EXHIBIT 13

MARKET FOR OUR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Principal Market

Our common  stock,  par value  $.01 per share,  is traded on the NMS tier of the
Nasdaq Stock Market under the symbol "MAVK."

Stock Price and Dividend Information

The high and low closing sales prices on the NMS tier of the Nasdaq Stock Market
of our common  stock  during the first,  second,  third and fourth  quarters  of
fiscal 1999 and fiscal 1998,  respectively,  were as follows:

                          Fiscal 1999                 Fiscal 1998
        Quarter         High        Low             High       Low

        First         8 15/16     5  5/32          50 3/4     20 5/16
        Second        7  5/16     5  1/2           25 3/4     14 5/8
        Third        15  1/4      5 11/16          18 3/8     10 9/16
        Fourth       22          11  7/8           11 1/4      5 3/8

We  have  not  declared  or  paid  cash  dividends  on our  common  stock  since
incorporation.  We currently intend to retain earnings to finance the growth and
development of our businesses and do not anticipate paying cash dividends in the
near  future.  Any payment of cash  dividends in the future will depend upon our
financial condition,  capital requirements and earnings as well as other factors
the Board of Directors may deem  relevant.  Our Revolving  Credit  Facility with
commercial  lenders  restricts  the  amount  of  dividends  we  can  pay  to our
stockholders.

Approximate Number of Holders of Common Stock

There were 244 holders of record of our common stock as of September 30, 1999.

STOCKHOLDER INFORMATION

Corporate Headquarters     Transfer Agent and Registrar   Independent Auditors
16401 Swingley Ridge Road  Harris Trust and Savings Bank  Ernst & Young LLP
Seventh Floor              P.O. Box 755                   Gateway One Suite 1400
Chesterfield, MO  63017    111 West Monroe                701 Market Street
(636) 733-1600             Chicago, IL  60690             St. Louis, MO  63101
                           (312) 461-6942                 (314) 259-1000

10-K Report Available

Stockholders  may obtain a copy of our Annual Report on Form 10-K filed with the
Securities  and Exchange  Commission  by writing to Maverick  Tube  Corporation,
16401  Swingley  Ridge  Road,  Seventh  Floor,  Chesterfield,   Missouri  63017;
Attention: Secretary.

DIRECTORS

William E. Macaulay                     Gregg M. Eisenberg
Chairman and Chief Executive Officer,   Chairman of the Board,
First Reserve Corp., Director of        President and Chief Executive Officer
Weatherford, Inc., National-Oilwell,
Inc., Pride International, Inc.,
Superior Energy Services, Inc. and
Trans Montaigne Inc.

John M. Fox                             C. Robert Bunch
Director, President and Chief           Vice President and Chief Administrative
Executive Officer Markwest              Officer of Input/Output, Inc.
Hydrocarbon, Inc.

Wayne P. Mang                           C. Adams Moore
Non-Executive Chairman and              Independent consultant in steel
Director of Laclede Steel Co.           distribution and fabrication, Director
                                        of Fisher Tank Company and Warren
                                        Fabricating Corporation

David H. Kennedy
Independent energy consultant and
Director of Berkley Petroleum
Corporation and Pursuit Resources Corporation

OFFICERS

Gregg M. Eisenberg                      Sudhakar Kanthamneni
Chairman of the Board, President                Vice President -- Manufacturing
and Chief Executive Officer                       & Technology

Barry R. Pearl                          T. Scott Evans
Vice President -- Finance and                   Vice President -- Commercial
Administration, Treasurer, Secretary              Operations
and Chief Financial Officer
<PAGE>
                   Maverick Tube Corporation and Subsidiaries

                        Historical Financial Information

The  following  selected  financial  data  are  derived  from  our  consolidated
financial statements,  which have been audited by Ernst & Young LLP, independent
auditors.  The selected data should be read in conjunction with the consolidated
financial  statements,  related notes and other financial  information  included
herein.
<TABLE>
                                                        Year Ended September 30
<CAPTION>
                                        1999         1998        1997        1996(2)    1995(3)
                                                         (in thousands)
<S>                                   <C>          <C>         <C>         <C>        <C>

Statement of Operations Data:
Net sales                             $172,417     $265,389    $291,060    $204,182   $167,896
Cost of goods sold                     169,562      232,038     252,803     182,042    159,865
Gross profit                             2,855       33,351      38,257      22,140      8,031
Selling, general and administrative     13,703       14,815 (4)  13,966      10,198      7,728
Start-up costs                           3,462 (1)       --          --          --        245
Income (loss) from operations          (14,310)      18,536      24,291      11,942         58
Interest expense                         1,861        1,731       2,067       2,522      3,164
Other income                                --           --          --          --        772
Income (loss) before income taxes      (16,171)      16,805      22,224       9,420     (2,334)
Provision (benefit) for income taxes    (5,722)       5,420       7,339       1,882         --
Net income (loss)                     $(10,449)     $11,385     $14,885      $7,538    $(2,334)
Diluted earnings (loss) per share        $(.68)       $0.73       $0.97       $0.50     $(0.16)

Weighted average shares
   deemed outstanding                   15,438       15,564      15,282      15,001     14,920

Other Data:
Depreciation and amortization            7,355        6,172       5,697       5,201      4,691
Capital expenditures                    11,869       22,181       9,537       5,497      5,592
EBITDA (5)                              (6,955)      24,708      29,988      17,143      4,749
Average selling price per ton (6):
   Energy products                        $543         $683        $655        $620       $609
   Industrial products                    $452         $477        $483        $484       $527

Balance Sheet Data:
(End of period)
Working capital                         44,316       60,362      44,992      32,652     30,272
Total assets                           160,148      156,885     162,064     125,556    106,494
Current maturities of long-term debt       708          653         604       1,843      2,795
Long-term debt (less
   current maturities)                   7,518        8,226       8,879      11,901     18,045
Revolving credit facility               31,000       27,400      10,000      13,250     15,000
Stockholders' equity                    79,646       90,063      77,868      57,247     49,503


<FN>
(1)  Represents the operating loss of our cold drawn mechanical  tubing facility
     which began operations in October 1998.

(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 basic
     and diluted net income per share of  $8,700,000,  $1,000000,  $839,000  and
     $0.06, respectively.

(3)  Includes the first period of results of  operation of our  structural  tube
     facility which began operations in October 1994.

(4)  Includes a write-down of software costs of $1,605,000.

(5)  EBITDA   represents   earnings  (loss)  before   interest,   income  taxes,
     depreciation  and  amortization.  We believe  EBITDA is a widely  accepted,
     supplemental  financial  measurement used by many investors and analysts to
     analyze and compare companies' performances.  However, EBITDA should not be
     considered  as an  alternative  to income from  operations or to cash flows
     from  operating,  investing  or  financing  activities,  as  determined  in
     accordance with generally accepted  accounting  principles.  Because EBITDA
     excludes  some, but not all, items that affect net income and because these
     measures may vary among companies,  the EBITDA data presented above may not
     be comparable to similarly titled measures of other companies.

(6)  Includes only "prime"  products  which  exclude scrap and secondary  sales,
     product returns and selling allowances.
</FN>
</TABLE>
<PAGE>
MANAGEMENT'S  DISCUSSION  AND  ANALYSIS OF  FINANCIAL  CONDITION  AND RESULTS OF
OPERATIONS

As used herein,  unless the context  otherwise  requires,  the terms "we," "us,"
"our" or "Maverick" refers to Maverick Tube Corporation and its subsidiaries.

Certain  statements  contained  in  "Management's  Discussion  and  Analysis  of
Financial  Condition and Results of Operations"  regarding  matters that are not
historical  facts  (including  statements as to the beliefs or  expectations  of
Maverick)  are   forward-looking   statements.   Because  such   forward-looking
statements include risks and uncertainties, actual results may differ materially
from those expressed or implied by such forward-looking statements. For example,
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 our energy
related products,  the future impact of industry-wide  draw-downs of inventories
and future import levels.  Uncertainty also exists as to the trend and direction
of both product  pricing and  purchased  steel  costs.  Reference is made to the
"Risk Factors"  discussed in Exhibit 99.1 of Maverick's Form 10-K for its fiscal
year ended September 30, 1999.

OVERVIEW

Our products include Electric  Resistance Welded (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  service  centers  who  supply  end  users in  construction,
transportation,  agriculture and other industrial enterprises.  During the first
quarter of fiscal 1999, we began the  production  of cold drawn tubing  products
for industrial applications.  During the year ended September 30, 1999, sales of
cold drawn mechanical tubing had not reached material levels.

Demand for our energy related products depends  primarily upon the number of oil
and  natural gas wells being  drilled,  completed  and worked over in the United
States and Canada and the depth and  drilling  conditions  of these  wells.  The
levels of these  activities  are  primarily  dependent  on oil and  natural  gas
prices.  Domestic end-users obtain OCTG from domestic and foreign pipe producers
and  from  draw-downs  of  their  or  distributors'  inventories.  According  to
published industry reports,  average U.S. drilling declined by 33.3% from fiscal
1998 to fiscal 1999, averaging approximately 602 rigs, with gas-related drilling
declining by 22.3% and oil-related  drilling declining by 55.6%.  Average energy
prices  decreased  during fiscal 1999,  with natural gas decreasing 8.8% and oil
decreasing by 3.4%. The decreases in energy prices seen  throughout the year had
a negative  effect on drilling levels in fiscal 1999. At the end of fiscal 1998,
drilling was at 754 rigs,  down 24.4% from its fiscal 1997 year-end level of 998
rigs,  and  continued  to decline to 488 rigs by April 1999.  Drilling  activity
during the last half of 1999 increased substantially from its April low to close
the fiscal year at 730 rigs, down by only 3.2% from fiscal 1998 year-end levels.

The  following  table  illustrates  certain  factors  related  to  industry-wide
domestic drilling activity, domestic energy prices, domestic oil country tubular
goods consumption, shipments, imports and inventories for the periods presented:




                                               Fiscal Year Ended September 30
                                           -------------------------------------
                                            1999            1998           1997
                                           ------         -------        -------
U.S. drilling activity:
Average rig count                            602             903            905
Average U.S. energy prices:
Oil per barrel (West Texas Intermediate)  $16.36          $16.94         $21.94
Natural gas per MCF (Average U.S.)        $ 2.06          $ 2.26         $ 2.47

U.S. oil country tubular goods consumption
   (in thousands of tons):
      U.S. producer shipments                661           1,548          2,021
      Imports                                134             402            360
      Inventory (increase)/decrease          370             (66)          (299)
      Used pipe                              158             139            187
                                          -------         -------        -------
         Total U.S. consumption            1,323           2,023          2,269
                                          =======         =======        =======

The rig count in the table is based on weekly  rig count  reporting  from  Baker
Hughes,  Inc.  Energy prices in the table are monthly  average  period prices as
reported by Spears and  Associates for West Texas  Intermediate  grade crude oil
and the average U.S.  monthly  natural gas cash price as reported by Natural Gas
Week.  Imports  are as  reported  by Duane  Murphy and  Associates  in "The OCTG
Situation  Report." Inventory  (increase)/decrease  are our estimates based upon
independent    research   by   Duane    Murphy   and    Associates.    Inventory
(increase)/decrease  (in thousands of tons) as reported by Pipe Logix,  Inc., an
independent  domestic OCTG industry reporting service,  for fiscal 1998 and 1997
was (116) and (717) (fiscal year ended September 30, 1999 not  available).  Used
pipe quantities are calculated by multiplying 8.3 recoverable  tubing and casing
tons by the number of abandoned oil and gas wells. U.S.  consumption of OCTG are
management  estimates  based on estimated per rig consumption of OCTG multiplied
by the Baker Hughes rig count. Total U.S.  consumption (in thousands of tons) as
reported  by Pipe  Logix,  Inc.,  for  fiscal  1998 and 1997 was 1,939 and 1,943
(fiscal year ended September 30, 1999 not available).  U.S.  producer  shipments
are our estimates calculated based on the components listed above.

Imports  decreased during fiscal 1999 from a 19.9% market share in 1998 to 10.1%
market share in fiscal 1999. During fiscal 1998,  industry  inventory  increases
resulted  in  an  estimated  additional  demand  of  3.3%  of  total  U.S.  OCTG
consumption. During fiscal 1999, industry inventory decreases adversely affected
U.S.  producer  shipments  by  satisfying  an  estimated  28.0% of  consumption.
Management believes that at September 30, 1999, industry  inventories were at or
below  normal  levels in  relation  to  demand,  as  inventory  months of supply
decreased 34.9%, from 8.3 months at fiscal year-end 1998 to 5.4 months at fiscal
year-end 1999.

As a result of declining drilling activity and a substantial decline in industry
inventories,  partially offset by decreased imports, we estimate that total U.S.
producer  shipments  declined  by 57.3% as  compared  to the  fiscal  year ended
September  30, 1998.  During that same period,  our  shipments of U.S. OCTG were
down  32.8% and our  export  sales,  primarily  to  Canada,  declined  by 22.9%.
However, we estimate that our domestic OCTG market share increased to 22% during
fiscal 1999 from 14% during fiscal 1998.

Published  information  suggests  that demand for line pipe was also down during
fiscal 1999 by an estimated 3.7%.  However,  domestic  shipments rose by 7.4% as
the import market share fell from 41.6% to 34.8%.

Given the numerous  applications for our industrial products,  sources of demand
for these  products  are  diversified.  Demand  depends on the general  level of
economic activity in the construction,  transportation,  agricultural,  material
handling and  recreational  market segments,  the use of structural  tubing as a
substitute for other  structural steel forms,  such as I-beams and H-beams,  and
draw-downs of existing customer inventories.

We estimate that the demand for structural tube products  (commonly  referred to
as hollow structural sections or HSS) of the type we produce declined by 2.1% in
fiscal  1999 as  compared  to fiscal  1998 and  total  U.S.  producer  shipments
declined  by 3.0% as  import  market  share  increased  slightly.  According  to
published reports,  the standard pipe market demand decreased 10.3%, while total
domestic  producer  shipments  declined  by 15.7%  as the  import  market  share
increased from 28.4% to 32.6%.

Pricing of our  products  was down during  fiscal 1999  compared to fiscal 1998.
Average  pricing of our OCTG,  line,  structural  and standard  product  pricing
decreased by 19.9%, 19.7%, 10.2% and 12.2%, respectively. Energy product pricing
was down due to the  decrease  in drilling  activity.  Structural  and  standard
pricing was down  primarily  due to declining  steel  prices  during most of the
year.

Steel costs included in cost of goods sold  decreased  during fiscal 1999 by $42
per ton,  or 13.0%,  from $321 per ton to $279 per ton.  Our major  supplier  of
steel announced three price decreases from  mid-September 1998 to November 1998,
reducing our  replacement  cost of steel by $50 per ton. These price  reductions
were  reflected  in our cost of  goods  sold in the  second,  third  and  fourth
quarters of fiscal 1999.  However,  this same supplier has announced  five price
increases since December 1998, which will increase our replacement cost of steel
by approximately $45 per ton. We estimate that these increases will not be fully
reflected in cost of goods sold until the second quarter of fiscal 2000.

The supply of steel in the United States increased significantly during calendar
1998,  primarily due to previous capacity additions and increased import levels.
These market  conditions kept steel costs  relatively low during 1999.  However,
steel trade cases filed with the  International  Trade  Commission by U.S. steel
producers  against  foreign  steel  producers  in  September  1998  have  been a
contributing  factor to the  recent  steel  cost  increases  and  could  have an
additional  adverse impact on our future replacement costs of steel. As a result
of these  factors,  anticipated  future  steel  price  increases  may impact our
product margins.

The OCTG market  conditions  described  above  impacted our  operations  and our
competitors  significantly  during  1999,  as sales were  substantially  reduced
throughout  the year  due to the  rapid  fall in oil  prices  and the  resulting
significant decrease in drilling activity. Consequently, industry-wide inventory
levels  were  excessive  and the  impact of these  industry  draw-downs  sharply
reduced domestic  shipments.  As our recent  experience  indicates,  oil and gas
prices are volatile  and can have a  substantial  effect on drilling  levels and
resulting demand for our energy related products.  Uncertainty also exists as to
the future  demand and pricing for HSS and other  industrial  related  products.
Although  drilling  activity has been  recovering  from the  recently  depressed
levels,  no  assurance  can be given  regarding  the  timing  and extent of such
recovery.

RESULTS OF OPERATIONS

The following table sets forth, for the periods presented,  certain  information
relating to our operations expressed as a percentage of net sales:


                                         Year Ended September 30,
                                          1999     1998     1997
                                         ------------------------
Net sales                                100.0%   100.0%   100.0%

Cost of goods sold                        98.3     87.4     86.9
                                         ------------------------
Gross profit                               1.7     12.6     13.1

Selling, general and administrative        8.0      5.6      4.8

Start-up costs                             2.0       --       --
                                         ------------------------
Income (loss) from operations             (8.3)     7.0      8.3

Interest expense, net                      1.1       .7       .7
                                         ------------------------
Income (loss) before income taxes         (9.4)     6.3      7.6

Provision (benefit) for income taxes      (3.3)     2.0      2.5
                                         ------------------------
Net income (loss)                         (6.1)     4.3      5.1
                                         ========================


Fiscal Year Ended September 30, 1999 Compared to Fiscal Year Ended September 30,
1998

Overall Company

In fiscal 1999, net sales decreased $93.0 million, or 35.0%, from $265.4 million
in fiscal 1998 to $172.4 million in fiscal 1999. These results were attributable
primarily to a decrease of 21.1% in total product  shipments,  from 428,216 tons
in fiscal  1998 to 337,959  tons in fiscal  1999.  Overall  average  net selling
prices decreased during fiscal 1999 by 17.7%, from an average of $620 per ton to
$510 per ton.

Cost of goods sold  decreased  $62.5 million,  or 26.9%,  from $232.0 million in
fiscal  1998 to $169.5  million in fiscal  1999.  The overall  decrease  was due
primarily to decreased product shipments. However, the overall unit cost per ton
of  products  sold  decreased  7.4% (from an average of $542 per ton to $502 per
ton) in fiscal  1999.  The  decrease  was due  primarily  to a decrease in steel
costs.  Steel cost of goods sold decreased  13.0%,  or $42 per ton during fiscal
1999. See "Overview." Overall conversion costs remained relatively stable during
fiscal 1999.

Gross profit  decreased  $30.5 million,  or 91.4%,  from $33.4 million in fiscal
1998 to $2.9 million in fiscal 1999.  Gross profit as a percentage  of net sales
was 1.7% for fiscal 1999,  as compared to 12.6% for fiscal  1998.  The change in
the gross profit is due to the factors discussed above.

Selling,  general and  administrative  expenses  decreased $1.1 million or 7.5%,
from  $14.8  million  in fiscal  1998 to $13.7  million  in fiscal  1999.  These
expenses  decreased  principally  as a  result  of the  write-down  of  software
development  costs of $1.6 million in fiscal 1998. These costs were also reduced
by lower sales commissions on industrial products sales,  partially offset by an
increase in bad debt expense  (which  reflects the  deterioration  of a specific
accounts  receivable  balance) and normal wage increases.  Selling,  general and
administrative  expenses as a  percentage  of net sales  increased  from 5.6% in
fiscal 1998 to 8.0% in fiscal 1999 due primarily to the decreased sales level.

During  September  1998,  we  acquired  assets  that are being  utilized  in the
production  of cold  drawn  tubular  products  at a  facility  in Beaver  Falls,
Pennsylvania.  We  incurred  operating  losses of $3.5  million  in fiscal  1999
related  to the  operations  at  this  facility  which  had not  reached  normal
production  capacity.  These costs are comprised primarily of salary and related
costs for the production,  sales and administrative personnel prior to the fully
integrated  operation of the facility.  These start-up  costs  increased our net
loss by $0.14 per diluted share for fiscal 1999.

Interest expense increased  $130,000,  or 7.5%, from $1.7 million in fiscal 1998
to $1.9  million in fiscal 1999 as a result of  increased  interest  rates.  The
increased interest rates were primarily due to revisions to our Revolving Credit
Facility to reflect our operating results,  largely  attributable to the effects
of the unfavorable energy market, and to provide additional  availability in the
borrowing base.

The benefit from income taxes was $5.7 million for fiscal 1999,  compared to the
prior  year  when we  recorded  a  provision  of $5.4  million.  This  change is
attributable  to the  generation  of pre-tax  losses of $16.2  million in fiscal
1999, compared to pre-tax income in fiscal 1998 of $16.8 million.

At September 30, 1999, we had available  net  operating  loss  carryforwards  of
$2,320,000  which were  acquired in prior years and expire in 2000. In addition,
we had  $8,611,000  of net operating  loss  carryforwards  which were  generated
during  fiscal  1999  and  expire  in  2019.  All of these  net  operating  loss
carryforwards  can be  utilized  in fiscal  2000 to offset  financial  statement
earnings after temporary differences.  At September 30, 1999, we had alternative
minimum  tax  credit  carryforwards  of  $2,541,000  available  for  income  tax
purposes. See Note 9 of the Notes to the Consolidated Financial Statements.

Realization  of our net  operating  loss  carryforwards  which expire in 2000 is
dependent on generating approximately $3.0 million of taxable income from normal
operations during fiscal 2000, or the adoption of certain available tax planning
strategies.  Although  realization is not assured,  we believe it is more likely
than not that the net deferred tax assets will be realized.

As a result of the decreased gross profit and the other factors discussed above,
we generated a net loss of $10.4  million,  or $0.68  diluted loss per share,  a
decrease of $21.8 million from the $11.4 million,  or $0.73 diluted earnings per
share reported for fiscal 1998.

Energy Products Segment

Energy product sales decreased $82.9 million,  or 44.9%,  from $184.8 million in
fiscal 1998 to $101.9 million in fiscal 1999. OCTG product  shipments  decreased
76,946 tons, or 31.8%, from 242,146 tons to 165,200 tons. Our domestic shipments
of OCTG fell by 32.8% due to a declining  rig count  throughout  the fiscal year
and  inventory  draw-downs  by our  customers.  Our export  sales,  primarily to
Canada,  decreased  by 22.9%,  from 25,866 tons in fiscal 1998 to 19,931 tons in
fiscal 1999,  as the average  Canadian rig count fell 34.4% from 323 rigs to 212
rigs.  Line pipe  shipments  decreased by 6.3%.  The average  selling  price for
energy  products  was $551 per ton, a decrease of $151 per ton. The decrease was
principally  due to the  deterioration  in the energy market  throughout  fiscal
1999.

Energy  products costs of goods sold decreased  $57.2  million,  or 35.3%,  from
$162.1 million in fiscal 1998 to $104.9 million in fiscal 1999. Gross profit for
energy products  decreased  approximately  $25.8 million,  from $22.8 million of
gross profit in fiscal 1998 to $3.0 million of gross loss in fiscal 1999. Energy
products gross loss percentage was 3.0% compared to a gross profit percentage of
12.3% in fiscal 1998.

Industrial Products Segment

Industrial  products sales decreased $10.0 million, or 12.4%, from $80.6 million
in fiscal 1998 to $70.6 million in fiscal 1999.  Industrial  products  shipments
decreased  7.3% from 164,973 tons in fiscal 1998 to 153,001 in fiscal 1999.  The
average selling price of industrial products was $461 per ton, a decrease of $27
per ton. This  decrease was  principally  due to decreasing  steel prices in the
first six months of fiscal 1999.

Industrial  products costs of goods sold decreased $5.3 million,  or 7.6%,  from
$70.0  million  in  fiscal  1998 to $64.6  million  in fiscal  1999.  Industrial
products gross profit  decreased $4.7 million,  or 44.1%,  from $10.6 million in
fiscal 1998 to $5.9 million in fiscal 1999.  Gross profit as a percentage of net
sales was 8.4% for  fiscal  1999,  as  compared  to 13.1% for fiscal  1998.  The
decreased  gross profit was primarily  attributable  to the reduction in selling
prices.

Fiscal Year Ended September 30, 1998 Compared to Fiscal Year Ended September 30,
1997

Overall Company

In fiscal 1998, net sales decreased $25.7 million,  or 8.8%, from $291.1 million
in fiscal 1997 to $265.4 million in fiscal 1998. These results were attributable
primarily to a decrease of 8.9% in total product shipments, from 469,958 tons in
fiscal 1997 to 428,216 tons in fiscal 1998.  Overall  average net selling prices
remained relatively constant during fiscal 1998.

Cost of goods sold  decreased  $20.8  million,  or 8.2%,  from $252.8 million in
fiscal  1997 to $232.0  million in fiscal  1998.  The overall  decrease  was due
primarily to decreased product shipments. However, the overall unit cost per ton
of  products  sold  increased  0.7% (from an average of $538 per ton to $542 per
ton)  in  fiscal  1998.  This  increase  was due  primarily  to an  increase  in
conversion  costs from a higher cost product mix and less  favorable  fixed cost
absorption due to lower production.  The increase in conversion costs was mostly
offset by a decrease in steel costs by $18 per ton, or 5.3% in fiscal 1998.

Gross profit decreased $4.9 million, or 12.8%, from $38.3 million in fiscal 1997
to $33.4  million in fiscal 1998.  Gross profit as a percentage of net sales was
12.6% for fiscal 1998, as compared to 13.1% for fiscal 1997.

Selling,  general and administrative  expenses increased $849,000, or 6.1%, from
$14.0  million in fiscal 1997 to $14.8  million in fiscal 1998.  These  expenses
increased  principally  as a result of the  write-down  of software  development
costs of $1.6 million in fiscal 1998.  These costs were also increased by higher
sales commissions on industrial products sales and partially offset by decreased
employee incentive  compensation and decreased selling expenses related to lower
energy  sales  volumes.  Selling,  general  and  administrative  expenses  as  a
percentage  of net sales  increased  from 4.8% in fiscal  1997 to 5.6% in fiscal
1998.

Interest expense decreased $336,000,  or 16.3%, from $2.1 million in fiscal 1997
to $1.7  million in fiscal  1998 as a result of  decreased  average  borrowings,
decreased interest rates and additional amounts of interest expense  capitalized
on additions to property,  plant and equipment.  The decreased  borrowings  were
primarily  the  result  of  principal   repayments  from  funds  generated  from
operations.

The  provision  for income  taxes  decreased  $1.9  million from $7.3 million in
fiscal 1997 to $5.4  million in fiscal 1998 as a result of the reduced  level of
income before income taxes recorded in fiscal 1998.

As a result of the foregoing factors, net income decreased $3.5 million from net
income of $14.9 million,  or $0.97 diluted earnings per share, in fiscal 1997 to
net income of $11.4  million,  or $0.73  diluted  earnings per share,  in fiscal
1998.

Energy Products Segment

Energy product sales decreased $39.0 million,  or 17.4%,  from $223.9 million in
fiscal 1997 to $184.8 million in fiscal 1998. OCTG product  shipments  decreased
66,282 tons, or 21.5%, from 308,428 tons to 242,146 tons. Our domestic shipments
of OCTG fell 14.7% due to excessive levels of industry inventory and a declining
rig count  throughout  the fiscal year.  Our export sales,  primarily to Canada,
decreased  by 37.1%,  from  41,092  tons in fiscal 1997 to 25,866 tons in fiscal
1998, as Canadian drilling activity fell from 392 rigs at the end of fiscal 1997
to 161 at the end of  fiscal  1998.  Line  pipe  shipments  decreased  by  20.4%
principally due to increased import  penetration.  The average net selling price
for energy  products  was $702 per ton, an increase of $34 per ton. The increase
was  principally due to higher product pricing early in the year and an improved
mix of higher value products.

Energy  products cost of goods sold  decreased  $30.6  million,  or 15.9%,  from
$192.7 million in fiscal 1997 to $162.1 million in fiscal 1998. Gross profit for
energy  products  decreased  approximately  $8.4  million  or 27.0%,  from $31.2
million in fiscal 1997 to $22.8 million in fiscal 1998.  Energy  products  gross
profit percentage was 12.3%, compared to 13.9% in fiscal 1997.

Industrial Products Segment

Industrial  products sales increased $13.4 million, or 19.9%, from $67.2 million
in fiscal 1997 to $80.6 million in fiscal 1998.  Industrial  products  shipments
increased  22.2%,  from  135,029  tons in fiscal 1997 to 164,973  tons in fiscal
1998.  The average net selling price of industrial  products was $488 per ton, a
decrease of $10 per ton from the prior year.  This decrease was  principally due
to the decline in standard pipe pricing caused by an increase in imports.

Industrial  products costs of goods sold increased $9.8 million,  or 16.3%, from
$60.1  million  in  fiscal  1997 to $69.9  million  in fiscal  1998.  Industrial
products  gross profit  increased  $3.5  million,  or 49.9% from $7.1 million in
fiscal 1997 to $10.6  million in fiscal  1998.  The  improved  gross  profit was
primarily   attributable  to  declining  steel  costs  and  improved   operating
efficiencies  during  fiscal 1998,  partially  offset by slightly  lower selling
prices. Industrial products gross profit percentage was 13.1%, compared to 10.5%
in fiscal 1997.

LIQUIDITY AND CAPITAL RESOURCES

Working capital at September 30, 1999 was $44.3 million and the ratio of current
assets to current liabilities was 2.1 to 1, compared to working capital of $60.4
million and a current ratio of 3.3 to 1 at September  30, 1998.  The decrease in
working  capital was  principally  due to a $12.5  million  increase in accounts
payable,  a $7.2 million  decrease in  inventories,  a $1.0 million  increase in
prepaid  expenses,  partially  offset by a $4.3  million  increase  in  accounts
receivable.  The decrease in inventories  was due to decreased  volume of energy
business,  particularly  in the first  half of fiscal  1999.  The  increases  in
accounts  receivable  and  accounts  payable  were due to the increase in energy
production  and sales  experienced  in the last two months of fiscal 1999.  Cash
provided by operating  activities for fiscal 1999 was $11.9 million. The primary
source  of cash  was  the  above  described  changes  in  operating  assets  and
liabilities,  which  offset  the  net  cash  loss  of  $3.0  million  (excluding
depreciation and amortization of $7.4 million).

During fiscal 1998 and 1997, net cash provided by operating  activities was $3.1
million and $16.7 million,  respectively.  In these years, the net cash provided
by operating  activities was primarily used to fund capital expenditures and the
pay-down of net long-term borrowings.

Cash  used in  investing  activities  in  fiscal  1999,  1998 and 1997 was $14.0
million, $22.2 million and $9.4 million,  respectively. In fiscal 1999, this use
was primarily for purchases of equipment of $7.3 million and our new  enterprise
resource  planning  system of $4.6  million and for the deposit on  equipment of
$2.1 million  discussed  below.  We funded the  remaining  $9.65  million of the
purchase  price for the equipment on November 10, 1999.  See Note 2 of the Notes
to the  Consolidated  Financial  Statements.  In 1998  and  1997,  we  purchased
property,  plant and equipment of $22.0 (of which $11.5 million was spent on the
purchase of the production  facility for cold drawn mechanical  tubing) and $9.5
million, respectively.

During  fiscal  1999,  1998 and  1997,  cash  provided  by (used  in)  financing
activities  was $3.0,  $17.0,  and ($5.0)  million.  Cash  provided by financing
activities  in fiscal  1999 was  primarily  attributable  to a $3.6  million net
increase in our Revolving Credit Facility.  The increase in our Revolving Credit
Facility  was  offset by other  regularly  scheduled  term debt  payments.  Cash
provided by financing activities in fiscal 1998 was primarily  attributable to a
$17.4  million net increase in our  Revolving  Credit  Facility used to fund the
purchase of the production  facility for cold drawn mechanical  tubing and other
working  capital  needs.  Cash used by financing  activities  in fiscal 1997 was
primarily  attributable  to the  pay-off  of a $3.7  million  term  note used to
finance the  relocation of the energy  facility to Arkansas,  and a $3.3 million
net decrease in our Revolving Credit Facility,  partially offset by $2.5 million
of proceeds from the exercise of stock options.

Our capital  expenditure budget for fiscal 2000 is $49.0 million, of which $40.0
million will be used for the  construction and equipping of a new large diameter
pipe and tubing facility which will be built adjacent to our existing facilities
in Hickman Arkansas.  We funded this project principally through the issuance of
2,300,000  shares of common  stock.  Total  proceeds  from the sale,  net of the
underwriting  discount and other expenses are expected to be $34.9 million.  The
remaining $9.0 million of our capital expenditure budget will be used to acquire
new equipment for our existing  manufacturing  facilities and to enhance our new
enterprise  resource  planning system. We expect to meet ongoing working capital
and the remaining  capital  expenditure  requirements from a combination of cash
flow from operating  activities,  including a $3.7 million income tax refund and
available  borrowings  under  our  Revolving  Credit  Facility,   all  of  which
constitutes our primary source of liquidity.

Our Revolving Credit Facility  provides for maximum  borrowings up to the lesser
of the eligible  borrowing base or $50.0  million,  and bears interest at either
the  prevailing  prime rate or the  Eurodollar  rate,  adjusted  by an  interest
margin,  depending upon certain  financial  measurements.  The Revolving  Credit
Facility was amended as of March 31, 1999 to revise financial covenants in order
to reflect our operating  results,  largely  attributable  to the effects of the
unfavorable  energy  market,  and  to  provide  additional  availability  in our
borrowing base. The Revolving Credit Facility is secured by accounts receivable,
inventories  and certain  equipment and will mature on September 30, 2003. As of
September 30, 1999,  the  applicable  interest rate on this Credit  Facility was
7.36  percent  per  annum,  and we had $15.8  million  in  additional  available
borrowings.  As of  September  30,  1999,  we had $1.6  million in cash and cash
equivalents.

Year 2000 Readiness Disclosure

We have  developed a Year 2000 Action Plan to deal with the potential  impact of
the year 2000 on our  information  systems.  The plan specifies a range of tasks
and  goals,  which we expect to  achieve  by  various  dates  before  2000.  The
principal  goals  of  our  plan  include  assessment  of our  computer  systems,
remediation of any identified  problems and testing of the systems.  To date, we
are on target with the plan and are meeting our major deadlines.

We rely  extensively on computer  technology for our information  systems.  As a
result  of  our  assessment,   we  have  identified  several  older  information
technology  systems that  presented  certain risks of failure or  malfunction in
connection  with the Year 2000  issue.  Accordingly,  we are in the  process  of
implementing a new enterprise  resource planning system,  which will replace and
upgrade  the  older  systems,  some of which  were not Year 2000  compliant.  We
believe the new system will function  through the transition  from 1999 to 2000.
The integrated  information provided by this new system will enhance our ability
to  make  more  informed  decisions  regarding  sales  and  inventory,  optimize
inventory levels and minimize costs. We anticipate completing the implementation
before  December  31,  1999.  The  total  costs  of the  system  implementation,
including  the cost of software and related  internal  costs,  is expected to be
$5.8 million,  of which  approximately  $5.2 million has been  expended  through
September 30, 1999.

We completed our  assessment,  remediation  and testing  phases of our plan with
respect  to  internal   non-information   technology   systems,   including  our
manufacturing   machinery  and   equipment.   During  our  assessment  of  these
non-information  technology  systems, we did not identify any significant issues
related to the Year 2000 problem.  As a result, we do not anticipate any further
remediation of this equipment in connection with the Year 2000 problem.

We have monitored the Year 2000  preparedness  of our third party  providers and
service  providers,  utilizing  various  methods for  testing and  verification.
However,  our  ability  to  evaluate  has been  limited  to some  extent  by the
willingness  of  vendors  to supply  information  and the  ability of vendors to
verify the Year 2000  preparedness of their own systems or their  sub-providers.
We have  requested  certifications  of Year  2000  preparedness  from  principal
software  and  equipment  providers.  In those cases where a vendor has not been
able to  certify  its  product's  preparedness  with  respect  to the Year  2000
problem,  we have taken steps to bring the system into  compliance or to replace
the system.

Our failure to  successfully  implement our plan could result in an interruption
in or failure of certain normal  business  activities or operations.  Even if we
successfully complete our plan, we may also be exposed to the failure of some of
our  customers,  suppliers  or vendors to prepare  adequately  for the Year 2000
problem.  These  failures  could  materially  adversely  affect  our  results of
operations, liquidity and financial condition. Currently, we are on schedule and
believe  that our  successful  completion  of the  assessment,  remediation  and
testing phases should significantly reduce the risks we face with respect to the
Year 2000 problem.

We believe  that is  difficult  to fully assess the risks of the Year 2000 issue
due to  numerous  uncertainties  surrounding  the issue.  We believe the primary
risks are  external to us and relate to the Year 2000  readiness  of  customers,
suppliers and transportation providers. In the most reasonably-likely worst case
scenario,  our  customers  may not purchase  our  products if their  drilling or
fabricating  equipment  fail to  operate,  we may not be able to access our bank
accounts or make or receive payments and our transportation providers may not be
able to make timely shipments to our customers.

We have developed  certain  contingency plans in order to reduce these risks. As
part of our  contingency  plans,  we would use various  manual  procedures  that
bypass computer  applications.  However,  implementing  these  contingency plans
could have an adverse effect on our liquidity,  financial  condition and results
of operation due to reduced  productivity  and  efficiency  associated  with the
manual procedures.  Some catastrophic  events,  such as the loss of utilities or
the failure of certain  government bodies to function,  are outside of the scope
of our  contingency  plans,  although we anticipate that we would respond to any
catastrophe in a manner  designed to minimize  disruptions in customer  service,
and in full cooperation with our peer providers,  community  leaders and service
organizations.

<TABLE>
<CAPTION>
                           Maverick Tube Corporation
                                and Subsidiaries
                          Consolidated Balance Sheets
                       (In thousands, except share data)

                                                                September 30
                                                        --------------------------
                                                              1999           1998
                                                        -----------      ---------
<S>                                                     <C>              <C>
Assets
Current assets:
   Cash and cash equivalents                            $     1,625      $     748
   Accounts receivable, less allowances of $542
      and $391 in 1999 and 1998, respectively                19,661         15,515
   Inventories                                               54,486         61,685
   Deferred income taxes                                      1,933          1,827
   Income taxes refundable                                    3,739          5,078
   Prepaid expenses and other current assets                  1,469          1,200
Total current assets                                         82,913         86,053

Property, plant and equipment, net                           74,518         69,879
Other assets                                                  2,717            953
                                                        $   160,148      $ 156,885
Liabilities and Stockholders' Equity
Current liabilities:
   Accounts payable                                     $    28,244      $  15,721
   Accrued expenses and other liabilties                      5,929          5,733
   Deferred revenue                                           3,716          3,584
   Current maturities of long-term dbt                          708            653
Total current liabilities                                    38,597         25,691

Long-term debt, less current maturities                       7,518          8,226
Revolving credit facility                                    31,000         27,400
Deferred income taxes                                         3,387          5,505
Commitments and contingencies (Notes 6, 12 and 13)               --             --

Stockholders' Equity:
Preferred stock, $.01 par value; 5,000,000
   authorized shares                                             --             --
Common stock, $.01 par value; 40,000,000
   authorized shares; 15,440,474 and 15,437,474
   shares issued and outstanding in 1999 and 1998,
   respectively                                                 154            154
Additional paid-in capital                                   44,248         44,216
Retained earnings                                            35,244         45,693
                                                             79,646         90,063
                                                        $   160,148      $ 156,885
<FN>
See accompanying notes.
</FN>
</TABLE>
<TABLE>
                           Maverick Tube Corporation
                                and Subsidiaries
                     Consolidated Statements of Operations
                     (In thousands, except per share data)

<CAPTION>
                                                                    Year ended September 30
                                                        -----------------------------------------
                                                              1999           1998           1997
                                                        -----------      ---------      ---------
<S>                                                     <C>              <C>            <C>
        Net sales                                       $   172,417      $ 265,389      $ 291,060
        Cost of goods sold                                  169,562        232,038        252,803
        Gross profit                                          2,855         33,351         38,257

        Selling, general and administrative                  13,703         14,815         13,966
        Start-up costs                                        3,462             --             --
        Income (loss) from operations                       (14,310)        18,536         24,291

        Interest expense                                      1,861          1,731          2,067
        Income (loss) before income taxes                   (16,171)        16,805         22,224

        Provision (benefit) for income taxes                 (5,722)         5,420          7,339
        Net income (loss)                               $   (10,449)        11,385      $  14,885

        Basic earnings (loss) per share                 $      (.68)     $     .74      $     .99

        Diluted earnings (loss) per share               $      (.68)     $     .73      $     .97

<FN>
See accompanying notes.
</FN>
</TABLE>

<TABLE>

                           Maverick Tube Corporation
                                and Subsidiaries
                Consolidated Statements of Stockholders' Equity
                       (In thousands, except share data)

<CAPTION>
                                                                        Common Stock
                                                        -------------------------------------------
                                                                                         Additional
                                                                                          Paid-In       Retained
                                                           Shares           Amount        Capital       Earnings
                                                        -----------         ------       ----------     --------
<S>                                                     <C>                   <C>         <C>            <C>
Balance at September 30, 1996                           $14,944,142           $150        $37,674        $19,423
   Net income                                                    --             --             --         14,885
   Exercise of stock options                                466,832              4          2,482             --
   Tax benefit associated with the exercise
      of non-qualified stock options                             --             --          3,250             --
Balance at September 30, 1997                            15,410,974            154         43,406         34,308
   Net income                                                    --             --             --         11,385
   Exercise of stock options                                 26,500             --            162             --
   Tax benefit associated with the exercise
      of non-qualified stock options                             --             --            648             --
Balance at September 30, 1998                            15,437,474            154         44,216         45,693
   Net loss                                                      --             --             --        (10,449)
   Exercise of stock options                                  3,000             --             19             --
   Tax benefit associated with the exercise
      of non-qualified stock options                             --             --             13             --
Balance at September 30, 1999                           $15,440,474           $154        $44,248        $35,244

<FN>
See accompanying notes.
</FN>
</TABLE>
<TABLE>
                           Maverick Tube Corporation
                                and Subsidiaries
                     Consolidated Statements of Cash Flows
                                 (In thousands)

<CAPTION>
                                                                    Year ended September 30
                                                        -----------------------------------------
                                                              1999           1998           1997
                                                        ------------     ----------     ---------
<S>                                                     <C>              <C>            <C>
Operating activities
Net income (loss)                                       $   (10,449)     $  11,385      $  14,885
Adjustments to reconcile net income (loss) to net
 cash provided by operating activities:
   Depreciation and amortization                              7,355          6,172          5,697
   Deferred income taxes                                     (2,211)         1,161          2,577
   Provision for losses on accounts receivable                  151              3             44
   Loss on sale of equipment                                     --             49             50
   Loss on write-down of software development costs              --          1,605             --
   Changes in operating assets and liabilities:
     Accounts receivable                                     (4,297)        12,196         (9,358)
     Inventories                                              7,199          7,751        (18,812)
     Prepaid expenses and other current assets                1,070         (1,582)            59
     Other assets                                               236           (381)           (67)
     Accounts payable                                        12,523        (15,756)         8,435
     Accrued expenses and other liabilities                     196         (6,881)         5,136
     Deferred revenue                                           132        (12,667)         8,075
Cash provided by operating activities                        11,905          3,055         16,721

Investing activities
  Expenditures for property, plant and equipment            (11,869)       (10,717)        (9,537)
  Expenditures for purchase of production facility               --        (11,464)            --
  Deposit on equipment                                       (2,125)            --             --
  Proceeds from disposals of equipment                           --             30             96
  Collection of notes receivable                                 --             --             18
Cash used by investing activities                           (13,994)       (22,151)        (9,423)

Financing activities
  Proceeds from long-term borrowings and notes               57,600        121,000         92,400
  Principal payments on long-term borrowings and notes      (54,653)      (104,204)       (99,911)
                                                              2,947         16,796         (7,511)
Proceeds from exercise of stock options                          19            162          2,486
Cash provided (used) by financing activities                  2,966         16,958         (5,025)
Increase (decrease) in cash and cash equivalents                877         (2,138)         2,273
Cash and cash equivalents at beginning of year                  748          2,886            613
Cash and cash equivalents at end of year                $     1,625      $     748      $   2,886


Supplemental disclosures of cash flow information:
  Cash paid (received) during the year for:
     Interest (net of amounts capitalized
       of $543, $355 and $268)                          $     1,855     $    1,733      $   2,138
     Income taxes                                       $  (  5,003)    $    6,242      $   4,020


<FN>
See accompanying notes.
</FN>
</TABLE>

1. Summary of Significant Accounting Policies

Principles of Consolidation

The  consolidated  financial  statements  include the accounts of Maverick  Tube
Corporation and its wholly owned subsidiaries  (collectively  referred to as the
Company).  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.

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
        Computer software                 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.

Stock-Based Compensation

As permitted by Statement  of  Financial  Accounting  Standards  (SFAS) No. 123,
"Accounting  for  Stock-Based  Compensation,"  the  Company  follows  Accounting
Principles  Board Opinion No. 25 and related  interpretations  in accounting for
its director and employee stock options.

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.

Earnings (Loss) per Common Share

Effective  December 31, 1997,  the Company  adopted SFAS No. 128,  "Earnings per
Share."  SFAS No. 128  replaced  the  calculation  of primary and fully  diluted
earnings per share with basic and dilutive  earnings per share.  Basic  earnings
per share exclude any dilutive  effects of options.  Diluted  earnings per share
are very similar to the previously  reported  fully diluted  earnings per share.
All  earnings per share  amounts have been  presented  and,  where  appropriate,
restated to conform to the SFAS No. 128 requirements.

The  reconciliation  for  diluted  earnings  (loss)  per share  for years  ended
September 30, 1999, 1998 and 1997 is as follows (in thousands):

                                                  1999      1998      1997
                                               ---------  -------   -------
Average shares outstanding                       15,438    15,437    15,018
Dilutive effect of outstanding stock options         --       127       264
Average shares deemed oustanding                 15,438    15,564    15,282
Net income (loss) used in basic and diluted
   earnings (loss) per share                   $(10,449)  $11,385   $14,885

Business Segments

The Company's 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, standard pipe and cold drawn tubing 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 a fair value.  Management's
estimate of the fair value of long-term debt  obligations is discussed in Note 6
to the consolidated financial statements.

Reclassifications

Certain  amounts in the 1998  financial  statements  have been  reclassified  to
conform with the classifications in the 1999 financial statements with no effect
on previously reported net income or stockholders' equity.

2. Purchase of Equipment and Sale of Stock

On September 3, 1999, the Company  entered into an Asset  Purchase  Agreement to
purchase mill equipment for $11.75  million.  This equipment will be used by the
Company  in  connection  with the  construction  and  equipping  of a new  large
diameter  pipe and  tubing  facility  adjacent  to its  existing  facilities  in
Hickman,  Arkansas.  The Company  estimates that the total cost for this project
will be $40  million.  In  September  1999,  the Company  made a deposit of $2.1
million  on the  equipment  and will be  required  to fund the  remaining  $9.65
million of the purchase price on November 10, 1999. The deposit is nonrefundable
if the seller fulfills its obligations under the agreement.

The Company  funded this project  principally  through the issuance of 2,300,000
shares of its common stock. The original  2,000,000 shares offered to the public
closed on October 6, 1999.  The  underwriters'  overallotment  of 300,000 shares
closed on October 21, 1999.  Total proceeds to the Company from the sale, net of
the underwriting discount and other expenses, are expected to be $34.9 million.

3.  Start-Up Costs

On September 18, 1998, the Company  acquired assets to be used in the production
of cold  drawn  tubular  products  at a  production  facility  in Beaver  Falls,
Pennsylvania  from PMAC, Ltd. for $11,464,000.  The Company  incurred  operating
losses of $3,462,000 in the fiscal year ended  September 30, 1999 related to the
operations at this facility  which had not reached normal  production  capacity.
These  costs  are  comprised  primarily  of  salary  and  related  costs for the
production,  sales and  administrative  personnel prior to the fully  integrated
operation of the facility.  These start-up  costs  increased the net loss of the
Company for fiscal 1999 by $0.14 per share.

4.  Write-Down of Software Developments Costs

During the year ended  September  30,  1998,  the  Company  recorded a charge of
$1,605,000 in selling,  general and administrative expense for the write-down of
certain  software  development  costs  relating  to  information  systems  being
replaced by a new enterprise resource planning system.

5.  Stock Split

On August 1, 1997,  the Company  declared a two-for-one  stock split effected in
the form of a 100 percent  stock  dividend to all  stockholders  of record as of
August 12,  1997.  The dividend  was paid on August 21, 1997 and  increased  the
number of shares outstanding from 7,544,071 to 15,088,142. Approximately $75,000
was transferred from retained  earnings to common stock to record this dividend.
All share and per share  amounts,  including  stock option  information,  in the
accompanying  consolidated  financial  statements  have been restated to reflect
this stock dividend.

6. Long-Term Debt and Revolving Credit Facility

Long-term  debt and  revolving  credit  facility at September  30, 1999 and 1998
consists of the following (in thousands):

                                                                 1999     1998
                                                               -------  -------
Capital  lease  obligation,  secured by property,  plant and
  equipment (net book value $9,390,000 at September 30, 1999);
  payable in monthly installments (including interest at 8.0%)
  of $59,479; final payment due on August 1, 2007              $ 4,176  $ 4,540

Capital lease obligation, secured by property and plant (net
  book value  $6,444,000 at September  30, 1999);  interest of
  7.5%   payable   monthly;   payable  in  monthly   principal
  installments  of   approximately   $20,000  (plus  interest)
  commencing on March 1, 1996; gradually increasing to $31,250
  by year seven and  increasing  to  $240,417  in year  eight;
  final payment due on February 1, 2004                          4,050    4,339

Revolving credit notes,  secured by all accounts receivable,
  inventories  and certain  equipment;  due on  September  30,
  2003;  interest  payable  monthly  at  either  prime  or the
  Eurodollar rate,  adjusted by an interest margin,  depending
  upon certain financial  measurements (7.36% at September 30,
  1999)                                                         31,000   27,400
                                                               -------- --------
                                                                39,226   36,279
Less current maturities                                           (708)    (653)
                                                               -------- --------
                                                               $38,518  $35,626
                                                               ======== ========

The Company's  revolving credit agreement provides for advances up to the lesser
of  $50,000,000  or the  eligible  borrowing  base as  defined  in the  facility
agreement.  In addition,  the Company had an outstanding  letter of credit under
this revolving credit agreement of $350,000 at September 30, 1999 (which expires
in September 2000).  Additional  available borrowings under the credit agreement
at that date were  $15,842,000.  The agreement  includes  restrictive  covenants
relating to levels of funded debt and other financial measurements and restricts
the amount of dividends that can be paid on common stock.  The revolving  credit
agreement  requires  an annual  commitment  fee  based  upon  certain  financial
measurements.

The present  value of future  minimum  lease  payments  under the capital  lease
obligations as of September 30, 1999 is as follows (in thousands):

                                                            Present Value of
                            Total Minimum                    Minimum Lease
                            Lease Payments     Interest        Payments

     2000                       $1,320           $612            $708
     2001                        1,315            555             760
     2002                        1,315            493             822
     2003                        2,711            371           2,340
     2004                        1,959            215           1,744
     Thereafter                  2,113            261           1,852
                               -------         ------          ------
                               $10,733         $2,507          $8,226
                               =======         ======          ======

Property, plant and equipment at September 30, 1999 and 1998 include $18,654,000
and  $18,295,000,   respectively,  under  leases  that  have  been  capitalized.
Accumulated  depreciation  for these assets was  $2,820,000  and  $2,307,000  at
September 30, 1999 and 1998, 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 debt at September 30, 1999 was $39,383,000.

7. Inventories

Inventories  at  September  30,  1999  and 1998  consist  of the  following  (in
thousands):

                         1999            1998

Finished goods        $ 29,309        $ 34,674
Work-in-process          3,011           2,868
Raw materials           10,358          12,042
In-transit materials     6,867           7,003
Storeroom parts          4,941           5,098
                      --------        --------
                      $ 54,486        $ 61,685
                      ========        ========

Finished goods at September 30, 1999 and 1998 include $3,560,000 and $3,538,000,
respectively, of customer-obligated inventory.

8. Property, Plant and Equipment

Property,  plant and  equipment  at  September  30, 1999 and 1998 consist of the
following (in thousands):


                                        1999            1998
                                     ---------       ---------
Land                                 $  1,520        $  1,520
Land and leasehold improvements         2,015           1,132
Buildings                              24,256          23,392
Transportation equipment                1,376           1,356
Machinery and equipment                76,188          70,859
Computer software                       5,252             675
Furniture and fixtures                  3,033           2,838
                                     --------        --------
                                     $113,640        $101,772
Less accumulated depreciation         (39,122)        (31,893)
                                     --------        --------
                                     $ 74,518        $ 69,879
                                     ========        ========

9. Income Taxes

The  components of the provision  (benefit) for income taxes for the years ended
September 30, 1999, 1998 and 1997 are as follows (in thousands):


                    1999      1998     1997
                 --------   ------   ------
Current:
  Federal        $(3,399)   $4,120   $3,804
  State             (112)      139      958
Deferred          (2,211)    1,161    2,577
                 --------   ------   ------
                 $(5,722)   $5,420   $7,339
                 ========   ======   ======

The difference between the effective income tax rate and the U.S. federal income
tax rate for the years ended  September 30, 1999,  1998 and 1997 is explained as
follows (in thousands):

                                                       1999      1998     1997
                                                     --------   -------  -------
Provision (benefit) at statutory tax rate            $(5,660)   $5,714   $7,845
State and local taxes, net of federal tax benefit       (112)      139      958
Alternative minimum tax                                   --        --     (510)
Decrease in valuation allowance                           --        --   (1,147)
Benefit of foreign sales corporation                      --      (354)      --
Other items                                               50       (79)     193
                                                     --------   -------  -------
                                                     $(5,722)   $5,420   $7,339
                                                     ========   =======  =======

The  1997  decrease  in  the  valuation   allowance  relates  primarily  to  the
utilization of alternative minimum tax credit carryforwards.

Temporary  differences which give rise to deferred tax assets and liabilities at
September 30, 1999 and 1998 are as follows (in thousands):

                                                      1999       1998
                                                    --------   --------
Deferred tax assets:
   Various accrued liabilities and reserves         $ 1,835    $ 1,280
   Net operating loss carryforwards                   4,132        818
   Alternative minimum tax carryforwards              2,541        598
   Tax benefit associated with the exercise of
      non-qualified stock options                        13         --
                                                    --------   --------
                Total deferred tax assets             8,521      2,696
Deferred tax liabilities:
   Accelerated depreciation                           6,777      5,712
   Asset valuations                                   3,198        662
                                                    --------   --------
                Total deferred tax liabilities        9,975      6,374
                                                    --------   --------
                Net deferred tax liabilities        $(1,454)   $(3,678)
                                                    ========   ========

The Company has  available  net operating  loss  carryforwards  of $2,320,000 at
September  30, 1999 which were  acquired  in prior years and expire in 2000.  In
addition,  the Company has $8,611,000 of net operating loss carryforwards  which
were generated  during fiscal 1999 and expire in 2019. In 2000, all of these net
operating  loss  carryforwards  can be  utilized to offset  financial  statement
earnings  after  temporary  differences.  At September 30, 1999, the Company had
alternative minimum tax credit  carryforwards of $2,541,000 available for income
tax purposes. These credit carryforwards do not expire.

Realization  of the Company's net operating loss  carryforwards  which expire in
2000 is dependent on  generating  approximately  $3.0 million of taxable  income
during  fiscal 2000 as a result of normal  operations or the adoption of certain
available  tax  planning  strategies.   Although  realization  is  not  assured,
management  believes it is more likely than not that the net deferred tax assets
will be realized.

10. Defined Contribution Plans

The Company  sponsors a 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, 1999, 1998
and 1997 of $691,000, $704,000 and $590,000, respectively.

The Company also began  sponsoring  two  deferred  compensation  plans  covering
officers  and key  employees  in  1996.  One  plan  provides  for  discretionary
contributions based solely upon the Company's profitability and the individuals'
gross wages. The other plan provides for fixed contributions to certain officers
of the  Company.  The  Company  contribution  to these plans for the years ended
September  30,  1999,  1998  and  1997  was  $60,000,   $310,000  and  $200,000,
respectively.

11. Segment Information

The following table sets forth data for the years ended September 30, 1999, 1998
and 1997 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.

                                  Energy    Industrial
                                 Products    Products     Corporate      Total
1999:

Net sales                        $101,864     $70,553      $    --     $172,417

Operating loss                    (10,628)     (3,682)(1)       --      (14,310)

Identifiable assets                93,238      49,392       17,518      160,148

Depreciation and amortization       4,812       2,019          524        7,355

Capital expenditures                2,963       4,233        4,673       11,869

1998:

Net sales                        $184,824     $80,565      $    --     $265,389

Operating income (loss)            14,680       5,461       (1,605)(2)   18,536

Identifiable assets                99,357      46,095       11,433      156,885

Depreciation and amortization       4,255       1,448          469        6,172

Capital expenditures                7,512      12,186        2,483       22,181

1997:

Net sales                        $223,879     $67,181      $    --     $291,060

Operating income                   17,641       6,650           --       24,291

Identifiable assets               116,433      34,565       11,066      162,064

Depreciation and amortization       3,760       1,455          482        5,697

Capital expenditures                8,385         363          789        9,537

(1)  During the year ended  September 30, 1999, the Company  incurred  operating
     losses  of  $3,462,000  related  to the  operations  of its  Beaver  Falls,
     Pennsylvania facility which has not reached normal production capacity.

(2)  During the year ended September 30, 1998, the Company  recorded a charge of
     $1.6 million in selling,  general and administrative expense for the write-
     down of certain  software  develop-  ment  costs  relating  to  information
     systems being replaced by a new enterprise resource planning system.

     Transactions  with two  significant  energy  customers  for the years ended
     September  30, 1999 and 1997  represented  approximately  26 percent and 25
     percent of total sales,  respectively.  Transactions  with one  significant
     energy  customer  for  the  year  ended  September  30,  1998   represented
     approximately 14 percent of total sales.


12. 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,
1999 (in thousands):

     2000            $ 3,350
     2001              2,911
     2002              2,105
     2003              1,976
     2004              2,216
                     -------
                     $12,558
                     =======

Rent expense for all operating leases was $2,715,000,  $1,937,000 and $1,222,000
for the years ended September 30, 1999, 1998 and 1997, respectively.

13. 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.

14. Stock Option Plans

The Company  sponsors two  employee  stock option plans (the "1990 Plan" and the
"1994 Plan")  allowing  for  incentive  stock  options and  non-qualified  stock
options.  The Company also  sponsors a stock option plan for eligible  directors
(the "Director Plan") allowing for non-qualified  stock options.  The 1990 Plan,
1994 Plan and Director Plan provide that 340,000,  1,000,000 and 200,000 shares,
respectively, may be issued under the plans at an option price not less than the
fair market value of the stock at the time the option is granted. The 1990 Plan,
1994 Plan and Director Plan expire in December 2000,  November 2004 and November
1999, respectively. The options vest pursuant to the schedule set forth for each
option.  In general,  the options issued under the Director Plan vest six months
from the date of grant and the options issued under the 1990 and 1994 Plans vest
ratably over  periods  ranging  from three to five years.  Effective  August 29,
1997, the Compensation  Committee of the Board of Directors removed the exercise
restriction  with respect to certain  options  granted in 1995,  which made them
immediately  exercisable.  At September  30, 1999 and 1998,  156,500 and 502,500
shares were available for grant under all of the option plans.

The Company  grants stock  options for a fixed number of shares to directors and
employees  with an  exercise  price equal to the fair value of the shares at the
time of the grant.  Accordingly,  the  Company has not  recognized  compensation
expense  for any of its stock  option  grants.  If the  Company  had  elected to
recognize  compensation  cost based on the fair value of the options  granted at
the grant date as  prescribed  by SFAS No. 123,  net income  (loss) and earnings
(loss) per share would have been reduced (or increased) to the pro forma amounts
in the table below. The fair value of the options granted in 1999, 1998 and 1997
was determined to be $1,693,000,  $1,101,000 and $67,000,  respectively. For the
purposes of these pro forma disclosures, the estimated fair value of the options
is recognized as compensation expense over the options' vesting period.

                                          1999            1998            1997
                                       ---------        --------        --------
Pro Forma

   Net income (loss) (in thousands)    $(10,972)        $10,948         $14,719

   Basic earnings (loss) per share        $(.71)           $.71            $.98

   Diluted earnings (loss) per share      $(.71)           $.70            $.96

The  compensation  expense  associated  with  the  fair  value  of  the  options
calculated  in  1999,  1998 and 1997 is not  necessarily  representative  of the
potential effects on reported net income (loss) in future years.

The fair value of the options granted was estimated at the date of grant using a
Black-Scholes   option  pricing  model  with  the  following   weighted  average
assumptions  for the fiscal  years  ended  September  30,  1999,  1998 and 1997,
respectively:  risk-free  interest rate of 4.81%,  5.57% and 5.53%;  no dividend
payments  expected;  volatility  factors  of the  expected  market  price of the
Company's  common  stock of  0.613,  0.555 and  0.478;  and a  weighted  average
expected life of the options of 8.4 years, 7.2 years and 1.0 year.

The Black-Scholes option valuation model was developed for use in estimating the
fair value of traded  options which have no vesting  restrictions  and are fully
transferable.  In  addition,  option  valuation  models  require  the  input  of
subjective  assumptions  including the expected stock price volatility.  Because
the Company's stock options have  characteristics  significantly  different from
those of traded options and because changes in the subjective input  assumptions
can materially  affect the fair value  estimate,  in management's  opinion,  the
existing models do not necessarily provide a reliable single measure of the fair
value of its stock options.

The following table summarizes option activity and related information for years
ended September 30, 1999, 1998 and 1997:

                                                    Weighted       Weighted
                                  Shares Under       Average        Average
                                     Option      Exercise Price   Fair Value
        Options outstanding at
           October 1, 1996           872,000          $5.39
        Options exercised           (466,832)          5.33
        Options expired               (3,000)          5.92
        Options granted               37,500           8.50          $1.80
        Options outstanding at
           September 30, 1997        439,668           5.71
        Options exercised            (26,500)          6.13
        Options expired              (60,000)          5.31
        Options granted              125,000          15.11          $8.80
        Options outstanding at
           September 30, 1998        478,168           8.20
        Options expired               (5,000)          7.13
        Options exercised             (3,000)          6.46
        Options granted              351,500           6.96          $4.82
        Options outstanding at
           September 30, 1999        821,668          $7.68

The following table summarizes information about fixed stock options outstanding
at September 30, 1999:
<TABLE>
<CAPTION>

                            Options Outstanding                     Options  Exercisable
Range of                     Weighted Average      Weighted                   Weighted
Exercise                        Remaining          Average                     Average
Prices             Options   Contractual Life   Exercise Price    Options   Exercise Price
<S>                <C>           <C>                <C>           <C>           <C>
$4.00 to $5.88     167,000       5.1 years          $ 4.58         57,000       $ 5.70
$5.92 to $8.50     529,668       6.1                $ 6.90        228,168       $ 6.61
$11.38 to $21.75   125,000       7.2                $15.11         45,000       $21.75
$4.00 to $21.75    821,668       5.9                $ 7.68        330,168       $ 8.51
</TABLE>

15. Shareholder Rights Plan

In  July  1998,  the  Company's  Board  of  Directors  adopted  a  common  stock
shareholder  rights plan ("Right") which entitles each  shareholder of record to
receive a dividend  distribution  of common stock upon the occurrence of certain
events. The Right becomes exercisable the day that a public announcement is made
that a person or group of  affiliated or  associated  persons has  acquired,  or
obtained  the  right  to  acquire,  beneficial  ownership  of 20% or more of the
outstanding  shares of common stock, or the tenth day following the commencement
of a tender  offer or  exchange  offer that would  result in a person or a group
becoming  the  beneficial  owners  of 20% or more of such  outstanding  share of
common stock. When exercisable,  each Right entitles the holder to purchase $100
worth of the  Company's  common  stock for $50.  Until a Right is  exercised  or
exchanged,  the  holder  thereof  will have no rights  as a  shareholder  of the
Company,  including,  without  limitation,  the right to receive dividends.  The
Right is subject to redemption by the Company's  Board of Directors for $.01 per
Right at any time prior to the date which a person or group acquires  beneficial
ownership of 20% or more of the Company's common stock or subsequent  thereto at
the option of the Board of Directors. The Rights expire July 23, 2008.

16. Quarterly Financial Data (Unaudited)

The  results  of  operations  by quarter  for 1999 and 1998 were as follows  (in
thousands):

                                               Quarter Ended

                             December 31,   March 31,   June 30,   September 30,
                                 1998          1999       1999         1999

Net sales                       $41,388     $34,126     $42,896     $54,007
Gross profit (loss)                 745 (1)    (854)        473       2,491
Net loss                         (2,364)(2)  (3,688)(2)  (2,637)(2)  (1,760)(2)
Basic and diluted loss per share   (.15)(2)    (.24)(2)    (.17)(2)    (.11)(2)


                                               Quarter Ended

                             December 31,   March 31,   June 30,   September 30,
                                 1997          1998       1998         1998

Net sales                       $86,479     $70,548     $56,590     $51,773
Gross profit                     13,774      10,329       5,671       3,578
Net income (loss)                 6,570       4,707       1,330      (1,221)(3)
Basic earnings (loss) per share     .43         .30         .09        (.08)(3)
Diluted earnings (loss) per share   .42         .30         .09        (.08)(3)

(1)  Gross  profit for the three  months  ended  December  31,  1998  includes a
     $707,000  ($451,000  after tax effect or $.03 per share) charge to earnings
     for the reduction in carrying value of finished goods inventory,  primarily
     related  to a  decline  in  the  selling  prices  of the  Company's  energy
     products.

(2)  Net loss for the quarters ended December 31, 1998, March 31, 1999, June 30,
     1999 and September  30, 1999 included  charges for the start-up of the cold
     drawn  tubular  production  facility of  $719,000,  $952,000,  $825,000 and
     $966,000, respectively ($460,000, $609,000, $528,000 and $618,000 after tax
     effect or $0.03, $0.04, $0.03 and $0.04 per share, respectively).

(3)  During the quarter ended September 30, 1998, the Company  recorded a pretax
     charge of $1.6 million ($1.1 million after tax effect or $.07 per share) in
     selling,  general and administrative  expense for the write-down of certain
     software  development costs relating to information  systems being replaced
     by a new enterprise resource planning system.
<PAGE>

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  subsidiaries as of September 30, 1999 and 1998, and the related
consolidated statements of operations,  stockholders' equity, and cash flows for
each of the three years in the period ended September 30, 1999.  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  subsidiaries at September 30, 1999 and 1998, and
the  consolidated  results of their  operations and their cash flows for each of
the three years in the period ended  September  30,  1999,  in  conformity  with
generally accepted accounting principles.

                                                /s/ ERNST & YOUNG LLP


St. Louis, Missouri
October 29, 1999