RCRA compelling the defendants to clean
up the Toledo Coke site.  The City is appealing the Court's ruling.  In January
1996, the Court ruled that the Interlake defendants were liable under CERCLA
for costs of investigation incurred by the City, and for future costs of
remediation to the extent they are consistent with the National Contingency
Plan under Superfund.  The City represents its costs of investigation to have
been approximately $400 and the costs of future remediation to be between
$4,000 and $10,000.  In between the RCRA and the CERCLA rulings, the Court, in
November 1995 granted the Interlake defendants' motion for summary judgment
seeking indemnification by Beazer for the liabilities alleged by the City.  The
Company expects Beazer to appeal the indemnification ruling.

On March 10, 1995, SC Holdings, Inc., a subsidiary of Waste Management
International Plc ("SC Holdings"), filed a complaint in federal district court
in Trenton, New Jersey, against Hoeganaes Corporation, an Interlake subsidiary,
and numerous other defendants, seeking to recover amounts expended or to be
expended in the remediation of the Cinnaminson Groundwater Contamination Site
in Burlington County, New Jersey.  SC Holdings claims to have spent
approximately $10,000 in investigation and remediation, and purportedly
estimates the total costs of investigation and remediation to be approximately
$60,000.  The site is a broadly-defined Superfund site which encompasses a
landfill formerly operated by SC Holdings and may also include the groundwater
under Hoeganaes' Riverton, New Jersey, facility.  Hoeganaes may have shipped
certain materials to the landfill.  SC Holdings alleges that Hoeganaes has
liability as both an owner/operator and a generator.  In November 1995, the
named defendants filed a complaint against numerous third-party defendants,
bringing the total number of defendants in the matter to approximately 100. 
The matter is in the preliminary stage of discovery.  The Company believes it
has meritorious defenses to both of the alleged bases of liability.

NOTE 17--Quarterly Results (Unaudited)

Quarterly results of operations for 1995 and 1994 were as follows:
(in millions except per share data)
<TABLE>
<CAPTION>
                                                   1st       2nd      3rd       4th
                                                 Quarter   Quarter   Quarter   Quarter
  1995
  <S>                                            <C>       <C>       <C>       <C>
   Net sales
     Engineered Materials                        $ 64.8    $ 62.5    $ 60.5    $ 60.6
     Handling/Packaging Systems                   142.1     143.9     149.7     147.0
                                                  206.9     206.4     210.2     207.6

   Gross Profit                                    50.9      49.3      47.6      48.9

   Operating profit
     Engineered Materials                          10.8      10.4       9.8       8.4
     Handling/Packaging Systems                     8.2       7.6       6.9      11.5
     Corporate Items                                (.3)      (.7)      (.5)      (.5)
   
   Operating profit                                18.7      17.3      16.2      19.4

   Income before accounting change and
     extraordinary item                              .4        .7        .3       2.8
   Net income (loss)                                 .4      (2.7)       .3       2.8
   Income before accounting change and
     extraordinary item per common share            .02       .03       .01       .12
   Net income (loss) per common share               .02      (.12)      .01       .12


  1994
   Net sales
     Engineered Materials                        $ 48.2    $ 54.4    $ 54.2    $ 59.6
     Handling/Packaging Systems                   121.1     127.7     139.5     147.9
                                                  169.3     182.1     193.7     207.5

   Gross Profit                                    39.5      43.4      42.9      49.9

   Operating profit
     Engineered Materials                           7.8       8.1       6.8       9.6
     Handling/Packaging Systems                     5.5       5.8       7.9       8.9
     Corporate Items                               (1.3)      (.3)      (.3)      (.1)
   Operating profit before goodwill write-down     12.0      13.6      14.4      18.4
   Goodwill write-down                               --        --        --     (34.2)
   Operating profit                                12.0      13.6      14.4     (15.8)

   Income (loss) before accounting change          (2.4)     (2.4)     (1.9)    (33.9)
   Net income (loss)                               (2.6)     (2.4)     (1.9)    (33.9)
   Income (loss) before accounting change
     per common share                              (.11)     (.11)     (.08)    (1.54)
   Net income (loss) per common share              (.12)     (.11)     (.08)    (1.54)
</TABLE>
In the second quarter of 1995, an extraordinary loss of $3.4 (net of tax) was
recorded to reflect the write-off of deferred debt issuance costs (see Note 5).

In the  fourth quarter 1994, the Company revised its accounting policy for
valuing its long-lived assets to include the cost of capital in estimating the
total projected future cash flows from its business units.  The Company
determined that in the case of certain businesses, the projected cash flows on
a discounted basis were insufficient to recover the carrying value of the
assets.  As a result, certain goodwill assets totalling $34.2 were written off
(see Note 2).

Nonoperating (income) and expense consists of items which are not related to
activities that constitute the Company's ongoing  operations.  Nonoperating
income was recorded in the first quarter of 1994 in the amount of $1.1 related
to a one-time gain from settlement of a real-estate matter with a local
transportation authority.

Benefits to pretax income due to reductions in LIFO inventories were $.8 and
$.6 in the first quarter of 1995 and 1994, respectively, and $.4 in the fourth
quarter of 1994.



Selected Financial Data
(in thousands except per share data)
<TABLE>
<CAPTION>
                                               1995         1994         1993            1992             1991    
For the Year
<S>                                           <C>         <C>          <C>              <C>              <C>
Net sales                                     $831,103    $752,592     $681,330         $708,199         $714,742
Income (loss) before extraordinary
 loss and accounting change                   $  4,213    $(40,557)<F1>$(25,962)<F2><F3>$(13,990)<F2>    $(13,744)<F2><F3>
                                                     
Net income (loss)                             $    765<F4>$(40,751)<F1>$(25,962)<F2><F3>$(27,698)<F2><F4>$(13,744)<F2><F3>

Income (loss) before extraordinary
 loss and accounting change
 per common share                             $    .18    $  (1.84)<F1>$  (1.18)<F2><F3>$   (.84)<F2>    $  (1.31)<F2><F3>

Net income (loss) per common share            $    .03    $  (1.85)<F1>$  (1.18)<F2><F3>$  (1.67)<F2><F4>$  (1.31)<F2><F3>

Average number of shares outstanding:
 Primary                                        22,691      22,027       22,027           16,574           10,484
 Fully Diluted                                  30,520         N/A          N/A              N/A              N/A

At Year End

Working capital
 --cash and cash equivalents                   $41,562    $ 39,708     $ 31,934         $ 38,640         $ 10,541
 --other working capital                        58,209      27,911       41,935           54,149           50,806
 --total working capital                        99,771      67,619       73,869           92,789           61,347
 --current ratio                               1.6 to 1    1.4 to 1    1.5 to 1          1.6 to 1         1.4 to 1

Total assets                                  $459,802    $444,953     $464,160         $511,292         $478,067

Long-term debt, including current maturities   443,615     442,451      443,135          450,801          471,441

Convertible Exchangeable Preferred Stock        39,155      39,155       39,155           39,155               --

Common shareholders' equity (deficit)         (291,677)   (296,435)    (259,767)        (232,718)        (239,465)

<FN>
 <F1>includes a charge for goodwill write-down of $34,174 (see Note 2)

 <F2>includes restructuring charges of $5,611, $2,523, and $3,344, in 1993,
     1992, and 1991 (see Note 3 )

 <F3>includes nonoperating charges for environmental matters of $4,750  in 1993
     and $6,000 in 1991 (see Note 15)

 <F4>includes extraordinary loss on early extinguishment of debt of $3,448 in
     1995 (see Note 5) and $7,567 in 1992 and cumulative effect of changes in
     accounting principles of $6,141 in 1992
 </TABLE>


1995 was a 53-week year while all other periods were 52-week years

Market for Interlake's Common Equity and Related Stockholder Matters

The principal market for Interlake's common stock is the New York Stock
Exchange (ticker symbol IK).  The common stock is also listed on the Chicago
Stock Exchange and is admitted to unlisted trading on the Pacific Stock
Exchange and the Boston Stock Exchange.

Interlake has not paid a dividend or made a distribution with respect to its
common stock since the third quarter of 1989.  Restrictions under Interlake's
bank credit agreement and the indentures relating to its Senior Subordinated
Debentures and Senior Notes (see Note 13) will prevent it from paying any cash
dividends in 1996 or in the foreseeable future.

On December 31, 1995, there were approximately 6,987 holders of record of
Interlake's common stock.

High and low prices of Interlake's common stock as reported on the NYSE
composite ticker tape during each of the eight calendar quarters during the
period ending on December 31, 1995 were:

                                    1995                1994      
                                   Price                 Price         
                                 High  Low            High  Low
 Calendar Quarter Ended
 March 31                      $2 3/8  $1 3/4       $3 7/8 $2 5/8
 June 30                        3 1/4   2 1/4        3 1/4  2 1/8
 September 30                   3 1/4   2 1/8        2 5/8  1 7/8
 December 31                    2 1/2   1 5/8        2 3/8  1 1/2