Exhibt 13

MARKET FOR THE COMPANY'S COMMON EQUITY AND RELATED STOCKHOLDER  MATTERS

Principal Market

The  Company's  Common  Stock,  par  value  $.01 per  share,  is  traded  on the
NASDAQ/National Market System under the symbol "MAVK."

Stock Price and Dividend Information

The high and low closing  sales prices on the  NASDAQ/National  Market System of
the Company's Common Stock during the first,  second,  third and fourth quarters
of fiscal 1996 and fiscal 1995, respectively, were as follows:
<TABLE>
<CAPTION>
                                              Fiscal 1996              Fiscal 1995
         Quarter                              High     Low             High       Low
         <S>                                <C>      <C>              <C>        <C>

         First                               8 1/8    6 1/8           10 3/4     7 3/4
         Second                             12 1/4    7 3/8            9 3/8     7 1/4
         Third                              13 1/2   11 1/8           10 3/8     7 5/8
         Fourth                             14 5/8   10 1/2            8 5/8     7 1/8
</TABLE>

The Company has not  declared or paid cash  dividends  on its Common Stock since
its  incorporation.  The Company currently intends to retain earnings to finance
the growth and development of its business and does not anticipated  paying cash
dividends in the near future.  Any payment of cash  dividends in the future will
depend upon the financial  condition,  capital  requirements and earnings of the
Company as well as other factors the Board of Directors may deem  relevant.  The
Company's loan agreement with commercial lenders restricts the Company's ability
to pay dividends to its stockholders.

Approximate Number of Holders of Common Stock

There were 125 holders of record of the  Company's  Common Stock as of September
30, 1996.



                        Historical Financial Information

The selected financial data presented below have been derived from the Company's
consolidated  financial  statements.  The financial  statements of September 30,
1996  and  1995,  and for  each of the  years  in the  three-year  period  ended
September 30, 1996 have been audited by Ernst & Young LLP, independent auditors,
and their report thereon is included  elsewhere herein. The selected data should
be read in conjunction with the Company's  consolidated financial statements and
the notes thereto appearing elsewhere in this report.
<TABLE>
<CAPTION>

                                                              Year Ended September 30,
                                     1996 (1)(2)       1995(1)         1994             1993              1992
                                                     (in thousands, except share data)
<S>                                 <C>            <C>              <C>               <C>            <C>    

Statement of Operations Data:
Net sales                            $204,182       $167,896         $124,843          $133,729        $98,941
Cost of goods sold                    182,042        159,865          117,833           121,596         92,342
Gross profit                           22,140          8,031            7,010            12,133          6,599
Selling, general and administrative    10,198          7,728            4,896             6,059          4,783
Structural start-up costs                  --            245              392                --             --
Relocation and restructuring costs         --             --               --               744          5,074

Income (loss) from operations          11,942             58            1,722             5,330         (3,258)
Interest (expense)                     (2,522)        (3,164)          (1,125)             (861)          (749)
Other income                               --            772               --                --             --

Income (loss) before income taxes       9,420         (2,334)             597             4,469         (4,007)
Provision (credit) for income taxes     1,882             --              168               894         (1,302)

Net income (loss)                      $7,538        ($2,334)            $429            $3,575         (2,705)

Net income (loss) per common and
   common equivalent share              $1.01         ($0.31)            $.07              $.58          ($.47)

Weighted average common and
   common equivalent 
   shares outstanding               7,500,406      7,460,137        6,422,411         6,177,997      5,711,055

Other Data:
Depreciation and amortization           5,201          4,691            3,395             3,055          2,970
Capital expenditures                    5,497          5,592           20,759            11,730          6,457

Balance Sheet Data:
(End of period)
Working capital                        32,652         30,272           23,111            20,960         22,397
Total assets                          125,556        106,494           99,434            78,124         71,494
Revolving credit facility              13,250         15,000            4,000             5,000             --
Current maturities of long-term 
   debt                                 1,843          2,795            1,880             1,216          1,508
Long-term debt (less 
   current maturities)                 11,901         18,045           19,640            11,670         13,506
Stockholders' equity                   57,247         49,503           51,837            42,693         39,118
<FN>

(1)   Includes  the  results  of  operation  of the  Company's  structural  tube
      facility which began operations in October, 1994.
(2)   Includes the one-time  effect of the change in accounting  practice  which
      resulted in a reduction  in net sales,  gross  profit,  net income and net
      income per common and common  equivalent share of $8,700,000,  $1,000,000,
      $839,000 and $0.11, respectively.
</FN>
</TABLE>


MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS 
OF OPERATIONS

OVERVIEW

The Company's  products consist of ERW Oil Country Tubular Goods (OCTG) and line
pipe which are sold primarily to distributors who supply end users in the energy
industry,  and  structural  tubing and standard pipe which are sold primarily to
distributors who supply end users in construction,  transportation,  agriculture
and other  industrial  uses.  Demand for the Company's  energy related  products
depends  primarily upon the number of oil and natural gas wells being drilled in
the United States and Canada,  the depth and drilling  conditions of these wells
and the number of well completions, which are in turn primarily dependent on oil
and natural gas prices. Domestic consumption of OCTG is supplied by domestic and
foreign  pipe  producers  and  draw  downs  of  existing   inventories  held  by
distributors and end users. Demand for the Company's industrial related products
depends on the general level of economic  activity in the United States and draw
downs of existing inventories.

According to published  reports  domestic  drilling,  the primary demand for the
Company's OCTG products, increased in fiscal 1996 by 2.8% from fiscal 1995. This
increase  in drilling  resulted  from a 13.7%  increase in gas related  drilling
which was partially offset by an 8.5% decrease in oil related  drilling.  Energy
prices improved by year end with oil up 11.2% and gas up 55.2%.  The increase in
gas prices positively affected gas drilling. However, the weakness of oil prices
early in the year and continued  concerns over  increased  Iraqi oil  production
caused oil related  drilling to decline.  At the end of the fiscal  year,  total
domestic drilling was at 822 rigs, up 8.9% from year ago levels. The consumption
of  OCTG  rose  faster  than  the  drilling  rates.  Management  estimates  that
consumption has increased by 11.1% due to several  factors  including the change
in mix toward more gas wells which are slightly more pipe  intensive,  increased
rig efficiency and higher completion rates.  Published information suggests that
demand for line pipe was down by an estimated 2%.

The Company and other domestic  producers of OCTG saw reduced  competition  from
imports and inventory draw downs during fiscal 1996. Import penetration declined
from 15.5% in 1995 to 11.1% in 1996  primarily  due to the  imposition of duties
resulting  from  trade  cases  successfully  brought  by the  Company  and other
producers and a strong  international  demand for OCTG. Industry inventory build
also  positively  impacted  demand,  as  increases in  inventories  created 4.6%
additional  demand as opposed  to  satisfying  2% of the demand in fiscal  1995.
Inventories remain at low levels in relation to current consumption rates.

As a result of increased drilling activity,  decreased  competition from imports
and inventories and increased  consumption  per rig,  management  estimates that
total domestic shipments of OCTG during fiscal 1996 rose by 30.1% as compared to
fiscal 1995.  Maverick's shipments of OCTG were up 23.5%. This was primarily due
to the impact of a one-time adjustment which resulted from implementing a change
in the Company's  policy for recording  revenue.  See Note 1 of the Notes to the
Consolidated Financial Statements as of September 30, 1996. Management estimates
that Maverick's market share remained relatively  consistent from fiscal 1995 to
1996.

Management estimates that the demand for the Company's structural tube (commonly
referred to as hollow structural  sections or HSS) products increased by 3.4% in
fiscal 1996 and total domestic  producer  shipments rose by 13.5%.  According to
published  reports,  the standard pipe market  demand  decreased by an estimated
6.0% and total domestic producer shipments rose by an estimated 1.3%.

Pricing of the  Company's  products was mixed during the year.  Pricing of OCTG,
due to increasing demand for higher value-added products,  rose by approximately
1%. Line,  standard and structural  pipe product  pricing fell by 4.7%, 5.6% and
9.1%,  respectively.  These prices  decreased  primarily  due to the lower steel
costs  experienced  during fiscal 1996. Steel costs had fallen late last year by
$60 per ton,  but had  begun to rise in March  through  July for a net  decrease
during the year of approximately $30 per ton.

As mentioned  above,  the replacement cost of steel had dropped during the year.
The Company's average steel cost of goods sold for energy products decreased $31
per ton or 8.6%  and $50 per ton or  13.9%  for  industrial  products  from  the
previous year. The lower costs were attributable to decreased inventory costs at
the beginning of the year and further lower  purchase costs during the first six
months of the year.  Replacement  cost of steel  increased by $30 per ton during
the last six months of the year. Based on year end inventory values and recently
announced increases effective January 1, 1997, the Company estimates steel costs
will rise by $24 per ton or 8% during 1997.  Four  manufacturers  of flat rolled
steel have  announced  6.5 million  tons of  capacity  additions  scheduled  for
start-up in fiscal 1997. The Company anticipates that these additions could have
the effect of lowering the Company's  purchase  price of hot rolled steel during
fiscal 1997.

In general, uncertainty continues to exist as to future levels and volatility of
oil and gas price  expectations  and their effect on drilling  levels and demand
for the Company's  energy related  products.  Uncertainty  also exists as to the
future impact on the Company of industry wide draw downs of OCTG  inventories as
well as future import levels.  Uncertainty exists as to the future demand levels
for HSS and other industrial related products. Finally, uncertainty exists as to
the price level of hot rolled steel, the Company's principal raw material.

RESULTS OF OPERATIONS The following table sets forth, for the periods presented,
certain  information  relating to the  operations of the Company  expressed as a
percentage of net sales:
<TABLE>
<CAPTION>

                                            Year Ended September 30,
                                    1996             1995              1994
<S>                                 <C>              <C>               <C>   
Net sales                           100.0%           100.0%            100.0%

Cost of goods sold                   89.2             95.2              94.4
                                     ----------------------------------------

Gross profit                         10.8              4.8               5.6

Selling, general and
   administrative                     5.0              4.6               3.9

Structural start-up costs              --               .2                .3
                                    ------------------------------------------

Income from operations                5.8               --               1.4

Other income                           --               .5                --

Interest expense, net                 1.2              1.9                .9
                                    ------------------------------------------

Income (loss) before
   income taxes                       4.6             (1.4)               .5

Provision for income taxes             .9               --                .2
                                    ------------------------------------------
  
Net income (loss)                     3.7             (1.4)               .3
                                    ==========================================
</TABLE>




Fiscal Year Ended September 30, 1996 compared to Fiscal Year Ended 
September 30, 1995

In fiscal 1996,  net sales  increased  $36.3 million or 21.6% from the preceding
fiscal year.  Energy  products  sales  increased  $19.3 million or 15.1%,  while
industrial  products sales increased $17.0 million or 42.8%.  These results were
attributable primarily to an increase of 24.9% in total product shipments,  from
276,376  tons in fiscal  1995 to  345,232  tons in  fiscal  1996.  OCTG  product
shipments  increased  38,074  tons or 23.4%.  During  fiscal 1996 an increase in
consumption  of OCTG  resulted  from the  average  rig count  rising by 67.  The
increased  rig count was only one of many  positive  factors  which  caused  the
increase in  Maverick's  OCTG product  shipments  and total sales.  In addition,
decreased  import  activity  and  a  build  in  existing   inventories  held  by
distributors  also  positively  affected  shipments of OCTG.  Also export sales,
primarily to Canada,  increased by 10% from 20,000 tons in fiscal 1995 to 22,000
tons in fiscal  1996 as Canadian  drilling  rose by 14.2%.  Line pipe  shipments
decreased  by 27.4%  due to lack of  capacity  at  Maverick  and  limited  steel
availability.  Industrial  products shipments  increased 58% from 72,600 tons in
fiscal 1995 to 114,728  tons in fiscal 1996 as the Company  continues  to gain a
foothold in the market.  Total sales and total shipments were further positively
impacted by Maverick's strengthening position in the industrial products market.
Average selling prices  decreased during fiscal 1996 by 2.7% (from an average of
$607 to $591 per ton). This reduction offset some of the volume-driven  increase
in total sales.  The average  selling  price for energy was $640, an increase of
$11 per ton.  The  increase  was  principally  due to  improved  sales of higher
value-added products. The average selling price of industrial products was $494,
a decrease  of $52 per ton.  The  decrease in the  average  industrial  products
selling  price was due to  corresponding  reduced  steel costs during the fiscal
year.

Cost of goods sold  increased  $22.2 million or 13.9% in fiscal 1996 as compared
to fiscal 1995.  Energy cost of goods sold  increased  $7.8 million or 6.4%, and
industrial  products cost of goods sold  increased  $14.4 million or 37.8%.  The
increase  in cost of goods  sold was due  primarily  to the  increased  level of
shipments  offset by an  approximate  10%  decrease  in steel cost of goods sold
compared to fiscal 1995.

Gross  profit  increased  $14.1  million or 175.7% in fiscal 1996 as compared to
fiscal 1995.  Gross profit for energy increased  approximately  $11.5 million or
203.5%, while industrial products gross profit increased $2.6 million or 210.1%.
Gross profit as a percentage  of net sales was 10.8% for fiscal 1996 as compared
to 4.8% for fiscal 1995. Energy gross profit percentage was 11.6% and industrial
products  gross profit margin was 8.9%.  The improved  gross profit  percentages
were mainly attributable to lower steel costs during fiscal 1996.

Selling,  general and administrative  expenses increased $2.5 million,  or 32.0%
from fiscal 1995 to fiscal  1996.  These  expenses  increased  principally  as a
result of increased employee incentive compensation, salary increases, increased
selling  expenses  related to higher  sales  volumes  and the  increase in sales
commissions on industrial products. Selling, general and administrative expenses
as a percentage of net sales increased from 4.6% in 1995 to 5% in fiscal 1996.

Interest  expense  decreased  $642,000  or 20.3%,  in fiscal 1996 as compared to
fiscal 1995 as a result of decreased  borrowings.  The decreased borrowings were
principally the result of the net income and cash flow generated during 1996.

The provision for income taxes  increased  $1,882,000 in fiscal 1996 as compared
to fiscal 1995 as a result of the Company  generating income before income taxes
in fiscal 1996,  as compared to a loss before  income taxes in fiscal 1995.  The
Company continues to maintain a conservative valuation allowance of $1.1 million
on a gross  tax asset of $6  million.  As  permitted  under  the  provisions  of
Statement of  Financial  Accounting  Standards  (SFAS) No. 109  "Accounting  for
Income Taxes," realization of the Company's deferred tax assets was dependent on
utilizing tax planning strategies or generating  sufficient taxable income prior
to expiration of the net operating loss carryforwards.  Management evaluates, on
a continuing  basis,  the  realizability of the deferred tax assets and the need
for an offsetting valuation allowance.

At  September  30,  1996,   the  Company  had   available  net  operating   loss
carryforwards  of $6.4 million which it may use to offset future taxable income,
of which $2.9 million is available in 1997. In addition,  at September 30, 1996,
the Company had  alternative  minimum tax credit  carryforwards  of $2.0 million
available for income tax purposes.  See Note 7 of the Notes to the  Consolidated
Financial Statements as of September 30, 1996.

As a result of the foregoing  factors,  net income increased $9.9 million from a
net loss of $2.3 million or $0.31 per share in fiscal 1995 to net income of $7.5
million or $1.01 per share in fiscal 1996.

Fiscal Year Ended September 30, 1995 compared to Fiscal Year Ended 
September 30, 1994

In fiscal  1995,  net  sales  increased  $43.1  million  or 34.5%  from the
preceding  fiscal year. The increase in total sales and total  shipments was due
primarily  to  Maverick's  entry  into the HSS market in  October  1994.  Energy
products sales  increased $3.4 million or 2.7%.  Industrial  products sales were
$39.7 million. This increase was attributable  primarily to an increase of 28.8%
in total product shipments,  from 214,652 tons in fiscal 1994 to 276,376 tons in
fiscal 1995. OCTG product  shipments  increased 6,999 tons or 4.3%. The increase
in sales of OCTG  resulted  from an  increased  market  share  for the  Company,
decreased  competition from imports resulting primarily from the trade cases and
reduced  inventory  draw-downs.  These  positive  market  factors were offset by
reduced domestic consumption as the average rig count fell by 46 rigs during the
year.  Export sales,  primarily to Canada,  decreased  28.6% from 28,000 tons in
fiscal 1994 to 20,000 tons in fiscal 1995 as Canadian drilling fell by 11%. Line
pipe shipments  decreased  9,374 tons or 18.4% due to reduced  demand  resulting
from drilling reductions. Industrial products shipments which consist of HSS and
standard pipe (which  increased 10,696 tons or 125.8% from fiscal 1994 to fiscal
1995)  accounted for 72,600 tons in fiscal 1995.  The average  selling price for
energy products was $629, up 8% as compared to the previous  fiscal year,  while
the average  selling price of industrial  products was $546. The increase in the
average  energy  selling  price was  principally  due to improved mix and higher
demand for domestic products.

Cost of goods sold  increased  $42.0 million or 35.7% in fiscal 1995 as compared
to fiscal 1994.  Energy cost of goods sold  increased  $3.5 million or 3.0%, and
industrial products cost of goods sold was $38.5 million. The increase in energy
cost of goods sold was due primarily to the increased  level of shipments and an
approximate 5% increase in delivered steel costs compared to fiscal 1994.

Gross  profit  increased  $1.0  million or 14.6%,  in fiscal 1995 as compared to
fiscal 1994. Gross profit for energy products decreased  approximately  $100,000
or 1.5%,  while  industrial  products  contributed  $1.1  million.  Gross profit
percentage was 4.8% for fiscal 1995 as compared to 5.6% for fiscal 1994.  Energy
gross profit  percentage  was 5.4% and  industrial  products gross profit margin
percentage  was 2.8%.  Gross  profit  percentage  for  industrial  products  was
negatively  impacted by a $1.2  million  charge to earnings for  write-downs  of
inventory  resulting  from a reduction in the  replacement  costs of flat rolled
steel which occurred in the fourth  quarter.  Excluding this charge to earnings,
industrial products gross profit margin percentage would have been 5.9%

Selling, general and administrative expenses increased by $2.8 million or 57.8%,
from  fiscal  1994 to fiscal  1995.  Industrial  products  incremental  selling,
general and  administrative  costs  accounted  for $1.9  million or 68.0% of the
increase.  Selling,  general and administrative  expenses as a percentage of net
sales increased from 3.9% in fiscal 1994 to 4.6% in fiscal 1995.

Operating  income for fiscal 1995 was also negatively  impacted by the effect of
additional  start-up costs at the structural tube facility of $245,000  recorded
in the first fiscal quarter which were comprised primarily of salary and related
costs  for the  structural  production  and  sales  force.  The  facility  began
production in late October 1994.

Interest expense increased $2.0 million or 181.2%, in fiscal 1995 as compared to
fiscal 1994 as a result of increased  borrowings and increased  interest  rates.
The increased  borrowings were  principally the results of increased  industrial
products  inventory  levels  throughout the year that were financed  through the
Company's  Revolving  Credit  Facility.  The  increase in other  borrowings  was
primarily  to finance the  construction  of the  structural  tube  facility  and
accounted for $1.5 million of the increased  interest  expense  incurred  during
fiscal 1995.

Other income was $772,000 in fiscal 1995 as a result of  $1,000,000 of insurance
proceeds   which  were  received   during  the  quarter  ended  June  30,  1995.
Approximately  $800,000 of these  proceeds were for losses  experienced in prior
fiscal years and this amount has been  recorded in other  income.  The remaining
$200,000 of such  recovery  has been  recorded  as a reduction  in cost of goods
sold.

Although the Company  incurred a $2.3 million pre-tax loss, no credit  provision
for  income  taxes was  recorded  in  fiscal  1995.  The  Company  maintained  a
conservative  valuation  allowance  of $2.7 million on a gross tax asset of $7.2
million and elected not to value any further future taxable income. As permitted
under the provisions of Statement of Financial  Accounting  Standards (SFAS) No.
109  "Accounting  for Income  Taxes,"  realization of a portion of the Company's
deferred tax asset was based on expected  future  taxable  income.  The level of
estimated  future  taxable  income  was  based on  historical  levels  of income
generated from ordinary and recurring operations

As a result of the  foregoing  factors,  net income  decreased  from $429,000 in
fiscal  1994 to a net loss of $2.3  million in fiscal 1995 or $0.31 net loss per
share.  This net loss included $245,000 in start-up costs, a $1.2 million charge
to earnings for write-downs of industrial  products  inventory,  and $800,000 of
insurance  proceeds related to inventory losses.  Excluding these unusual items,
the net loss would have been $1.7 million.

LIQUIDITY AND CAPITAL  RESOURCESWorking  capital at September 30, 1996 was $32.7
million and the ratio of current assets to current  liabilities  was 1.8 to 1 as
compared to September  30, 1995 when  working  capital was $30.3 and the current
ratio was 2.3 to 1. The increase in working  capital was principally due to a $2
million  increase in the deferred income tax asset and a $17.4 million  increase
in inventory,  (which includes  approximately $7.2 million in customer-obligated
inventory)  which was  partially  offset by a $5.6 million  increase in accounts
payable, a $3.7 million increase in accrued expenses and a $8.2 million increase
in deferred  revenue.  The increase in the current  deferred income tax asset is
due to the expectation that the net operating loss  carryforwards  and a portion
of the alternative  minimum tax credit  carryforwards will be utilized in fiscal
1997.  The  increase  in accounts  payable  and  accrued  expenses is due to the
increased  volume of business  and the accrual of  incentive  compensation.  The
increase in deferred revenue is due to the  aforementioned  change in accounting
practice.  The  increase  in  inventory  is  partially  due to  this  change  in
accounting  practice and also to the increased volume of energy  business.  Cash
provided by operating  activities for fiscal 1996 was $14.2 million. The primary
source  of cash was net  income,  exclusive  of the  impact  of  non-cash  items
(primarily depreciation and amortization), of $13.7 million.

During fiscal 1995 and 1994,  net cash provided  (used) by operations was ($6.3)
million and $2.5 million,  respectively.  In fiscal 1995,  the Revolving  Credit
Facility was used to fund operations and capital  expenditures.  In fiscal 1994,
the net  cash  provided  by  operations  was  primarily  used  to  fund  capital
expenditures.

Cash  used in  investing  activities  in  fiscal  1996,  1995  and 1994 was $5.5
million,  $5.6 million and $20.9 million,  respectively.  This use was primarily
for purchases of property,  plant,  and equipment of $5.5 million,  $5.6 million
(of which $3.9  million was spent on the  structural  tube  facility)  and $20.8
million during fiscal 1996, 1995 and 1994, respectively.

During fiscal 1996, 1995 and 1994, cash provided (used) by financing  activities
was ($8.6), $11.5 and $15.2 million. Cash used by financing activities in fiscal
1996 is primarily attributable to the pay-off of the $5.5 million term note, the
proceeds  of which were used to finance the  structural  tube  facility,  a $1.8
million net  decrease  in the  Company's  Revolving  Credit  Facility  and other
regularly  scheduled  term  debt  payments.   The  cash  provided  by  financing
activities  in  fiscal  1995 was  primarily  attributed  to an $11  million  net
increase  in the  Company's  Revolving  Credit  Facility.  The cash  provided by
financing  activities in fiscal 1994 was primarily  attributable to $8.7 million
in net proceeds received from the sale of 1.3 million shares of common stock and
the $6.5 million  increase in borrowings  under two new  financing  arrangements
incurred primarily in connection with the new structural tube facility.

The Company's  capital budget for fiscal 1997 is $6.3 million which will be used
principally to acquire new equipment for its existing manufacturing  facilities.
Such funds are expected to be provided from cash flows from operations.

The Company  expects that it will meet its ongoing  working  capital and capital
requirements from a combination of cash flow from operations,  which constitutes
its primary source of liquidity,  and available  borrowings  under its Revolving
Credit Facility. The Revolving Credit Facility, as amended, provides for maximum
borrowings up to the lesser of the eligible borrowing base or $27.5 million, and
bears  interest at either the  prevailing  prime rate or an adjusted  Eurodollar
rate, plus an interest margin,  depending upon certain  financial  measurements.
The Revolving  Credit Facility is secured by the Company's  accounts  receivable
and  inventories  and will mature on May 31, 1998. As of September 30, 1996, the
applicable  interest rate was 6.93 percent per annum,  and the Company had $13.8
million  in unused  availability  under the  Revolving  Credit  Facility.  As of
September 30, 1996, the Company had $613,000 in cash.


FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
<TABLE>

                            Maverick Tube Corporation
                                 and Subsidiary
                           Consolidated Balance Sheets

<CAPTION>
                                                                                   September 30
                                                                           1996                   1995


                                                                       (In thousands, except share data)
<S>                                                                    <C>                  <C>    
Assets
Current assets:
         Cash and cash equivalents                                     $      613           $       491
         Accounts receivable, less allowances of $629
            and $306 in 1996 and 1995, respectively                        18,400                18,914
         Inventories                                                       50,624                33,272
         Deferred income taxes                                              2,679                   645
         Prepaid expenses and other current assets                            875                   896
                                                                        ---------              --------
Total current assets                                                       73,191                54,218

Property, plant and equipment                                              51,695                51,168
Other assets                                                                  670                 1,108
                                                                         --------              --------
                                                                         $125,556              $106,494
                                                                         ========              ========
Liabilities and Stockholders' Equity
Current liabilities:
         Accounts payable                                                 $23,042               $17,419
         Accrued expenses and other liabilities                             7,478                 3,732
         Deferred revenue                                                   8,176                    --
         Current maturities of long-term debt                               1,843                 2,795
                                                                        ---------              --------
Total current liabilities                                                  40,539                23,946

Long-term debt, less current maturities                                    11,901                18,045
Revolving credit facility                                                  13,250                15,000
Deferred income taxes                                                       2,619
--
Commitments and contingencies (Notes 4, 10 and 11)                             --                    --

Stockholders' Equity:
         Preferred stock, $.01 par value; 5,000,000
             authorized shares                                                 --                    --
         Common stock, $.01 par value; 20,000,000
            authorized shares; 7,472,071 and 7,440,229
            shares issued and outstanding in 1996 and 1995,
            respectively                                                       75                    74
         Additional paid-in capital                                        37,674                37,469
         Retained earnings                                                 19,498                11,960
                                                                          -------              --------
                                                                           57,247                49,503
                                                                          -------              --------
                                                                         $125,556              $106,494
                                                                          =======              ========
<FN>
See accompanying notes.
</FN>
</TABLE>
<TABLE>

                            Maverick Tube Corporation
                                 and Subsidiary

                      Consolidated Statements of Operations

<CAPTION>
                                                          Year ended September 30
                                                 1996              1995             1994
                                                 ---------------------------------------
                                                    (In thousands, except per share data)
              <S>                                <C>              <C>             <C>

              Net sales                          $204,182         $167,896        $124,843
              Cost of goods sold                  182,042          159,865         117,833
                                                  ----------------------------------------
              Gross profit                         22,140            8,031           7,010

              Selling, general and administrative  10,198            7,728           4,896
              Structural start-up costs                --              245             392
                                                  ----------------------------------------
              Income from operations               11,942               58           1,722

              Other income (expense):
               Interest (expense)                  (2,522)          (3,164)         (1,125)
               Other income                            --              772              --
                                                  ----------------------------------------
              Income (loss) before income taxes     9,420           (2,334)            597

              Provision for income taxes            1,882               --             168
                                                  -----------------------------------------
              Net income (loss)                  $  7,538         $ (2,334)       $    429
                                                  =========================================

              Net income (loss) per common and
                common equivalent share          $   1.01         $  (0.31)       $   0.07
                                                  ========================================
</TABLE>
<TABLE>

                                      Maverick Tube Corporation and Subsidiary

                                   Consolidated Statements of Stockholders' Equity
                                          (In thousands, except share data)

<CAPTION>
                                                                Common Stock
                                            ------------------------------------------------------
                                                                                   Additional
                                                                                     Paid-in     Retained Earnings
                                                  Shares            Amount           Capital
                                            ------------------------------------------------------------------------
<S>                                               <C>                <C>           <C>              <C>    

Balance at October 1, 1993                        6,140,229          $61           $28,767          $13,865
   Net income                                            --           --                --              429
   Sale of common stock                           1,300,000           13             8,702               --
                                            ------------------------------------------------------------------------
Balance at September 30, 1994                     7,440,229           74            37,469           14,294
   Net loss                                              --           --                --           (2,334)
                                            ------------------------------------------------------------------------
Balance at September 30, 1995                     7,440,229           74           37,469            11,960
   Net income                                            --           --               --             7,538
   Exercise of options                               31,842            1              205                --
                                            ------------------------------------------------------------------------
Balance at September 30, 1996                     7,472,071          $75          $37,674           $19,498
                                            ========================================================================
<FN>
See accompanying notes.
</FN>
</TABLE>
<TABLE>

                    Maverick Tube Corporation and Subsidiary
                      Consolidated Statements of Cash Flows

<CAPTION>
                                                                            Year ended September 30
                                                              -----------------------------------------------------
                                                                    1996             1995              1994
                                                              -----------------------------------------------------
                                                                               (in thousands)
<S>                                                              <C>              <C>            <C>   
Operating activities                                                              
Net income (loss)                                                $     7,538      $    (2,334)    $         429
Adjustments  to  reconcile  net  income  (loss) 
to net cash  provided  (used) by
   operating activities:
     Depreciation and amortization                                     5,201            4,691             3,395
     Deferred income taxes                                               585               --               159
     Provision for losses on accounts receivable                         339               53                44
     Gain on sale of equipment                                            (3)             (20)              (28)
     Changes in operating assets and liabilities:
       Accounts receivable                                               175           (6,945)             (898)
       Inventories                                                   (17,352)            (624)           (4,820)
       Income taxes refundable                                            --              117                68
       Prepaid expenses and other current assets                           5             (145)              110
       Other assets                                                      207             (168)             (477)
       Accounts payable                                                5,623           (1,313)            6,149
       Accrued expenses and other liabilities                          3,746              387              (973)
       Deferred revenue                                                8,176               --                --
       Accrued relocation and restructuring costs                         --               --              (644)
                                                              -----------------------------------------------------
Cash provided (used) by operating activities                          14,240           (6,301)            2,514
Investing activities
   Expenditures for property, plant and equipment                     (5,497)           (5,592)         (20,759)
   Proceeds from disposals of equipment                                    3                20               33
Notes issued                                                              --                --             (225)
Collection of notes receivable                                            15                18               15
                                                              ------------------------------------------------------
Cash used by investing activities                                     (5,479)           (5,554)         (20,936)
Financing activities
Proceeds from long-term borrowings and notes                          64,250            62,992           65,258
   Principal payments on long-term borrowings and notes
                                                                     (73,095)          (51,530)         (58,766)
                                                              ------------------------------------------------------
                                                                      (8,845)           11,462            6,492
Proceeds from exercise of stock options                                  206                --               --
Net proceeds from sale of common stock                                    --                --            8,715
                                                              ------------------------------------------------------
Cash provided (used) by financing activities                          (8,639)           11,462           15,207
                                                              ------------------------------------------------------
Increase (decrease) in cash and cash equivalents                         122              (393)          (3,215)
Cash and cash equivalents at beginning of year                           491               884            4,099
                                                              ======================================================
Cash and cash equivalents at end of year                         $       613       $       491      $       884
                                                              ======================================================
Supplemental  disclosures of cash flow information:  Cash paid (received) during
   the year for:
     Interest (net of amounts capitalized of $81, $142 and
       $475)                                                      $    2,677        $    2,949       $    1,115
     Income taxes                                                 $    1,370        $     (148)      $       99
<FN>
See accompanying notes.
</FN>
</TABLE>


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Summary of Significant Accounting Policies

Principles of Consolidation

The  consolidated  financial  statements  include the accounts of Maverick  Tube
Corporation  (the  Company) and its wholly  owned  subsidiary.  All  significant
intercompany accounts and transactions have been eliminated.

Revenue Recognition

The Company  records revenue from product sales when the product is shipped from
its  facilities.  Prior to January 1, 1996, the Company had recorded  revenue on
the sale of energy products to certain  customers at the time the goods were set
aside  for  storage  at the  customer's  request.  Included  in the  results  of
operations for the year ended  September 30, 1996 was a one-time  effect of this
change in practice which resulted in a reduction in net sales, gross profit, net
income and net income per  common  and common  equivalent  share of  $8,700,000,
$1,000,000, $839,000 and $0.11, respectively.

Inventories

Inventories are principally valued at the lower of average cost or market.

Property, Plant and Equipment

Property,  plant and equipment are stated on the basis of cost.  Depreciation is
computed  under the  straight-line  method over the  respective  assets'  useful
lives. Useful lives of the Company's assets are as follows:

           Land and leasehold improvements                10 to 20 years
           Buildings                                      20 to 40 years
           Transportation equipment                       4 to 5 years
           Machinery and equipment                        5 to 12 years
           Furniture and fixtures                         3 to 7 years

Income Taxes

Deferred taxes are provided on an asset and liability  method  whereby  deferred
tax assets are  recognized for deductible  temporary  differences  and operating
loss and other  tax  credit  carryforwards  and  deferred  tax  liabilities  are
recognized for taxable  temporary  differences.  Temporary  differences  are the
differences between the reported amounts of assets and liabilities and their tax
bases.

Use of Estimates

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

Net Income (Loss) per Common and Common Equivalent Share

Net income  (loss) per common and common  equivalent  share were computed on net
income  (loss) and the  weighted  average  number of shares of common  stock and
common stock equivalents  outstanding during each period  (7,500,406,  7,460,137
and  6,422,411  for  the  years  ended   September  30,  1996,  1995  and  1994,
respectively).

Business Segments

Effective late in October 1994, the Company commenced the production and sale of
structural tubing products. At that time the Company began reporting the results
of its operations on a segment basis. The two  identifiable  segments are energy
products,  consisting of Oil Country Tubular Goods (OCTG) and line pipe products
sold  primarily  to customers in the energy  industry and  industrial  products,
consisting  primarily of structural  tubing and standard pipe  products.  Energy
products  are  used  in the  completion  of  new  wells  and  the  handling  and
transporting  of the oil and natural gas produced  from these wells.  Industrial
products  are sold to customers in various  industries  including  construction,
agriculture and  transportation.  The Company's products are sold primarily to a
network of distributors and are sold throughout the United States and Canada.

Sales  commission  expenses  are  charged  directly to the  associated  business
segments.  Remaining selling,  general and administrative expenses are allocated
based upon the net sales dollars generated by each segment.

Cash Equivalents

The Company's  policy is to consider demand deposits and short-term  investments
with a maturity of three months or less when purchased as cash equivalents.

Financial Instruments

Financial instruments consist of cash and cash equivalents, accounts receivable,
accounts payable and long-term debt  obligations.  The carrying value of amounts
reported  in the  consolidated  balance  sheets  for cash and cash  equivalents,
accounts  receivable and accounts payable  approximate fair value.  Management's
estimate of the fair value of long-term debt  obligations is discussed in Note 4
to the consolidated financial statements.

2. Structural Start-Up Costs

During  1994,  the Company  constructed  a new  production  facility in Hickman,
Arkansas and entered the structural tube business. The Company incurred costs of
$245,000  and  $392,000  in  1995  and  1994,   respectively,   related  to  the
commencement  of  operations  of this  facility  which began  production in late
October 1994.  These costs are  comprised  primarily of salary and related costs
for the production and sales personnel prior to the fully  integrated  operation
of the facility.

3. Stock Offering

In July  1994,  the  Company  sold  1,300,000  shares of common  stock.  The net
proceeds to the Company of $8,715,000 (after public offering expenses) were used
to complete  the  construction  and acquire  and  install  equipment  of the new
structural  tube  production  facility  and  to  repay  indebtedness  under  the
Company's revolving credit facility.

4. Long-Term Debt and Revolving Credit Facility

Long-term  debt and  revolving  credit  facility at September  30, 1996 and 1995
consists of the following:
<TABLE>
<CAPTION>

                                                                             1996              1995
                                                                       ------------------------------------
                                                                                  (in thousands)
<S>                                                                       <C>            <C>
Term loan notes payable, secured by machinery and equipment (net       
   book value $22,500,000 at September 30, 1996); payable in monthly
   installments (including interest at 9.27%) of $130,920; final
   payment due on May 19, 1999.                                           $   3,699      $   4,868
                                                                        
Term loan notes payable,  secured by machinery and equipment;  
   interest  payable monthly at the London Interbank Offered Rate 
   plus 2.9%; balance paid September 4, 1996.                                     --         5,500

Capital lease  obligation,  secured by property,  plant and equipment  
   (net book value  $9,492,000  at September 30,  1996);  payable in 
   monthly  installments (including interest at 8.0%) of $59,479;
   final payment due on August 1, 2007.                                       5,185          5,472


Capital  lease  obligation,  secured  by  property  and plant  
   (net  book  value $8,705,000 at September 30, 1996); interest of 
   7.5% payable monthly;  payable in monthly  principal  installments 
   of $20,000 (plus interest)  commencing on March  1,  1996;  
   increasing  to  $31,250  in years  two  through  seven  and 
   increasing to $240,417 in year eight; final payment due on 
   February 1, 2004.                                                          4,860          5,000

Revolving credit notes, secured by all accounts receivable and 
   inventories;  due on May 31, 1998;  interest  payable monthly
   at either prime or the Eurodollar rate, plus an interest margin,
   depending upon certain financial measurements.                            13,250         15,000
                                                                       ------------------------------------
                                                                             26,994         35,840
Less current maturities                                                      (1,843)        (2,795)
                                                                       ------------------------------------
                                                                          $  25,151      $  33,045
                                                                       ====================================
</TABLE>

The term loan agreement  includes  restrictive  covenants  relating to levels of
stockholders' equity and other financial  measurements.  It also restricts asset
disposals,  capital expenditures,  capital restructurings and borrowings and may
preclude payment of dividends on common stock.

During 1994,  the State of Arkansas sold  $5,000,000  of industrial  development
bonds  to  finance  a  portion  of the  construction  cost  related  to the  new
structural tube production  facility.  In May 1994, the Company became obligated
by a lease under these bonds  through  February  2004, at which time the Company
has the option to purchase the facility for a nominal amount.

The  revolving  credit  agreement  provides  for  advances  up to the  lesser of
$27,500,000  or the eligible  borrowing  base. At September 30, 1996,  there was
$13,250,000  outstanding  under this line of credit at an interest  rate of 6.93
percent.  Additional  available  borrowings at that date were  $13,800,000.  The
agreement includes separate restrictive  covenants relating to levels of working
capital  and  other   financial   measurements.   It  also   restricts   capital
expenditures,   asset  disposals,  capital  restructurings  and  borrowings  and
currently  precludes  payment of dividends on common stock. The revolving credit
agreement  requires  an annual  commitment  fee  based  upon  certain  financial
measurements.

At  September  30,  1996,  the  Company  had  outstanding  letters of credit for
$450,000, expiring in September 1997.

Principal  maturities  of  long-term  debt  and  revolving  credit  facility  at
September 30, 1996, are as follows (in thousands):
<TABLE>
<CAPTION>
                  <S>                                                      <C>

                  1997                                                     $   1,843
                  1998                                                        15,260*
                  1999                                                         1,665
                  2000                                                           708
                  2001                                                           760
                  Thereafter                                                   6,758
                                                                        ----------------
                                                                           $  26,994
                                                                        ================
<FN>
*     Includes $13,250,000 revolving credit notes which mature on May 31, 1998.
</FN>
</TABLE>

Included in the above  principal  maturities  of  long-term  debt and  revolving
credit  facility is the present value of future minimum lease payments under the
capital lease obligations at September 30, 1996 as follows (in thousands):
<TABLE>
<CAPTION>

                                                                                       Present Value of
                                             Total Minimum                               Minimum Lease
                                            Lease Payments                                 Payments
                                                                     Interest
                                         ------------------------------------------------------------------
                                                                  (In thousands)
<S>                                              <C>                   <C>                   <C> 
1997                                              $1,320                 $758                  $562
1998                                               1,317                  712                   605
1999                                               1,313                  660                   653
2000                                               1,320                  612                   708
2001                                               1,315                  555                   760
Thereafter                                         8,099                1,342                 6,757
                                         ------------------------------------------------------------------
                                                 $14,684               $4,639               $10,045
                                         ==================================================================
</TABLE>

Property, plant and equipment at September 30, 1996 and 1995 include $19,864,000
and  $18,821,000,   respectively,  under  leases  that  have  been  capitalized.
Accumulated  depreciation  for these assets was  $1,666,000  and  $1,021,000  at
September 30, 1996 and 1995, respectively.

The fair  value of the  Company's  long-term  debt is based on  estimates  using
discounted cash flow analyses, based on quoted market prices for similar issues.
The  estimated  fair value of long-term  debt and revolving  credit  facility at
September 30, 1996 was $28,266,000.

5. Property, Plant and Equipment

Property,  plant and  equipment  at  September  30, 1996 and 1995 consist of the
following (in thousands):
<TABLE>
<CAPTION>

                                                                                 1996           1995
                                                                           --------------------------------
    <S>                                                                       <C>             <C>      

    Land                                                                      $   1,576       $   1,576
    Land and leasehold improvements                                                 700             676
    Buildings                                                                    22,138          21,068
    Transportation equipment                                                      1,209             948
    Machinery and equipment                                                      45,582          41,900
    Furniture and fixtures                                                        2,266           1,824
                                                                           --------------------------------
                                                                                 73,471          67,992
    Less accumulated depreciation                                               (21,776)        (16,824)
                                                                           --------------------------------
                                                                              $  51,695       $  51,168
                                                                           ================================
</TABLE>

6. Inventories

Inventories  at  September  30,  1996  and 1995  consist  of the  following  (in
thousands):
<TABLE>
<CAPTION>

                                                                                1996            1995
                                                                           --------------------------------
<S>                                                                           <C>            <C>

Finished goods                                                                $  28,323      $  16,457
Work-in-process                                                                   2,671          2,799
Raw materials                                                                    10,081          7,554
In-transit materials                                                              6,274          3,458
Storeroom parts                                                                   3,275          3,004
                                                                           --------------------------------
                                                                              $  50,624      $  33,272
                                                                           ================================
</TABLE>

Finished goods at September 30, 1996 includes  $7,200,000 of  customer-obligated
inventory.

7. Income Taxes

The  components of the provision for income taxes for the years ended  September
30, 1996, 1995 and 1994 are as follows (in thousands):

<TABLE>
<CAPTION>
                                                              1996            1995          1994
                                                           -------------------------------------------
<S>                                                           <C>          <C>           <C>    

Current:
    Federal                                                   $  1,297     $      --     $      --
                                                                                                 9
    State                                                           --            --
                                                                                                --
Deferred                                                           585            --
                                                                                               159
                                                           ------------------------------------------
                                                              $  1,882     $      --     $     168
                                                           ==========================================
</TABLE>

The difference between the effective income tax rate and the U.S. federal income
tax rate for the years ended  September 30, 1996,  1995 and 1994 is explained as
follows (in thousands):
<TABLE>
<CAPTION>

                                                                   1996         1995          1994
                                                              -------------------------------------------

<S>                                                              <C>           <C>           <C>     
Provision (credit) at statutory tax rate                         $  3,203      $   (794)     $    202
Alternative minimum tax                                             1,282            --             9
Operating loss carryforwards                                       (1,192)           --           (56)
Increase (decrease) in valuation allowance                         (1,590)        1,094            --
Other items                                                           179          (300)           13
                                                              -------------------------------------------
                                                                 $  1,882      $     --      $    168
                                                              ===========================================
</TABLE>

Temporary  differences which give rise to deferred tax assets and liabilities at
September 30, 1996 and 1995 are as follows (in thousands):
<TABLE>
<CAPTION>

                                                                  1996                1995
                                                              ----------------------------
<S>                                                           <C>                  <C>  
Deferred tax assets:
      Various accrued liabilities and reserves                $   1,586            $   866
      Net operating loss carryforwards                            2,359              5,523
      Alternative minimum tax                                     2,047                765
      Valuation allowance                                        (1,147)            (2,737)
                                                                 ------            -------
         Total deferred tax assets                            $   4,845            $ 4,417
                                                               --------             ------

Deferred tax liabilities:
      Accelerated depreciation                                $   4,372            $ 3,342
      Asset valuations                                              413                430
                                                                    ---                ---
         Total deferred tax liabilities                           4,785              3,772
                                                              ---------            -------
         Net deferred tax assets                              $      60            $   645
                                                               ========              =====
</TABLE>

The net change in the valuation allowance for deferred tax assets was $1,590,000
in 1996. The decrease relates primarily to the utilization of net operating loss
carryforwards generated in previous years. Realization of the Company's deferred
tax assets is dependent  on utilizing  tax  planning  strategies  or  generating
sufficient  taxable  income prior to the  expiration of the net  operating  loss
carryforwards.  Although  realization is not assured,  management believes it is
more likely than not that the net deferred tax assets will be realized.

The  Company  had  available   acquired  net  operating  loss  carryforwards  of
$4,641,000  at September  30, 1996,  which it may use to offset  future  taxable
income.  In  addition,   the  Company  had  $1,735,000  of  net  operating  loss
carryforwards  remaining from those generated in 1995,  which expire in 2010. In
1997, $2,895,000 of the total net operating loss carryforwards will be available
for utilization.  The acquired net operating loss  carryforwards  are limited to
approximately  $1,160,000 annually. Any unused amounts can be carried forward to
increase the limitation in the following  taxable year. These net operating loss
carryforwards  expire  in 2000.  The  total  carryforwards  will be  applied  to
financial statement earnings after temporary differences. At September 30, 1996,
the  Company had  alternative  minimum tax credit  carryforwards  of  $2,047,000
available for income tax  purposes,  all of which are available for use in 1997.
These credit carryforwards do not expire.

8. Employee Retirement Savings Plans

The  Company  sponsors a  voluntary  defined  contribution  401(k)  plan that is
available to substantially all employees.  The Plan may be amended or terminated
at any time by the Board of  Directors.  The Company,  although not required to,
has provided  matching  contributions  to the plan for the years ended September
30, 1996, 1995 and 1994 of $343,000, $245,000 and $240,000, respectively.


9. Segment Information

The following  table sets forth data for the years ended  September 30, 1996 and
1995 for the  reportable  industry  segments of energy  products and  industrial
products.  Intersegment  sales are not material.  Identifiable  assets are those
used in the Company's operations in each segment.

<TABLE>
<CAPTION>
                                     Energy         Industrial
                                    Products         Products          Corporate        Total
1996:
<S>                                 <C>              <C>              <C>               <C>   

Net sales                           $   147,555      $    56,627      $         --      $   204,182

Operating income                         10,529            1,413                --           11,942

Identifiable assets                      87,091           32,033             6,432          125,556

Depreciation and amortization             3,375            1,331               495            5,201

Capital expenditures                      3,757              894               846            5,497

<CAPTION>


1995:
<S>                                 <C>              <C>              <C>               <C>

Net sales                           $   128,234      $    39,662      $         --      $   167,896

Operating income (loss) (1)               1,724           (1,666)               --               58

Identifiable assets                      70,469           31,954             4,071          106,494

Depreciation and amortization             3,466              953               272            4,691

Capital expenditures                      1,197            3,922               473            5,592

<FN>

(1)   The operating loss from the industrial  products  segment  includes a $1.2
      million  charge  to  earnings  for the  reduction  in  carrying  value  of
      inventory,  primarily related to a decline in the replacement cost of flat
      rolled steel.
</FN>
</TABLE>

Transactions with one significant  energy customer for the years ended September
30, 1996 and 1995  represented  approximately 16 percent and 12 percent of total
sales,  respectively.  Transactions  with another  significant  energy  customer
represented approximately 12 percent of total sales for the year ended September
30, 1994.

Export sales were  $13,244,000,  $12,963,000 and $15,850,000 for the years ended
September  30,  1996,  1995 and 1994,  respectively.  These  energy  sales  were
primarily to Canadian customers.

10. Operating Leases

The Company  rents office  facilities  and  equipment  under  various  operating
leases.  Future  minimum  payments  under  noncancelable  operating  leases with
initial or  remaining  terms in excess of one year,  are as follows at September
30, 1996 (in thousands):

<TABLE>
<CAPTION>
                  <S>                                                    <C> 
                  1997                                                   $         720
                  1998                                                           1,122
                  1999                                                           1,110
                  2000                                                           1,023
                  2001                                                           1,010
                                                                      -------------------
                                                                         $       4,985
                                                                      ===================
</TABLE>

Rent expense for all operating  leases was  $973,000,  $742,000 and $484,000 for
the years ended September 30, 1996, 1995 and 1994, respectively.

11. Contingencies

Various  claims,  incidental  to the ordinary  course of  business,  are pending
against the Company.  In the opinion of  management,  after  consultations  with
legal  counsel,  resolution  of these matters is not expected to have a material
effect on the accompanying financial statements.

12. Stock Option Plans

The Company follows Accounting Principles Board Opinion No. 25, "Accounting for 
Stock Issued to Employees," and related interpretations in accounting for its 
employee and director stock options.

The Company  sponsors two  employee  stock option plans (the "1991 Plan" and the
"1995  Plan")  allowing  for  incentive  stock  options and  nonqualified  stock
options.  The Company  also  adopted a stock  option  plan in 1995 for  eligible
directors (the "Director  Plan") allowing for  nonqualified  stock options.  The
1991 Plan,  1995 Plan and the Director  Plan provide that  170,000,  300,000 and
25,000  shares,  respectively,  may be issued under the plans at an option price
not less  that the fair  market  value of the  stock at the time the  option  is
granted.  The 1991 Plan,  1995 Plan,  and the  Director  Plan expire in December
2000, November 1999 and November 2004, respectively.

Summarized option data as of September 30, 1996 is as follows:
<TABLE>
<CAPTION>

                                                     Shares Under               Price Per
                                                         Option                    Share
         <S>                                             <C>                     <C> 
         Options outstanding at
            October 1, 1993                               80,000                     $6.50
         Options granted                                  50,000                    $10.13
                                                          ------                     -----
         Options outstanding at
            September 30, 1994                           130,000                 $6.50-$10.13
         Options granted                                 269,000                 $7.88-$13.50
         Options outstanding at
            September 30, 1995                           399,000                 $6.50-$13.50
         Options exercised                               (31,842)                     $6.50
         Options expired                                 (73,158)                $6.50-$13.50
         Options granted                                 142,000                 $8.00-$14.00
                                                         -------                 ------------
         Options outstanding at
            September 30, 1996                           436,000                 $6.50-$14.00
                                                         =======                 ============
</TABLE>

Of the  outstanding  options,  95,000 are exercisable at September 30, 1996. The
remaining  341,000  options  outstanding  will be exercisable as follows:  6,000
shares in 1997, 66,331 shares in 1998,  128,330 shares in 1999, 68,337 shares in
2000 and 72,002 shares in 2001.













13. Quarterly Financial Data (Unaudited)

The results of operations by quarter for 1996  and 1995 were as follows 
(in thousands):
<TABLE>
<CAPTION>

                                                                 Quarter Ended
                                      December 31, 1995    March 31,      June 30, 1996      September 30,
                                                              1996                                1996
                                      -------------------------------------------------------------------------
 1996
<S>                                        <C>             <C>              <C>              <C>      
 Net sales                                 $  44,878       $  40,856 (1)    $  56,333        $  62,115
 Gross profit                                  4,225           4,373 (1)        6,583            6,959
 Net income                                    1,101           1,049 (1)        2,555            2,833
 Net income per common and common
    equivalent share                           .15               .14 (1)          .34              .38


<CAPTION>
                                                                 Quarter Ended
                                        December 31, 1994    March 31,      June 30, 1995      September 30,
                                                               1995                                1995
                                        ------------------------------------------------------------------------
 1995
<S>                                          <C>             <C>             <C>               <C>      
 Net sales                                   $  44,204       $  39,249       $  38,031         $  46,412
 Gross profit                                    2,452           1,797           1,866             1,916
 Net income (loss)                                 118 (2)        (741)           (304) (3)       (1,407) (4)(5)
 Net income (loss) per common and common
    equivalent share                             .02              (.10)           (.04)            (.19)
<FN>

(1)   Net sales,  gross  profit and net income for the  quarter  ended March 31,
      1996  included a one-time  effect of the change in the  Company's  revenue
      recognition   practices  of  $8.7  million,  $1.0  million  and  $839,000,
      respectively, or $.11 per share.

(2)   Net income for the quarter ended  December 31, 1994  included  charges for
      the  start-up  of the  structural  tube  production  facility  of $245,000
      ($184,000 net income effect or $.02 per share).

(3)   Net income for the quarter  ended June 30, 1995  included  other income of
      $800,000 for insurance  proceeds  applicable  to prior periods  related to
      recovery of an  inventory  loss  ($600,000  net income  effect or $.08 per
      share).

(4)   Net  income for the  quarter  ended  September  30,  1995  included a $1.2
      million  charge  to  earnings  for the  reduction  in  carrying  value  of
      inventory, primarily related to a decline in the replacement costs of flat
      rolled  steel in the  industrial  products  industry  segment  ($0.16  per
      share).

(5)   Net income for the quarter  ended  September  30, 1995 included a $309,000
      charge to expense for the reversal of the recorded  1995 income tax credit
      provision ($.04 per share).

</FN>
</TABLE>





                         Report of Independent Auditors


Board of Directors and Stockholders
Maverick Tube Corporation

We have audited the  accompanying  consolidated  balance sheets of Maverick Tube
Corporation  and  subsidiary as of September 30, 1996 and 1995,  and the related
consolidated statements of operations,  stockholders' equity, and cash flows for
each of the three years in the period ended September 30, 1996.  These financial
statements   are  the   responsibility   of  the   Company's   management.   Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

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

In our opinion, the consolidated  financial statements referred to above present
fairly,  in all  material  respects,  the  consolidated  financial  position  of
Maverick Tube Corporation and subsidiary at September 30, 1996 and 1995, and the
consolidated  results of their  operations  and their cash flows for each of the
three years in the period ended September 30, 1996, in conformity with generally
accepted accounting principles.



                                        /s/ ERNST & YOUNG LLP

St. Louis, Missouri
October 28, 1996