# UNITED STATES

# SECURITIES AND
EXCHANGE COMMISSION

# Washington, D.C. 20549

# FORM 10-Q

(Mark One)

xx  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For
the quarterly period ended September 30, 2004

TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________________________ to ______________________

Commission File Number
1-448

# Mestek, Inc.

(Exact name of
registrant as specified in its charter)

|Pennsylvania                                                   | 25-0661650
|-------------------------------------------------------------- | ----------
|(State or other jurisdiction of incorporation or organization) |           

|260 North Elm Street, Westfield, MA      | 01085
|---------------------------------------- | -----
|(Address of principal executive offices) |      

413-568-9571

Registrants
telephone number, including area code

None

(Former
name, former address and former fiscal year, if changed since last report)

Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes xx No

Indicate
by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of
the Exchange Act).

Yes No xx

The
number of shares of the registrants common stock issued and outstanding as of
November 8, 2004 was 8,600,103.

Indicate
by check mark whether the registrant has filed all documents and reports required to be
filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the
distribution of securities under a plan confirmed by a court.

Yes     No    N/A

---

# MESTEK, INC.

# QUARTERLY REPORT ON
FORM 10-Q

# FOR THE THREE MONTHS
ENDED SEPTEMBER 30, 2004

# INDEX

|PART I - FINANCIAL INFORMATION                                          | Page No.
|----------------------------------------------------------------------- | --------
|
|Item 1 - Financial Statements                                           |         
|Condensed consolidated balance sheets at September 30, 2004 (unaudited) |         
|and December 31, 2003                                                   |         
|Condensed consolidated statements of operations for the three months    |         
|ended September 30, 2004 and 2003 and the nine months ended             |         
|September 30, 2004 and 2003 (unaudited)                                 |         
|Condensed consolidated statements of cash flows for the nine            |         
|months ended September 30, 2004 and 2003 (unaudited)                    |         
|Condensed consolidated statement of changes in shareholders' equity     |         
|for the period from January 1, 2003 through                             |         
|September 30, 2004 (unaudited)                                          |         
|Notes to the condensed consolidated financial statements (unaudited)    |         
|Item 2 - Management's Discussion and Analysis of Financial Condition    |         
|and Results of Operations                                               |         
|Item 3 - Quantitative and Qualitative Disclosures                       |         
|Item 4 - Controls and Procedures                                        |         
|PART II - OTHER INFORMATION                                             |         
|Item 1 - Legal Proceedings                                              |         
|Item 2 - Changes in Securities and Use of Proceeds                      |         
|Item 6 - Exhibits and Reports on Form 8-K                               |         
|SIGNATURE                                                               |         
|                                                                        |         

In
the opinion of management, the information contained herein reflects all adjustments
necessary to make the results of operations for the interim periods a fair statement of
such operations.  All such adjustments are of a normal recurring nature.

---

# PART I - FINANCIAL
INFORMATION

Item 1 - Financial
Statements

# MESTEK, INC.
                                       CONDENSED CONSOLIDATED BALANCE SHEETS

|                                         | Sept. 30, | Dec. 31,
|---------------------------------------- | --------- | --------
|
|
|
|ASSETS                                   |           |         
|Current Assets                          
|Cash                                     | $10,577   | $10,273 
|Accounts Receivable - less allowances of
|$3,149 and $3,230 respectively           | 64,395    | 54,285  
|Inventories                              | 64,774    | 55,194  
|Deferred Tax Asset                       | 21,739    | 21,916  
|Other Current Assets                     | 12,881    | 10,812  
|Total Current Assets                     | 174,366   | 152,480 
|Property and Equipment - net             | 58,572    | 62,034  
|Property Held For Sale                   | 1,667     | 1,667   
|Other Assets and Deferred Charges - net  | 8,246     | 9,882   
|Goodwill                                 | 20,585    | 20,607  
|Total Assets                             | $263,436  | $246,670

See the Notes to Condensed
Consolidated Financial Statements(Continued on next page)

---

# MESTEK, INC.

# CONDENSED CONSOLIDATED
BALANCE SHEETS (continued)

|                                                | Sept. 30,  | Dec. 31,  
|----------------------------------------------- | ---------- | ----------
|
|
|
|LIABILITIES AND SHAREHOLDERS' EQUITY            |            |           
|Current Liabilities                            
|Short-Term Notes Payable                        | $   18,291 | $   17,467
|Current Portion of Long-Term Debt               | 676        | 596       
|Accounts Payable                                | 18,277     | 18,273    
|Accrued Compensation                            | 8,608      | 8,377     
|Accrued Commissions                             | 1,747      | 2,433     
|Reserves for Investment Losses                  | 4,000      | 6,000     
|Customer Deposits                               | 9,616      | 9,586     
|Accrued Employee Benefits                       | 8,832      | 8,798     
|Liabilities Subject to Compromise               | 54,253     | 57,359    
|Other Accrued Liabilities                       | 16,236     | 15,544    
|Total Current Liabilities                       | 140,536    | 144,433   
|Long-Term Debt                                  | 7,483      | 4,386     
|Pension Obligations                             | 984        | 967       
|Other Liabilities                               | 81         | 256       
|Total Liabilities                               | 149,084    | 150,042   
|Minority Interests                              | 1,122      | 1,155     
|Shareholders' Equity                           
|Common Stock - no par, stated value $0.05      
|per share, 9,610,135 shares issued              | 479        | 479       
|Paid in Capital                                 | 15,434     | 15,434    
|Retained Earnings                               | 110,406    | 90,631    
|Treasury Shares, at cost (1,010,032 and 888,532
|common shares, respectively)                    | (12,105)   | (10,101)  
|Other Comprehensive Loss                        | (984)      | (970)     
|Total Shareholders' Equity                      | 113,230    | 95,473    
|Total Liabilities and Shareholders' Equity      | $263,436   | $246,670  

See the Notes to Condensed
Consolidated Financial Statements.

---

# MESTEK, INC.

# CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS

# (Unaudited)

|                                                      | Three Months Ended |          | Nine Months Ended |          
|----------------------------------------------------- | ------------------ | -------- | ----------------- | ---------
|
|
|
|Net Sales (Note 1)                                    | $ 103,007          | $ 98,024 | $ 296,123         | $ 273,511
|Cost of Goods Sold                                    | 73,592             | 69,169   | 211,558           | 195,103  
|Gross Profit                                          | 29,415             | 28,855   | 84,565            | 78,408   
|Selling Expense                                       | 13,627             | 13,180   | 41,147            | 38,834   
|General and Administrative Expense                    | 6,444              | 6,370    | 17,613            | 17,482   
|Engineering Expense                                   | 4,290              | 3,964    | 12,692            | 11,507   
|Plant Shutdown Expense                                | 115                | 149      | 970               | 860      
|Environmental Litigation/Remediation (income) expense | (18,415)           | 16,709   | (17,728)          | 33,947   
|Operating Profit (Loss) before Reorganization Items   | 23,354             | (11,517) | 29,871            | (24,222) 
|Subsidiary Bankruptcy Professional Fees               | 1,519              | 2,595    | 8,542             | 2,595    
|Operating Profit (Loss)                               | 21,835             | (14,112) | 21,329            | (26,817) 
|Interest Income (Expense) - net                       | (215)              | (203)    | (639)             | (470)    
|Other Income (Expense) - net                          | 2,494              | (11)     | 2,495             | (170)    
|Income (Loss) Before Income Taxes                     | 24,114             | (14,326) | 23,185            | (27,457) 
|Income Taxes Provision (Benefit)                      | 3,550              | (4,854)  | 3,410             | (9,318)  
|Net Income (Loss)                                     | $20,564            | ($9,472) | $19,775           | ($18,139)
|Basic Earnings (Loss) Per Common Share:              
|Net Income (Loss)                                     | $2.39              | ($1.09)  | $2.28             | ($2.08)  
|Basic Weighted Average Shares Outstanding             | 8,604              | 8,722    | 8,678             | 8,722    
|Diluted Earnings (Loss) Per Common Share:            
|Net Income (Loss)                                     | $2.38              | ($1.09)  | $2.28             | ($2.08)  
|Diluted Weighted Average Shares Outstanding           | 8,622              | 8,722    | 8,684             | 8,722    

See the Notes to Condensed
Consolidated Financial Statements.

---

# MESTEK, INC.

# CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS

# (Unaudited)

|                                                                      | Nine Months Ended |          
|--------------------------------------------------------------------- | ----------------- | ---------
|
|
|
|Cash Flows from Operating Activities:                                 |                   |          
|Net Income (Loss)                                                     | $19,775           | ($18,139)
|Adjustments to Reconcile Net Income to Net Cash                      
|Provided by Operating Activities:                                    
|Depreciation and Amortization                                         | 5,236             | 6,396    
|Provision for Losses on Accounts Receivable (net)                     | (363)             | 471      
|Subsidiary Bankruptcy Professional Fees                               | 8,542             | 2,595    
|Changes in Assets and Liabilities:                                   
|Accounts Receivable                                                   | (9,747)           | (7,607)  
|Inventory                                                             | (9,580)           | 3,511    
|Accounts Payable                                                      | 4                 | (1,813)  
|Reduction in Reserve for Investment Losses                            | 2,000             | ---      
|Accrued Expenses/Other Liabilities                                    | (3,334)           | (5,793)  
|Liabilities Subject to Compromise                                     | (3,106)           | 40,501   
|Environmental Litigation/Remediation Reserves                         | ---               | (8,700)  
|Other Assets                                                          | (379)             | (8,873)  
|Net Cash Provided by Operating Activities Before Reorganization Items | 9,048             | 2,549    
|Operating Cash Flows from Reorganization Items:                      
|Subsidiary Bankruptcy Professional Fees                               | (8,542)           | (2,595)  
|Change in Accrued Expense                                             | (503)             | 1,947    
|Net Cash Used by Reorganization Items                                 | (9,045)           | (648)    
|Net Cash Provided by Operating Activities                             | 3                 | 1,901    
|Cash Flows from Investing Activities:                                
|Capital Expenditures                                                  | (1,629)           | (5,582)  
|Acquisition of Business                                               | ---               | (6,921)  
|Net Cash Used in Investing Activities                                 | (1,629)           | (12,503) 
|Cash Flows from Financing Activities:                                
|Issuance of Long-Term Debt                                            | 3,720             | ---      
|Net Borrowings Under Revolving Credit Agreements                      | 825               | 12,439   
|Principal Payments Under                                             
|Long-Term Debt Obligations                                            | (544)             | (285)    
|Common Stock Repurchased (net)                                        | (2,004)           | ---      
|Increase (Decrease) in Minority Interests                             | (33)              | 36       
|Net Cash Used In Financing Activities                                 | 1,964             | 12,190   
|Translation Effect on Cash                                            | (34)              | 964      
|Net Increase in Cash and Cash Equivalents                             | 304               | 2,552    
|Cash and Cash Equivalents - Beginning of Period                       | 10,273            | 2,675    
|Cash and Cash Equivalents - End of Period                             | $10,577           | $5,227   

See the Notes to Condensed
Consolidated Financial Statements.

---

# MESTEK, INC.

# CONDENSED CONSOLIDATED
STATEMENT OF

# CHANGES IN
SHAREHOLDERS EQUITY

# 

# For the period January
1, 2003 through September 30, 2004                                               (dollars
in thousands)

|                                          | Common
Stock | Paid In
Capital | Retained
Earnings | Treasury
Shares | Accumulated
Other
Comprehensive
Loss | Total    
|----------------------------------------- | ------------ | --------------- | ----------------- | --------------- | ------------------------------------ | ---------
|Balance -January 1, 2003                  | $479         | $15,434         | $ 133,796         | ($ 10,101)      | ($  1,894)                           | $ 137,714
|Net Loss                                  | ---          | ---             | (43,165)          | ---             | ---                                  | (43,165) 
|Additional Minimum Liability             
|Defined Benefit Plan--Net of Tax          | ---          | ---             | ---               | ---             | (247)                                | (247)    
|Cumulative Translation Adjustment         | ---          | ---             | ---               | ---             | 1,171                                | 1,171    
|Net Comprehensive (Loss)                  | ---          | ---             | ---               | ---             | ---                                  | (42,241) 
|Balance - December 31, 2003               | 479          | 15,434          | 90,631            | (10,101)        | (970)                                | 95,473   
|Net Income (Loss)                         | ---          | ---             | 19,775            | ---             | ---                                  | 19,775   
|Unrealized Gain (Loss) on Derivatives    
|Contract (net of related tax benefit) --- | ---          | ---             | ---               | ---             | (20)                                 | (20)     
|Common Stock Repurchased net              | ---          | ---             | ---               | (2,004)         | ---                                  | (2,004)  
|Cumulative Translation Adjustment         | ---          | ---             | ---               | ---             | (34)                                 | (34)     
|Balance - September 30, 2004 (unaudited)  | $479         | $15,434         | $110,406          | ($12,105)       | ($984)                               | $113,230 

See the Notes to
Condensed Consolidated Financial Statements

---

# MESTEK, INC.

# NOTES TO THE CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS

# (Unaudited)

# Note 1 
Significant Accounting Policies

# Basis of Presentation

The
Condensed Consolidated Financial Statements include the accounts of Mestek, Inc. (Mestek)
and its majority owned subsidiaries (collectively the Company). The financial
statements as reported in Form 10-Q reflect all adjustments, including those of a normal
recurring nature, which are, in the opinion of management, necessary to present a fair
statement of results for the three- and nine-month period ended September 30, 2004 and
2003.

These
financial statements should be read in conjunction with the Annual Report on Form 10-K,
and in particular the audited financial statements, for the fiscal year ended December 31,
2003. Accordingly, Note disclosures that would substantially duplicate the disclosures
contained in the latest audited financial statements have been omitted from this filing.

# Earnings per Common Share

Basic
earnings per share have been computed using the weighted average number of common shares
outstanding. Common stock options are considered in the computation of diluted earnings
per share except when the effect would be antidilutive.

# Stock-Based Compensation

The
Company has elected to account for stock-based compensation, effective with fiscal 2003,
in accordance with Statement of Financial Accounting Standards (FAS) No. 148,
under the fair value method. The Company has further elected to account for
the change in accounting principle under the Prospective Method as described
in amended paragraph 52b of FAS No. 123. The Company made no option grants, modifications
of option grants, or settlement of option grants in either the three-month or nine-month
periods ended September 30, 2004 or the three-month or nine-month periods ended September
30, 2003 and, accordingly, the change to the fair value method had no effect in either
period on Net Income, Basic Earnings Per Share or Diluted Earnings Per Share. Under the
Prospective Method any future option grants will affect Net Income, Basic
Earnings Per Share and Diluted Earnings Per Share.

In
September 2004, the Company granted 3,000 unrestricted common shares to certain executives
of the Company. The shares were treated as re-issued treasury shares for accounting
purposes and were charged to compensation at fair value as of that date which approximated
$51,000.

With
respect to stock-based compensation granted prior to fiscal 2003, the Company follows the
provisions of Statement of Financial Accounting Standards No. 123, Accounting for
Stock-Based Compensation, (FAS No. 123). As permitted by the statement, the
Company has chosen to continue to account for stock-based compensations using the
intrinsic value method as prescribed by Accounting Principles Board (APB)
Opinion No. 25. Accordingly, no compensation expense has been recognized for its
stock-based compensation plan.

Had
the fair value method of accounting been applied to the Companys stock
option plan, with compensation cost for the Plan determined on the basis of the fair value
of the options at the grant date, the Companys net loss and loss per share would not
have been materially different.

# Income Taxes

Deferred
tax assets and liabilities are recognized for the future tax consequences attributable to
differences between the financial statement carrying amounts of existing assets and
liabilities and their respective tax bases. Deferred tax assets and liabilities are
measured using enacted tax rates expected to apply to taxable income in the years in which
those temporary differences are expected to be recovered or settled. The effect on
deferred tax assets and liabilities of a change in tax rates is recognized in income in
the period that includes the enactment date. Income Tax Provision, as a percentage of
pretax income, was 14.8% in the three months ended September 30, 2004, reflecting one time
tax benefits associated with the net costs of the Met-Coil bankruptcy. Income tax
(benefit), as a percentage of pretax income, for the three months ended September 30, 2003
was 33.8% reflecting limitations in certain states on the utilization of tax losses which
diminish the effective rate associated with the income tax benefits recorded in relation
to the tax losses. Cash (received) paid for income taxes was ($3,928,000) and $1,317,000
during the nine-months ended September 30, 2004 and 2003, respectively.

# Other Comprehensive
Income (Loss)

For
the three- and nine-months ended September 30, 2004 and 2003, respectively, the components
of other comprehensive loss consisted of foreign currency translation adjustments, and, in
the 2004 period, charges and credits related to a hedge transaction interest
rate swap entered into in February of 2004, as more fully explained in Note 3 to these
Condensed Consolidated Financial Statements. Other Comprehensive income (loss) was
$215,000 and ($101,000), for the three months ended September 30, 2004 and 2003,
respectively and ($14,000) and ($964,000), for the nine-months ended September 30, 2004
and 2003, respectively.

# Reclassifications and
Adjustments

Reclassifications
are made periodically to previously issued financial statements to conform to the current
year presentation. Net Sales and Cost of Goods Sold for the 2003 periods have been
adjusted to correct the prior year  treatment of certain intercompany sales in the
Metal Forming Segment to conform with the 2004 presentation. Accordingly, Net Sales and
Cost of Goods sold were increased by $765,000 for the three month period ended September
30, 2003 and $3,138,000 for the nine month period ended September 30, 2003, with no effect
on gross profit or net income in either period.

# New Accounting
Pronouncements

In
July 2002, the Financial Accounting Standards Board (FASB) issued FAS No. 146,
Accounting for Costs Associated with Exit or Disposal Activities, which relates to
accounting for plant shutdowns, restructuring and other such costs. FAS No. 146 is based
on the fundamental principle that a liability for a cost associated with an exit or
disposal activity should be recorded when it (1) is incurred, that is, when it meets the
definition of a liability in FASB Concepts Statement No. 6, Elements of Financial
Statements, and (2) can be measured at fair value. The principal reason for issuing FAS
No. 146 is the FASBs belief that some liabilities for costs associated with exit or
disposal activities that entities record under current accounting pronouncements, in
particular Emerging Issues Task Force (EITF) Issue 94-3, do not meet the
definition of a liability. FAS No. 146 nullifies EITF Issue 94-3; thus, it will have a
significant effect on practice because commitment to an exit or disposal plan no longer
will be a sufficient basis for recording a liability for costs related to those
activities. FAS No. 146 is effective for exit and disposal activities initiated after
December 31, 2002. The Company announced the shutdown of two manufacturing facilities in
April 2003, as more fully described in Note 6, and is accounting for the related costs,
including costs incurred in the three month period ended March 31, 2004 in accordance with
FAS No. 146.

In
January 2003, FASB issued FASB Interpretation No. 46, Consolidation of Variable
Interest Entities(FIN 46). FIN 46 requires a variable interest entity to
be consolidated by a company if that company is subject to a majority of the risk of loss
from the variable interest entitys activities or entitled to receive a majority of
the entitys residual returns, or both. FIN 46 also requires disclosures about
variable interest entities that a company is not required to consolidate, but in which it
has a significant variable interest. The consolidation requirements of FIN 46 apply
immediately to variable interest entities created after January 31, 2003. The Company has
concluded that its investment in CareCentric, Inc. (CareCentric), which is
described in more detail in Note 6 to the Companys 2003 financial statements, is not
subject to consolidation under the requirements of FIN 46.

Except
as disclosed in Note 6 of the Companys Annual Report on Form 10-K for the period
ended December 31, 2003, the Companys various investments in CareCentric have been
substantially written off in prior years, and all contingent obligations have been fully
reserved for, as reflected in the Companys 2001, 2002, and 2003 and interim 2004
financial statements. Accordingly, there are no potential future investment losses or
other loss contingencies associated with the Companys various investments in
CareCentric.

In
December 2003, FASB issued FAS No. 132R, Employers Disclosures about Pensions and
other Post-retirement Benefits. This Statement revises employers disclosures
about pension plans and other postretirement benefit plans. It does not change the
measurement or recognition of those plans required by FAS No. 87, Employers
Accounting for Pensions, FAS No. 88, Employers Accounting for Settlements and
Curtailments of Defined Benefit Pension Plans and for Termination Benefits, and FAS
No. 106, Employers Accounting for Postretirement Benefits Other Than
Pensions. This Statement retains the disclosure requirements contained in FAS No. 132,
Employers Disclosures about Pensions and Other Postretirement Benefits, which
it replaces. It requires additional disclosures to those in the original FAS No. 132 about
the assets, obligations, cash flows, and net periodic benefit cost of defined benefit
pension plans and other defined benefit postretirement plans. The Company has adopted the
disclosure provisions of FAS No. 132R. The adoption of this pronouncement did not have a
material effect on the Companys financial position, results of operations or cash
flows.

In
December 2003, the United States Securities and Exchange Commission (SEC)
issued Staff Accounting Bulletin (SAB) No. 104, Revenue Recognition, which
codifies, revises and rescinds certain sections of SAB No. 101, Revenue
Recognition, in order to make this interpretive guidance consistent with current
authoritative accounting and auditing guidance and SEC rules and regulations. The changes
noted in SAB 104 did not have a material effect on the Companys financial position,
results of operations and cash flows.

---

# Note 2  Inventories

|                                          | September 30,
2004
(unaudited) | December 31,
2003
(audited)
|----------------------------------------- | ------------------------------ | ---------------------------
|
|Finished Goods                            | $ 16,939                       | $ 13,866                   
|Work-in-progress                          | 21,145                         | 18,064                     
|Raw materials                             | 37,445                         | 31,269                     
|                                          | 75,529                         | 63,199                     
|Less reserve for LIFO method of valuation | (10,755)                       | (8,005)                    
|                                          | $64,774                        | $55,194                    

---

# Note 3  Debt

|                              | September 30,
2004
(unaudited) | December 31,
2003
(audited)
|----------------------------- | ------------------------------ | ---------------------------
|
|Revolving Loan Agreement      | $ 18,291                       | $ 17,467                   
|Notes Payable                 | 99                             | 211                        
|Note Payable - Sovereign Bank | 3,643                          | ---                        
|Industrial Development Bond   | 4,417                          | 4,771                      
|Total Debt                    | 26,450                         | 22,449                     
|Less Current Maturities       | (18,967)                       | (18,063)                   
|Long Term Debt                | $7,483                         | $4,386                     

Revolving
Loan Agreement  On October 19, 2004, the Company entered into a three year,
$70,000,000, committed, unsecured, multi-bank revolving loan and letter of credit facility
(the Facility), led by Bank of America (successor to Fleet National Bank, the
Companys long-term lender), refinancing the Companys existing $50,000,000
credit facility which would have otherwise matured on October 29, 2004. As with the prior
facility, borrowings under the Facility bear interest, at the Companys election, at
a floating rate based on the lenders prime or base rate or, for short term
borrowings, at a rate based upon the daily British Bankers Association (BBA)
LIBOR rate. The Facility contains affirmative and negative covenants, typical of such
financing transactions, and specific financial covenants which require the Company to
maintain a minimum consolidated net worth, a minimum cash flow coverage ratio and a
maximum cash flow leverage ratio. As of September 30, 2004 (on an unaudited basis) the
Company was in compliance with all of the financial covenants required under the Facility.
Revolving borrowings under the Facility are due and payable in full on the maturity date
of the Facility, which is October 19, 2007. Most of the Companys operating
subsidiaries guaranty the obligations of the Company under the Facility. The Credit
Agreement relating to the Facility also contains restrictions regarding the creation of
indebtedness, the occurrence of mergers or consolidations, the sale of subsidiary stock
and the payment of dividends in excess of 50 percent (50%) of net income. The Company had
outstanding at September 30, 2004, $7,766,000 in standby letters of credit issued
principally in connection with its commercial insurance programs. The Facility was used to
refinance balances outstanding under the Companys existing $50 million revolving
loan and letter of credit facility and to fund the Met-Coil bankruptcy reorganization
plan, as more fully explained in Note 7 below.

Hedge
Transaction  On February 6, 2004, the Company entered into a single interest
rate swap transaction, to effectively fix the Companys 30 day-LIBOR-based, variable
rate interest obligations on a principal amount of $14,000,000 of debt at a rate of 2.87%
for three years.

The
Company entered into this swap transaction to manage interest cost and cash flows
associated with variable interest rates, primarily short-term changes in LIBOR, as changes
in cash flows of the interest rate swap offsets changes in the interest payments on the
covered portion of the Companys revolving credit facility, and based upon the
Companys belief that short term rates will be rising over the next several years.

The
Company is accounting for the interest rate swap under SFAS No. 133, Accounting for
Derivative Instruments and Hedging Activities as amended by SFAS No. 138,
Accounting for Certain Derivative instruments and Certain Hedging Activities. These
statements require that all derivatives be recognized as either assets or liabilities on
the balance sheet at fair value.

Changes
in the fair value of the swap, designated as a cash flow hedge, are reflected as a
component of Other Comprehensive Income (Loss) and reclassified into earnings (interest
expense) in the same period or periods during which the hedged transaction affects
earnings. The derivative instrument is carried at marked-to-market fair value
on the Consolidated Balance Sheet in the applicable line item Other Assets or
Other Liabilities.

In
connection with this interest rate swap transaction, the Company recorded an after-tax
charge of $74,000 in Other Comprehensive Income (Loss) during the quarter ended September
30, 2004 reflecting interest rate fluctuations during this quarter. The Companys
exposure to credit loss on its interest rate swap in the event of nonperformance by the
counterparties is believed to be remote as the Company effected this swap through its
principal bank, Bank of America, requiring that the counterparty have a strong credit
rating.

Industrial
Development Bond  On April 19, 2002, the Companys subsidiary, Boyertown
Foundry Company, Inc. (BFC), borrowed $5,512,490 under a note issued through
the Berks County Industrial Development Authority in Berks County, PA in connection with a
project to upgrade BFCs foundry equipment in Boyertown, PA. The note bearing
interest at 4.93% per annum, matures on April 19, 2012, and is payable in equal monthly
payments of principal and interest over the term of the loan. The note is secured by a
Loan and Security Agreement under which the equipment purchased by BFC with the loan
proceeds is pledged as security for the note. The note is expected to be a Qualified
Small Issue Bond under Section 144 (a)(12) of the Internal Revenue Code, entitling
the holder to tax exempt treatment on the interest. In the event the note is found to be
not in compliance with Section 144 (a)(12), the interest rate on the note may be
increased.

Note
Payable-Sovereign Bank On April 16, 2004, the Companys second tier
subsidiary, Exton Ranch, Inc. (Exton Ranch), borrowed $3,720,000 from
Sovereign Bank, secured by the manufacturing facility owned by Exton Ranch and occupied by
the Companys subsidiary, Omega Flex, Inc. (Omega) in Exton, PA. The loan
bears interest at a LIBOR-based variable rate, payable monthly in arrears. Principal under
the loan is amortized over a 20-year period with a ten-year maturity. The borrower also
has the ability to prepay the loan during the term thereof without penalty. The loan is
secured by a first priority mortgage on the property, and a collateral assignment of
leases, and fixture filing. Exton Ranch is a wholly-owned subsidiary of Omega, the primary
tenant of the building, and Omega guaranteed the payment and performance of the
obligations of Exton Ranch under the various loan agreements.

Cash
Paid for Interest  Cash paid for interest was $785,000 and $398,000 during the
nine months ended September 30, 2004 and 2003, respectively.

---

# Note 4  Interim
Segment Information

# Description of the types
of products and services from which each reportable segment derives its revenues:

The
Company has two reportable segments: the manufacture of heating, ventilating and
air-conditioning equipment (HVAC) and the manufacture of metal handling and metal forming
machinery (Metal Forming).

The
Companys HVAC Segment manufactures and sells a variety of complementary residential,
commercial and industrial heating, cooling and air control and distribution products.
Collectively, the HVAC Segments products provide heating, cooling, ventilating, or
some combination thereof, for residential, commercial and/or industrial building
applications.

The
Metal Forming Segment, operating under the umbrella name Formtek, is comprised
of seven closely related subsidiaries and one division, all manufacturers of equipment
used in the Metal Forming industry (the uncoiling, straightening, leveling, feeding,
forming, bending, notching, stamping, cutting, stacking, bundling or moving of metal in
the production of metal products, such as steel sheets, office furniture, appliances,
vehicles, buildings, and building components, among many others).

HVAC  and
Metal Forming Segments are described in greater detail in Note 14 to the Companys
2003 Consolidated Financial Statements.

Measurement
of segment profit or loss and segment assets:

The
Company evaluates performance and allocates resources based on profit or loss from
operations before interest expense and income taxes (EBIT), not including non-operating
gains and losses. The accounting policies of the reportable segments are the same as those
described in the summary of significant accounting policies. Inter-segment sales and
transfers are recorded at prices substantially equivalent to the Companys cost;
inter-company profits on such inter-segment sales or transfers are not material.

# Factors management used
to identify the enterprises reportable segments:

The factors
which identify the HVAC and Metal Forming Segments as reportable segments are described in
detail in Note 14 to the Companys 2003 Consolidated Financial Statement.

Information
presented in the following tables relates to continuing operations only.

Three Months ended September 30, 2004: (in thousands)

|                                 | HVAC    | Metal
Forming | All
Other | Totals   
|-------------------------------- | ------- | ------------- | --------- | ---------
|Revenues from External Customers | $79,062 | $23,945       | ---       | $103,007 
|Segment Operating Profit (Loss)  | $4,366* | $17,469**     | ---       | $  21,835

* includes $115 in Plant Shutdown
expenses in accordance with FAS 146, as more fully described in Note 6.

** includes $18,415 in insurance
recoveries and other expense reductions related to environmental litigation and
remediation and $1,519 in subsidiary bankruptcy professional fees, all as more fully
explained in Note 7.

Three Months ended September
30, 2003:(in thousands)

|                                     | HVAC    | Metal
Forming | All
Other | Totals   
|------------------------------------ | ------- | ------------- | --------- | ---------
|Revenues from External Customers *** | $81,058 | $16,876       | $90       | $98,024  
|Segment Operating Profit (Loss)      | $6,631* | ($20,598)     | ($145)    | ($14,112)

* includes $149 in Plant Shutdown
expenses in accordance with FAS 146, as more fully described in Note 6.

** includes $16,709 in environmental
litigation and remediation expenses and $2,595 in subsidiary bankruptcy professional fees,
as more fully explained in Note 7.

*** See Note 1.
Reclassification

---

# Nine Months ended
September 30, 2004: (in thousands)

|                                 | HVAC       | Metal
Forming | All
Other | Totals  
|-------------------------------- | ---------- | ------------- | --------- | --------
|Revenues from External Customers | $224,688   | $71,454       | $71       | $296,123
|Segment Operating Profit (Loss)  | $  11,268* | $10,087**     | ($26)     | $21,329 

* includes $970 in Plant Shutdown
expenses in accordance with FAS 146, as more fully described in Note 6.

** includes $17,728 insurance
recoveries and other expense reductions related to environmental litigation and
remediation, and $8,542 in subsidiary bankruptcy professional fees, all as more fully
explained in Note 8

# Nine Months ended
September 30, 2003: (in thousands)

|                                     | HVAC     | Metal
Forming | All
Other  | Totals    
|------------------------------------ | -------- | ------------- | ---------- | ----------
|Revenues from External Customers *** | $219,749 | $53,453       | $ 309      | $ 273,511 
|Segment Operating Profit (Loss)      | $11,609* | ($37,934)     | ($    492) | ($ 26,817)

* includes $860 in Plant Shutdown
expenses in accordance with FAS 146, as more fully described in Note 6.

** includes $33,947 in Environmental
Litigation/Remediation Charges expenses and $2,595 in subsidiary bankruptcy professional
fees, as more fully explained in Note 7.

*** See Note 1.
Reclassification

---

HVAC Segment Revenues by
HVAC Product Group:

|                                      | Three Months ended
September 30, |         | Nine Months ended
September 30, |          
|------------------------------------- | -------------------------------- | ------- | ------------------------------- | ---------
|
|
|Hydronics Products                    | $34,068                          | $35,116 | $  89,358                       | $  87,233
|Air Distribution and Cooling Products | 19,151                           | 22,520  | 62,577                          | 66,512   
|Gas and Industrial Products           | 25,843                           | 23,422  | 72,753                          | 66,004   
|Total HVAC Segment Revenues           | $79,062                          | $81,058 | $224,688                        | $219,749 

Revenues

|                              | Three Months ended
September 30: |         | Nine Months ended
September 30: |         
|----------------------------- | -------------------------------- | ------- | ------------------------------- | --------
|
|
|Total External Revenues       |                                  |         |                                 |         
|for Reportable Segments ***   | $103,007                         | $98,024 | $296,123                        | $273,511
|Inter & Intrasegment Revenues
|for Reportable Segments       | 5,486                            | 4,586   | 14,999                          | 14,522  
|Elimination of               
|Inter & Intrasegment Revenues | (5,486)                          | (4,586) | (14,999)                        | (14,522)
|Total Consolidated Revenues   | $103,007                         | $98,024 | $296,123                        | $273,511

*** See Note 1.
Reclassification

Profit or Loss

|                                     | Three Months ended
September 30: |           | Nine Months ended
September 30: |          
|------------------------------------ | -------------------------------- | --------- | ------------------------------- | ---------
|
|
|Reportable Segments Operating Profit |                                  |           |                                 |          
|(Loss) from Continuing Operations    | $21,835                          | ($14,112) | $21,329                         | ($26,817)
|Interest Expense-Net                 | (215)                            | (203)     | (639)                           | (470)    
|Other Income (Expense) Net           | 2,494                            | (11)      | 2,495                           | (170)    
|(Loss) from Continuing Operations   
|before income taxes                  | $24,114                          | ($14,326) | $23,185                         | ($27,457)

---

# Note 5  Stock
Option Plans

On
March 20, 1996, the Company adopted a stock option plan, the Mestek, Inc. 1996 Stock
Option Plan, (Stock Option Plan), which provides for the granting of options
to purchase 500,000 shares of the Companys common stock which shares are reserved
for among the Companys treasury shares. No options were granted in the third quarter
of 2004.

On
October 27, 2004, the Company re-priced 25,000 options expiring in 2011 from
$23.25 per share to the current market value, $17.85 per share, and 80,000 additional
options expiring in 2009 from $20.00 per share to the current market value, $17.85 per
share. In accordance with FAS 148, the Company will account for these options subsequent
to October 27, 2004 using variable accounting which will result in a charge
(or addition) to earnings during each period measured by the change in value of the
Companys stock price multiplied by the number of options affected.

Effective
July 1, 1996, the Companys subsidiary, Omega Flex (Omega) adopted a
stock option plan (Omega Plan) which provides for the granting of both
Incentive and Non-Qualified Stock Options (as those terms are defined in the Internal
Revenue Code) of up to 200 shares of stock to certain employees of Omega for the purchase
of Omegas common stock at fair market value as of the date of grant. The Company has
reflected pre-tax charges to earnings in the three-month period ended September 30, 2004
and 2003 of $166,000 and $172,000, respectively, for the compensation value of the options
granted.

On
October 8, 2004, Mestek made a loan to each of the President and Vice President of Omega
(both non-executive officers of the Company) totaling $1,260,000 on a short-term, fully
recourse, full secured basis pursuant to a contractual obligation created in 1996. The
loans were repaid with accrued interest on October 13, 2004.

On
October 12, 2004, the President and Vice President of Omega exercised options granted in
1996 representing a 14% interest in Omegas common stock. Omega received $1,260,000
in connection with the exercise which was treated as an addition to Common Stock and Paid
in Capital. On October 13, 2004 Omega declared and paid a cash dividend to its
shareholders, including the Company, $1,260,000 of which was paid to the two employee-shareholders.

Defined
Benefit Plans

The
Companys second-tier subsidiary, Met-Coil, maintained, prior to its acquisition by
the Companys subsidiary, Formtek Inc. on June 3, 2000, several defined benefit
pension plans (the Met-Coil Plans) covering certain of its employees. The Met-Coil Plans
were frozen and merged prior to the acquisition, locking in
retirement benefits earned to that date and precluding any further benefits for future
service. For the quarters ended September 30, 2004 and 2003, the Company recorded pension
expense of $15,662 and $0, respectively, for the Met-Coil Plans.

In
connection with the acquisition of the assets of Airtherm Manufacturing Company and
Airtherm Products, Inc. in 2000, the Company assumed certain obligations related to the
defined benefit plan maintained by Airtherm, the Airtherm LLC Retirement Income Plan,
prior to the acquisition date. Pension expense (benefit) under the Airtherm LLC Retirement
Income Plan was $1,629 for the quarter ended September 30, 2004, $0 for the year ended
December 31, 2003 and $164,000 for the year ended December 31, 2002.

The
Company uses a December 31 measurement date for the Airtherm LLC Retirement Income Plan
and September 30 for the Met-Coil Plan.

---

In
accordance with Statement of Financial Accounting Standards No. 132 (revised 2003),
Employers Disclosures about Pensions and Other Post-Retirement Benefits, the
following interim period information is provided:

# Components of Net
Periodic Benefit Cost:

|                                | Met-Coil | Airtherm
|------------------------------- | -------- | --------
|
|
|Service cost                    | ---      | ---     
|Interest cost                   | 67,527   | 53,642  
|Expected Return on Plan Assets  | 65,921   | 52,013  
|Amortization of Unrecognized   
|Transition (Asset) Obligation   | (818)    | ---     
|Amortization of net (gain) Loss | 14,874   | ---     
|Other                           | ---      | ---     
|Net Periodic Benefit Cost       | $15,662  | $1,629  

---

# Note 6  Plant
Shutdown

In
April of 2003, the Company announced the closing of its Scranton, PA, (Anemostat
East) and Bishopville, SC, (King Company) manufacturing facilities. In
connection with these closings, Mestek, Inc. restructured and relocated manufacturing
operations of the Anemostat and King products to Wrens, GA; Florence, KY; Dallas, TX;
Carson, CA and Westfield, MA.

On
March 9, 2004, the Company announced plans to close its Milford, OH, (Air Clean
Damper) manufacturing operations. The Company sold the principal assets associated
with this business and the transaction closed on March 31, 2004. A nominal gain was
recorded in the three-month period ended March 31, 2004 and is reflected in Other Income
(Expense) for that period.

The
Company is accounting for the costs related to these exit and disposal
activities, employee severance and related costs of shutting down manufacturing
operations, in accordance with FAS 146, Accounting for Costs Associated with Exit or
Disposal Activities(FAS 146). In the three-month periods ended September
30, 2004 and 2003, the Company incurred $115,000 and $149,000, respectively, of such
exit and disposal costs which are classified separately in the accompanying
financial statements in accordance with FAS 146. In the nine-month periods ended September
30, 2004 and 2003, the Company incurred $970,000 and 860,000 of such costs.

The
Scranton, PA and Milford, OH facilities are reflected in the accompanying Condensed
Consolidated Financial Statements under the heading Property Held for Sale.

---

# Note 7 
Commitments & Contingencies

As
previously disclosed, the Company is obligated as a guarantor with respect to certain debt
of CareCentric, Inc. (CareCentric) (formerly Simione Central Holdings, Inc.)
to CareCentrics primary commercial bank, Wainwright Bank & Trust Company. The $4
million Wainwright credit line is secured by substantially all of CareCentrics
assets. The balance outstanding under CareCentrics credit line with Wainwright Bank
& Trust Company as of September 30, 2004 was $800,000, down from $1,325,000 as of June
30, 2004. CareCentric was taken private on September 4, 2003 and is no longer
a publicly traded company. The Companys investments in CareCentric were not
materially affected by that transaction. The Company recorded a liability of $6 million in
2001, reflecting its maximum potential guarantee liability under the CareCentric credit
line. The credit line was reduced by CareCentric on August 19, 2004 to $4 million, thereby
extinguishing a portion of the Companys liability. Accordingly, the Company has
reduced its guarantee liability to $4 million and recorded $2 million of Other Income in
the quarter ended September 30, 2004.

# Environmental Disclosure

The
Company is subject to several legal actions and proceedings in which various monetary
claims are asserted. Although no assurances can be given, management, after consultation
with its corporate legal department and outside counsel, does not anticipate that any
ultimate liability arising out of all such litigation and proceedings will have a material
adverse effect on the financial condition of the Company except as set forth below.

Bankruptcy
and Environmental Issues Involving Releases of Hazardous Materials

As
disclosed in previous filings, the Lockformer Company (Lockformer), a division
of the Companys second tier subsidiary, Met-Coil Systems Corporation
(Met-Coil), and Mestek directly (under various legal theories) were defendants
in various actions relating to the alleged release and presence of trichloroethylene
(TCE) contamination on and in the vicinity of Lockformers manufacturing
facility in Lisle, IL. On August 26, 2003, Met-Coil filed a voluntary petition for relief
under Chapter 11 of Title 11 of the United States Code (the Bankruptcy Code)
in the United States Bankruptcy Court for the District of Delaware (the Bankruptcy
Court) (Case No. 03-12676-MFW).

On
August 17, 2004, the Bankruptcy Court confirmed, the Fourth Amended Chapter 11 Plan of
Reorganization (the Amended Plan) proposed by Met-Coil and Mestek, as
co-proponents, and recommended to the United States District Court (N. D. Del.) (the
District Court) that it approve and enter the channeling injunction
discussed below, and certain related third party releases in favor of, among others,
Mestek and its affiliates. On September 14, 2004, the District Court entered and approved
the recommended findings and conclusions and issued the channeling injunction.

This
Amended Plan, supported by all major parties in interest in the Met-Coil Chapter 11 case,
became effective on October 19, 2004.

The
Amended Plan settled the various legal actions which had been commenced against Met-Coil
and Mestek with respect to an alleged release of TCE into the soils, groundwater or air in
or around Met-Coils Lockformer Company facility in Lisle, Illinois. In addition, the
Amended Plan established a trust (the TCE PI Trust) for the holders of future
claims or demands, who reside, resided or may reside in a certain geographic area in the
vicinity of the facility in Lisle, Illinois, and who assert or may assert personal injury
claims in the future. Pursuant to the channeling injunction the TCE PI Trust
was established to assume all such future personal injury claims and demands and pay and
administer verified claims for up to 45 years. Upon establishment of such TCE PI Trust,
Mestek and its affiliates were released from any liabilities assumed by the TCE PI Trust
for up to 45 years. Pursuant to the Amended Plan, all such future claims and demands will
be channeled to the TCE PI Trust and be paid in accordance with the
distribution procedures established for such trust. This TCE PI Trust is being
administered by an independent trustee, with power to mediate, arbitrate and, if
necessary, litigate claims.

The
Companys Environmental and Litigation Reserve as of the quarter ended June 30, 2004
was approximately $49,795,000. The confirmation of the Amended Plan resulted in the
collection of certain insurance proceeds and the resolution of settlements with various
claimants and creditors, the result of which is a reduction of these reserves as of
September 30, 2004 to $47,694,000 and the recording of a negative Environmental
Litigation/Remediation expense (that is, income) of $18,415,000 in the three month period
ended September 30, 2004. The reduction in the reserve also reflected approximately
$1,521,000 for remediation expenditures made during the quarter ended September 30, 2004.
Based on recent estimates of ongoing remediation costs, management has increased the
remediation portion of the reserve to $7,300,000, as of September 30, 2004, which the
amount is included in the $47,694,000 reserve discussed above. The Environmental and
Litigation Reserve was reduced as of October 31, 2004 to approximately $21,000,000 as a
result of payments made in October pursuant to Amended Plan, as explained more fully in
Note 8. The balance at October 31, 2004 relates to future obligations under the Plan
relating to soil and groundwater remediation, municipal water connections, the TCE PI
trust described above and other administrative expenses of the Met-Coil bankruptcy.
Management believes that no additional reserves, beyond those set forth above are required
to be taken at this time.

The
immediate cash requirements of funding the Amended Plan required borrowing, net of insurance recoveries, of approximately
 $9,900,000 in October of 2004, under the
Companys $70 million commercial bank credit facility (see Note 3). In addition, letters of credit
of approximately $17,000,000 were issued against the credit facility in connection with
the funding of the Amended Plan.

The
financial statements contained in this report reflect such reserves included in the
caption Liabilities Subject to Compromise. These reserves have been
established in accordance with Financial Accounting Standard Board Statement No. 5 and
Staff Accounting Bulletin No. 92. However, while these reserves represent
managements best estimate of these liabilities, and are based upon known or
anticipated claims analysis estimated by various legal, scientific and economic experts,
there is no assurance that these reserves will be adequate to meet all potentials claims
arising from the environmental contamination at the Lisle, Illinois site. In addition,
there can be no assurance that future claims for personal injury or property damage will
not be asserted by other plaintiffs against Met-Coil and Mestek with respect to the
Lockformer site and facility.

As
additional information and expert opinions become available to management, it may either
be able to revise its estimate of the range of exposure, with appropriate revision to
reserves taken, or continue to believe that no such better estimate is possible at the
time.

Remediation
- Lisle, IL:

Met-Coil
is continuing remediation of the Lockformer facility in Lisle, IL, pursuant to a Work Plan
for the site (on-site remediation) approved by the Environmental Protection
Agency (EPA) and is awaiting approval of the remedial standards to be achieved
by such Work Plan, as well as the methodology for groundwater remediation, from the IEPA.
In the quarter ended September 30, 2004, Met-Coil paid $1,521,000 in costs related to
on-site remediation, and has a remaining reserve of $7,300,000, as described above,for future remediation costs as of September 30, 2004.

In
light of the remaining uncertainties surrounding the effectiveness of the available
remediation technologies and the future potential changes in methodology, remedial
objectives and standards, still further reserves may be needed in the future with respect
to the on-site remediation of the Lisle facility. The complexity of aforementioned factors
makes it impossible at this time to further estimate any additional costs.

Other
Claims Alleging Releases of Hazardous Materials or Asbestos Related Liability

The
Company is currently a party to approximately 215 asbestos-related lawsuits, and in the
past nine months has been named in approximately 5 new such lawsuits each month, primarily
in one county in Illinois where numerous asbestos-related actions have been filed against
numerous defendants.

Almost
all of these suits seek to establish liability against the Company as successor to
companies that may have manufactured, sold or distributed asbestos-related products, and
who are currently in existence and defending thousands of asbestos related cases, or
because the Company currently sells and distributes boilers, an industry that has been
historically associated with asbestos-related products. The Company believes it has valid
defenses to all of the pending claims and vigorously contests that it is a successor to
companies that may have manufactured, sold or distributed any product containing asbestos
materials. However, the results of asbestos litigation have been unpredictable, and
accordingly, an adverse decision or adverse decisions in these cases, individually or in
the aggregate, could materially adversely affect the financial position and results of
operation of the Company and could expose the Company to substantial additional asbestos
related litigation and the defense costs thereof, which defense costs, because of the
sheer number of asbestos claimants and the historical course of the litigation process in
this area has the potential to become substantial, though these costs are not capable of
estimation at this time. The total requested damages of these cases are over $3 billion.
To date, however, the Company has had over 40 asbestos-related cases dismissed without any
payment and it settled approximately twenty-five asbestos-related cases for a de minimis
value. However, there can be no assurance the Company will be able to successfully defend
or settle any pending litigation.

In
addition to the Lisle, IL site, the Company has been named or contacted by state
authorities and/or the EPA regarding the Companys asserted liability or has
otherwise determined it may be required to expend funds for the remediation of certain
other sites in North Carolina, Connecticut and Pennsylvania. Such matters have been
previously described in greater detail in the Companys 2003 Report on Form 10-K.

The
Company continues to investigate all of these matters. Given the information presently
known, no estimation can be made of any liability which the Company may have with respect
to these matters. There can be no assurance, but based on the information presently
available to it, the Company does not believe that any of these matters will be material
to the Companys financial position or results of operations.

# Warranty Commitments

Products
sold by the Company are covered by various forms of express limited warranty with terms
and conditions that vary depending upon the product. The express limited warranty
typically covers the equipment, replacement parts and, in very limited circumstances,
labor necessary to satisfy the warranty obligation for a period which is generally the
earlier of 12 months from date of installation or 18 months from date of shipment from the
Company factory, although some products or product components are warranted for periods
ranging from eighteen months to ten years. The Company estimates the costs that may be
incurred under its warranty obligations and records a liability in the amount of such
costs at the time product revenue is recognized. Factors that affect the Companys
warranty liability include the number of units sold, historical and anticipated rates of
warranty claims, and allowable costs per claim and recoveries from vendors. At least once
a quarter the Company assesses the adequacy of its recorded warranty liabilities and
adjusts the amounts as necessary. Costs to satisfy warranty claims are charged as incurred
to the accrued warranty liability.

Following
is a summary of changes in the Companys product warranty liability for the three
months ended September 30, 2004 and 2003.

|                               | Three months ended
September 30, |           
|------------------------------ | -------------------------------- | ----------
|
|
|Balance at beginning of period | $3,262,468                       | $2,769,672
|Provision for warranty claims  | 448,000                          | 180,000   
|Warranty claims incurred       | (320,000)                        | (213,000) 
|Balance at end of period       | $3,390,468                       | $2,736,672

---

# Note 8  Subsidiary
Bankruptcy

As
a result of the ongoing environmental litigation described more fully in Note 7, on August
26, 2003, Met-Coil Systems Corporation (Met-Coil or, the Debtor),
a second-tier subsidiary of Mestek, Inc. (the Company) filed a voluntary
petition for relief under Chapter 11 of title 11 of the United States Code (the
Bankruptcy Code) in the United States Bankruptcy Court for the District of
Delaware (the Bankruptcy Court).

On
August 17, 2004, the Bankruptcy Court confirmed, the Fourth Amended Chapter 11 Plan of
Reorganization (the Amended Plan) proposed by Met-Coil and Mestek, as
co-proponents, and recommended to the United States District Court (N. D. Del.) (the
District Court) that it approve and enter the channeling injunction
discussed below, and certain related third party releases in favor of, among others,
Mestek and its affiliates. On September 14, 2004, the District Court entered and approved
the recommended findings and conclusions and issued the channeling injunction.
The Amended Plan became effective on October 19, 2004 and Met-Coil is no longer a
debtor-in-possession under bankruptcy protections laws.

As
Met-Coil retained control of its operations as a debtor-in-possession during
the period it was operating under the protection of the Bankruptcy Court, the Company has
not deconsolidated the operations of Met-Coil for accounting purposes. In
accordance with generally accepted accounting principles and the related technical
literature, the Debtor has established reserves related to the Met-Coil environmental
litigation and environmental remediation matters, as more fully described in Note 7. In
accordance with SOP 90-7, certain of Met-Coils pre-petition liabilities have been
reclassified in the accompanying financial statements under the heading Liabilities
Subject to Compromise.

The
liabilities included in this category are:

|                                                        |             
|------------------------------------------------------- | ------------
|Accounts Payable                                        | $  4,125,000
|Accrued Expenses                                        | $2,375,000  
|Environmental Litigation and Remediation reserves       | $47,694,000 
|Commissions Payable                                     | $59,000     
|Total Consolidated Liabilities Subject to Compromise    | $54,253,000 
|Plus:  Notes and Other Payable to Mestek and affiliates | $15,140,000 
|Met-Coil Liabilities Subject to Compromise              | $69,393,000 

The
following unaudited condensed Consolidated Financial Statements of Met-Coil Systems
Corporation (Debtor-in-Possession) are prepared on the same basis as the consolidated
financial statements of Mestek, Inc.

The
Company as a whole incurred $1,519,000 in legal costs in the three-months period ended
September 30, 2004 relating to the administration of Met-Coils Bankruptcy which are
reported in the accompanying financial statements as Reorganization Items
under the heading Subsidiary Bankruptcy Professional Fees.

---

# Following are condensed
unaudited financial statements for Met-Coil Systems LLC

# MET-COIL SYSTEMS LLC

# DEBTOR-IN-POSSESSION

# CONDENSED BALANCE
SHEETS

# (Unaudited)

|                                              | Sept. 30,
2004 | Dec. 31,
2003 *
|--------------------------------------------- | -------------- | ---------------
|
|ASSETS                                        |                |                
|Current Assets                               
|Cash                                          | $10,756        | $2,218         
|Accounts Receivable                           | 3,483          | 2,818          
|Inventories                                   | 8,391          | 7,780          
|Deferred Tax Asset                            | 6,418          | 18,885         
|Other Current Assets                          | 15,113         | 4,158          
|Total Current Assets                          | 44,161         | 35,859         
|Property and Equipment - net                  | 5,835          | 5,405          
|Other Assets and Deferred Charges             | 258            | 333            
|Total Assets                                  | $50,254        | $41,597        
|LIABILITIES AND SHAREHOLDERS' EQUITY         
|Current Liabilities                          
|Accounts Payable                              | $2,596         | $1,761         
|Notes Payable - Affiliates                    | 462            | ---            
|Customer Deposits                             | 3,053          | 2,084          
|Liabilities Subject to Compromise             | 69,393         | 72,498         
|Environmental Litigation/Remediation Reserves | ---            | ---            
|Other Accrued Liabilities                     | 1,874          | 2,473          
|Total Current Liabilities                     | 77,378         | 78,816         
|Other Liabilities                             | 799            | 799            
|Total Liabilities                             | 78,177         | 79,615         
|Shareholders' Equity                         
|Common Stock                                  | 45             | 45             
|Paid in Capital                               | 33,518         | 33,518         
|Retained Earnings                             | (60,723)       | (70,818)       
|Other Comprehensive Loss                      | (763)          | (763)          
|Total Shareholders' Equity                    | (27,923)       | (38,018)       
|Total Liabilities and Shareholders' Equity    | $50,254        | $41,597        

The
Company believes it is more likely than not that the deferred tax asset included above
will be realizable. Met-Coil Systems Corporation changed its statutory form of
organization to a limited liability company on August 17, 2004, with Formtek, Inc. as its
sole member. After the conversion, Met-Coil Systems LLC will be treated as a pass-through
entity for Federal income tax purposes. However, for purposes of comparability, Met-Coil
Systems LLC is presented herein for accounting purposes as though it was still a
corporation.

* reclassified for purposes of
comparability.

---

# MET-COIL SYSTEMS LLC

# DEBTOR-IN-POSSESSION

# CONDENSED STATEMENTS
OF OPERATIONS

# (Unaudited)

|                                                           | Three Months Ended
September 30, |           | Nine Months Ended
September 30, |         
|---------------------------------------------------------- | -------------------------------- | --------- | ------------------------------- | --------
|
|
|Net Sales                                                  | $10,687                          | $8,851    | $30,228                         | $26,458 
|Cost of Goods Sold                                         | 7,188                            | 6,632     | 20,399                          | 18,606  
|Gross Profit                                               | 3,499                            | 2,219     | 9,829                           | 7,852   
|Selling & General and Administrative & Engineering Expense | 2,324                            | 2,305     | 6,853                           | 6,985   
|Environmental Litigation/Remediation Charges               | (18,415)                         | 16,709    | (17,736)                        | 33,720  
|Operating Income (Loss) before Reorganization Items        | 19,590                           | (16,795)  | 20,712                          | (32,853)
|Bankruptcy Professional Fees                               | 869                              | 797       | 5,451                           | 797     
|Operating Income (Loss)                                    | 18,721                           | (17,592)  | 15,261                          | (33,650)
|Other Income (Expense) - net                               | 429                              | 11        | 425                             | (173)   
|Income (Loss) Before Income Taxes and Cumulative          
|Effect of a Change in Accounting Principle                 | 19,150                           | (17,581)  | 15,686                          | (33,823)
|Income Taxes (Benefit)                                     | 6,827                            | (6,268)   | 5,592                           | (12,073)
|Income (Loss) Before Cumulative                           
|Effect of a Change in Accounting Principle                 | 12,323                           | (11,313)  | 10,094                          | (21,750)
|Net Income (Loss)                                          | $12,323                          | ($11,313) | $10,094                         | $21,750)

---

# MET-COIL SYSTEMS LLC

# DEBTOR-IN-POSSESSION

# CONDENSED STATEMENTS OF
CASH FLOWS

# (Unaudited)

|                                                                  | Nine Months Ended
September 30, |          
|----------------------------------------------------------------- | ------------------------------- | ---------
|
|
|Cash Flows from Operating Activities:                             |                                 |          
|Net Loss                                                          | $10,094                         | ($21,750)
|Adjustments to Reconcile Net Income to Net Cash                  
|Provided by Operating Activities:                                
|Depreciation and Amortization                                     | 397                             | 384      
|Provision for Losses on Accounts Receivable                       | ---                             | (243)    
|Subsidiary Bankruptcy Professional Fees                           | 5,451                           | 797      
|Changes in Assets and Liabilities:                               
|Accounts Receivable                                               | (665)                           | (1,509)  
|Inventory                                                         | (611)                           | 336      
|Accounts Payable                                                  | 835                             | (876)    
|Accrued Expenses/Other Liabilities                                | (412)                           | (5,908)  
|Liabilities Subject to Compromise                                 | (3,105)                         | 40,501   
|Environmental Litigation/Remediation Reserves                     | ---                             | (8,700)  
|Other Assets                                                      | 1,588                           | (11,038) 
|Net Cash Used in Operating Activities before Reorganization Items | 13,572                          | (8,006)  
|Operating Cash Flows from Reorganization Items:                  
|Bankruptcy Professional Fees                                      | (5,451)                         | (797)    
|Change in Accrued Expenses                                        | ---                             | 477      
|Net Cash Used in Reorganization Items                             | (5,451)                         | (320)    
|Net Cash Used in Operating Activities                             | 8,121                           | (8,326)  
|Cash Flows from Investing Activities:                            
|Capital Expenditures                                              | (827)                           | (273)    
|Net Cash Used in Investing Activities                             | (827)                           | (273)    
|Cash Flows from Financing Activities:                            
|Net Borrowings                                                   
|Under Revolving Credit Agreements                                 | 1,244                           | 10,996   
|Net Cash Used In Financing Activities                             | 1,244                           | 10,996   
|Net Increase in Cash and Cash Equivalents                         | 8,538                           | 2,397    
|Cash and Cash Equivalents - Beginning of Period                   | 2,218                           | 56       
|Cash and Cash Equivalents - End of Period                         | $10,756                         | $2,453   

---

# Note 9 Common
Stock Buyback Program

In
2004, the Company continued its program of selective open market purchases
acquiring 62,800 shares of its common stock in the three-month period ending June 30, 2004
at an average cost per share of approximately $16.21 and 61,700 shares of its common stock
in the three month period ended September 30, 2004 at an average cost of approximately
$16.73. All such shares were accounted for as treasury shares. The Company acquired no
shares in the period from October 1, 2004 through November 8, 2004.

---

# Item 2 
Managements Discussion and Analysis of Financial Condition and Results of Operations

This
report contains forward-looking statements, which are subject to inherent uncertainties.
These uncertainties include, but are not limited to, variations in weather, changes in the
regulatory environment, customer preferences, general economic conditions, increased
competition, and the outcome of the bankruptcy proceedings and related litigation for the
Companys second-tier subsidiary, Met-Coil Systems Corporation. All of these are
difficult to predict, and many are beyond the ability of the Company to control.

Certain
statements in this Quarterly Report on Form 10-Q constitute forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995 that are not
historical facts but rather reflect the Companys current expectations concerning
future results and events. The words believes, expects,
intends, plans, anticipates, hopes,
likely, will, and similar expressions identify such
forward-looking statements. Such forward-looking statements involve known and unknown
risks, uncertainties and other important factors that could cause the actual results,
performance or achievements of the Company (or entities in which the Company has
interests), or industry results, to differ materially from future results, performance or
achievements expressed or implied by such forward-looking statements.

Readers
are cautioned not to place undue reliance on these forward-looking statements, which
reflect managements view only as of the date of this Form 10-Q. The Company
undertakes no obligation to update the result of any revisions to these forward-looking
statements which may be made to reflect events or circumstances after the date hereof or
to reflect the occurrence of unanticipated events, conditions or circumstances.

# OVERVIEW

The
Company derives its revenues primarily from the sales of Company-manufactured products in
its HVAC Segment and machinery and repair parts in its Metal Forming Segment. In both
segments the sale of service generates a relatively small component of total net sales.
Within the HVAC Segment most, but not all, of the products sold involve sheet metal
fabrication, cast iron production, and machining or assembly or stainless steel
fabrication.

The
Company is not dependent on any one customer in either of its segments for more than 10%
of its consolidated revenues, nor does it derive more than 10% of its consolidated
revenues internationally.

The
Companys HVAC Segment reflects the seasonal nature of a company engaged in heating
products sales, although the broadening of its product offering over the past 10 years to
include cooling products, air handling products and corrugated stainless steel tubing has
dampened the seasonal curve of the Segments revenue stream.

The Companys Metal Forming
Segment operates within the highly cyclical capital goods marketplace and reflects the
challenges not only with respect to cycling of demands but also the globalization of the
customer bases as well as the competitor base, requiring it to seek a more international
focus in supply, manufacturing sales and marketing. The Company operates principally
within the North American marketplace. However, the Company foresees the need for growth
both in sales and production in both Europe and Asia.

The
Company currently employs approximately 2,725 people, primarily in the United States and
Canada.

Fluctuations
in the metal commodities market in particular can have and currently are having
significant impacts on the Companys cost structure and may affect profitability with
respect to revenues based on committed contracts or derived in markets where pricing to
the Companys customers cannot be readily adjusted.

The
Company operates in highly competitive markets. While many companies, both larger and
smaller than we are, sell many of the same products and services, our competitive position
is not easily determinable in either of our Segments since no one competitor or group of
competitors offers the same product lines through the same channels. Competitors in both
of our Segments compete primarily through product quality and performance, price, service
(both pre- and post-sale) and technical innovation. The relative importance of these
factors varies from product line to product line.

An
important part of the Companys business strategy is to look for niche areas where
larger competitors in the HVAC arena choose not to focus or, in our Metal Forming Segment,
where strategic enhancement of product offering can result in a more competitive position
in the marketplace, and, through acquisition or product and market development, address
these opportunities. As a part of this process, we continually review our stable of
companies and product lines, evaluating them with respect to allocation of resources for
growth, resuscitation or sale. Our history over the past twenty years has been growth
often through acquisition and this process continues, as does the occasional divestiture
or closing of a company or facility.

The
strength or weakness in the construction markets directly affects our HVAC business and
strength or weakness in the capital goods markets directly affects our Metal Forming
business. In 2003 and thus far in 2004, residential construction was and remains strong,
institutional construction was and remains flat and industrial/commercial construction was
and remains off from prior periods. To the extent that the strong residential new
construction and re-modeling/re-construction/re-habilitation market has been driven by
historically low interest rates, any increases in interest rates may adversely affect the
volume and profitability of our HVAC business. In the capital goods sector, despite early
signs of health, orders for machinery and machine tools remained volatile in 2003,
averaging at levels comparable to 2002 but significantly lower than periods prior to 2000.
Bookings have increased to date in 2004 resulting in an improved third quarter in 2004 for
this Segment relative to the comparable period in 2003.

For
2004, the Companys Segment budgets are based upon an overall stability expected in
the construction markets, though the mix of residential, commercial, industrial and
institutional construction spending may change, and expected continuation of the upturn in
capital spending, driven in part by the pent-up demand resulting from deferred maintenance
as well as increased manufacturing production utilizing the kind of machinery the Company
sells. However, rising commodity prices, especially steel, scrap cast iron, copper, oil
and natural gas contributing to upward inflationary pressures, which may also push
interest rates higher. While the Company itself is not highly leveraged and thus the
increased cost of capital may not be as significant a factor in the Companys cost
structure as it is in other companies, increases in interest rates could slow the domestic
residential construction market or contribute to further declines in the commercial and
industrial construction markets, as well as adversely affect the capital goods market
recovery. Increased shipping costs and benefits expense (primarily health care) are also
having a dampening effect on economic growth, which would have an adversely effects on the
Companys operations.

# CRITICAL ACCOUNTING
POLICIES AND USE OF ESTIMATES

Financial
Reporting Release No. 60, released by the Securities and Exchange Commission, requires all
companies to include a discussion of critical accounting policies or methods used in the
preparation of financial statements. Note 1 of the Notes to the Condensed Financial
Statements includes a summary of the significant accounting policies and methods used in
the preparation of our Consolidated Financial Statements. The following is a brief
discussion of the Companys more significant accounting policies.

The
preparation of financial statements in conformity with generally accepted accounting
principles requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and the disclosure of contingent assets and liabilities
at the dates of the financial statements and the reported amounts of revenues and expenses
during the reporting periods. The most significant estimates and assumptions relate to
revenue recognition, accounts receivable valuations, inventory valuations, goodwill
valuation, intangible asset valuations, warranty costs, product liability costs,
environmental reserves, workers compensation claims reserves, health care claims reserves,
investments, and accounting for income taxes and the realization of deferred tax assets.
Actual amounts could differ significantly from these estimates.

Our
critical accounting policies and significant estimates and assumptions are described in
more detail as follows:

Environmental
Litigation and Remediation Reserves

As
discussed more fully in Note 7 to the Condensed Financial Statements and in Environmental
Disclosure below, Mestek and its second-tier subsidiary, Met-Coil Systems Corporation
(Met-Coil), were defendants in various environmental litigation matters relating to
alleged releases of pollutants by Met-Coil prior to its acquisition by the Companys
Formtek, Inc. subsidiary on June 3, 2000. These matters were substantially resolved as a
result of the Plan of Reorganization confirmed by the Bankruptcy Court on August 17, 2004
and which became effective on October 19, 2004. However, this resolution still requires
the Company to establish estimates related to the outcome of various litigation matters as
well as estimates related to soil and groundwater remediation costs, both of which are
inherently judgmental and subject to change on an ongoing basis.

Accounts
Receivable

Accounts receivable are reduced by an
allowance for amounts that may become uncollectible in the future. The estimated allowance
for uncollectible amounts is based primarily on specific analysis of accounts in the
receivable portfolio and historical write-off experience. While management believes the
allowance to be adequate, if the financial condition of the Companys customers were
to deteriorate, resulting in impairment of their ability to make payments, additional
allowances may be required.

Product
Liability Reserves

The Company has absorbed
significantly higher levels of insurance risk subsequent to September 11, 2001 due to the
effects of September 11, 2001 on pricing in the commercial insurance marketplace. As a
result, the Company must establish estimates relative to the outcome of various product
liability and general liability matters which are inherently judgmental and subject to
ongoing change.

Inventory

The Company values its inventory at
the lower of cost to purchase and/or manufacture the inventory, principally determined on
the last-in, first-out (LIFO) method, or the current estimated market value of
the inventory. The Companys September 30, 2004 and 2003 LIFO reserves, as disclosed
in Note 2 to these Condensed Financial Statements, have been estimated at these interim
dates in accordance with Accounting Principles Board Opinion 28, Interim Financial
Reporting. The Company periodically reviews inventory quantities on hand and records a
provision for excess and/or obsolete inventory based primarily on its estimated forecast
of product demand, as well as based on historical usage. A significant decrease in demand
for the Companys products or technological changes in the industries in which the
Company operates could result in an increase of excess or obsolete inventory quantities on
hand, requiring adjustments to the value of the Companys inventories.

Revenue
Recognition

The
Companys revenue recognition activities relate almost entirely to the manufacture
and sale of heating, ventilating and air conditioning (HVAC) equipment and metal forming
equipment. Under generally accepted accounting principles, revenues are considered to have
been earned when the Company has substantially accomplished what it must do to be entitled
to the benefits represented by the revenues. With respect to sales of the Companys
HVAC or metal forming equipment, the following criteria represent preconditions to the
recognition of revenue:

| | * persuasive evidence of an arrangement must exist;
* delivery has occurred or services rendered;
* the sales price to the customer is fixed or determinable; and
* collection is reasonably assured.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Investments

As discussed more fully in Note 6 to
its 2003 Consolidated Financial Statements, the Company has certain investments in
CareCentric, Inc. (CareCentric) which it has historically accounted for by the equity
method. On March 29, 2002, the Company transferred certain voting rights to John E. Reed,
its Chairman and CEO, in the context of a refinancing transaction under which both the
Company and John E. Reed invested additional monies in CareCentric. As a result of the
transfer of votes, the Company determined that it no longer had significant
influence relative to CareCentric, as defined in APB 18 and EITF 98-13, and,
accordingly, adopted the cost method of accounting for its investments in CareCentric
subsequent to that date. The Company has evaluated the requirements of FASB Interpretation
No. 46, Consolidation of Variable Interest Entities (FIN 46), as they relate to its
investments in CareCentric, as more fully explained in Note 1 to the accompanying
Financial Statements, and determined that CareCentric is not required to be consolidated
with the Company.

Warranty

The Company provides for the
estimated cost of product warranties at the time revenue is recognized based upon
estimated costs, historical and industry experience, and anticipated in-warranty failure
rates. While the Company engages in product quality programs and processes, and
significant testing prior to shipment, the Companys warranty obligation is affected
by product failure rates, including component failures, and repair or replacement costs
incurred in correcting a product failure. Should actual product failure rates or repair or
replacement costs differ from estimates based on historical experience, revisions to the
estimated warranty liability may be required.

Health
Care Claim Reserves

The
Company self-insures a substantial portion of the health benefits provided for its
employees and maintains reserves in this regard. The Company relies upon a recognized
actuarial consulting firm to help it set and maintain these reserves.

Workers
Compensation Claims Reserves

The
Company provides workers compensation coverage principally through commercial insurance
carriers using high deductible programs, which require the Company to reserve
for and pay a high proportion of its workers compensation claims payable. The Company
relies upon the expertise of its insurance carriers and its own historical experience in
setting the reserves related to these claims.

Accounting
for Income Taxes

The
preparation of the Companys Consolidated Financial Statements requires it to
estimate its income taxes in each of the jurisdictions in which it operates, including
those outside the United States which may be subject to certain risks that ordinarily
would not be expected in the United States. The income tax accounting process involves
estimating its actual current exposure together with assessing temporary differences
resulting from differing treatment of items, such as depreciation and equity method gains
and losses, for tax and accounting purposes. These differences result in the recognition
of deferred tax assets and liabilities. The Company must then record a valuation allowance
to reduce its deferred tax assets to the amount that is more likely than not to be
realized. Significant management judgment is required in determining the Companys
provision for income taxes, its deferred tax assets and liabilities and any valuation
allowance recorded against deferred tax assets. In the event that actual results differ
from these estimates or the Company adjusts these estimates in future periods, it may need
to adjust its valuation allowance which could materially impact its financial position and
results of operations.

# RESULTS OF OPERATIONS

Three
months ended September 30, 2004 vs. September 30, 2003

HVAC
Segment

Total
Revenues in the Companys HVAC Segment decreased 2.5% during the third quarter of
2004 relative to the third quarter of 2003 reflecting sluggish sales of commercial and
residential boiler products owing to weak demand in the market, particularly from fiscally
strapped municipal and state governmental entities who represent a significant portion of
the customer base for the Segments commercial boiler products. Revenues from the
Hydronics Product Group decreased 3.0% during the third quarter of 2004 relative to the
third quarter of 2003 from $35,116,000 to $34,068,000, for the reasons explained above.
Revenues in the Air Distribution and Cooling Products Group were reduced 15%, from
$22,520,000 to $19,151,000, owing in part to the sale on March 31, 2004 of the Air Clean
Damper business as well as reduced demand for certain of the Segments commercial
damper and louver products. Revenues in the Gas and Industrial Product Group increased
10.3%, reflecting principally improved sales of the Segments successful
TracPipe® gas piping product.

The
Segments gross profit margins overall were reduced, from 30.1% in the third quarter
of 2003 to 28.6% in the third quarter of 2004. This resulted principally from the effects
of inflationary pressures presently affecting copper, steel, cast iron scrap, aluminum and
other commodities used in the Segments products, despite the Companys efforts
to raise prices on a timely basis to offset such cost increases.

Operating
profits for the HVAC segment for the three months ended September 30, 2004 were down 33.0%
relative to the three months ended September 30, 2003 from $6.6 million to $4.4 million,
reflecting the weaknesses cited above in demand for commercial and residential boilers and
certain of the Segments air distribution products. The Company is presently
undertaking a significant overhead rationalization study focused on its various air
distribution franchises in order to adapt to present conditions in the HVAC industry.

Metal
Forming Segment

Total
Revenues in the Companys Metal Forming segment increased 41.9% during the third
quarter of 2004 relative to the third quarter of 2003, reflecting principally an improving
market for capital goods generally and machine tools in particular. The Segment also has
improved its market penetration as a result of focusing its sales efforts on sales of
standard products, emphasizing solution providing for custom applications in
target markets, introduction of new products through product development, additional
business from start up and acquired operations and its continuing efforts to integrate the
complementary metal forming franchises acquired by the Segment over the last several
years. In addition, overall gross profit margins for the Segment increased from 23.91% to
28.3% due to better execution. The backlog as of September 30, 2004 is approximately $29.4
million, significantly up from the backlogs that were in the low $20 million range
recorded at mid-2003 (excluding Engel and Formtek Beijing), although somewhat reduced from
the recent high of approximately $33 million at June 30, 2004, reflecting a traditional
drop after the slower summer sales season. The management of the Segment is presently
comfortable with the current backlog in terms of sufficient work to retain manufacturing
efficiencies and to meet operational plan targets while maintaining adequate lead times to
meet customer delivery requirements.

Bookings
of new orders for the Segment were approximately $23.4 million for the third quarter
ending September 30, 2004, an increase of approximately 30% over the bookings of orders
for the comparable quarter ending September 30, 2003. The 2003 bookings include Engel
(acquired in August 2003) only for the month of September and do not include Formtek
Beijing, which opened in February 2004. The current third quarter bookings are about 8%
off plan, but represent a decline of approximately 20% from the bookings recorded in the
quarter ended June 30, 2004. Sales by the Segment to the metal construction market have
been strong, but there has been some softening of sales to sheet metal contractors 
not uncommon at this time of year.

Now
that the Met-Coil divisions have emerged from Chapter 11, the Company will continue to
build upon its efforts to foster efficient operations and cooperation among the mutually
reinforcing metal forming machinery and tooling franchises that it has acquired under the
Formtek name, including the brands, Cooper-Weymouth, Peterson (CWP)
 coil handling, press feeding and coiled metal processing equipment, Rowe
 press feeding and coil handling equipment, CoilMate/Dickerman  pallet
de-coiling and press feeding equipment, Yoder  roll forming systems and tube
mills, Dahlstrom  roll forming and flexible fabrication systems,
Lockformer  HVAC/sheet metal equipment, custom roll forming and the Vulcanplasma cutting system, Engel  HVAC/sheet metal equipment, coil lines,
industrial forming applications and metal construction equipment, Lion
HVAC/sheet metal equipment (assets acquired in October 2004), Iowa Precision Industries
(IPI)  HVAC duct lines, coiled metal processing and custom fabricating systems,
B & K  patented Supermills, rotary punching machines and rotary
shears, and levelers, Mentor AGVS  automated laser guided vehicle systems and
Hill Engineering  tools, progressive, punching, notching and flying cut-off
dies, flying cut-off saws, rotary punching machines and special hydraulic punching
systems, as well as the start up operations Formtek Metalforming Integration (FMI)
 forming and fabricating system re-building, Iowa Rebuilders (IRI) 
HVAC/sheet metal and coiled metal processing equipment re-building, AXON Electric
 electrical components, controls and panels, Elgin Fabrication  shears,
press brakes and forming equipment and Formtek Beijing  HVAC/sheet metal
forming and cutting equipment. The combination of these businesses will allow Formtek to
maintain and expand its core competencies to serve a large portion of the metal forming
needs of many industrial markets, positioning this Segment well for the next significant
cyclical upturn in the machine tool industry.

Reflecting
the Segments higher revenues and improved gross profit margins, operating results
for the quarter, excluding environmental litigation and remediation (income) expenses of
($18,415,000), primarily reflecting insurance recoveries not previously accrued, and
subsidiary bankruptcy professional fees of $1,519,000 in the quarter ended September 30,
2004 and $16,709,000 in environmental litigation and remediation expense and $2,595,000 in
subsidiary bankruptcy fees in the quarter ended September 30, 2003, increased from
($1,294,000) in the 2003 period to $573,000 in the 2004 period.

The
foregoing operating income and loss figures, by virtue of the exclusion of the items
mentioned, constitute Non-GAAP Financial Measures which management believes
are useful to investors focused upon ascertaining ongoing operating earnings trends. This
should not be construed as an alternative to operating income (loss) or
net income (loss) (as determined in accordance with generally accepted
accounting principles or GAAP), as an indicator of the Companys
operating performance, as an alternative to cash flows provided by operating activities
(as determined by GAAP), or as a measure of liquidity. The foregoing operating income and
loss figures, excluding the anomalous items mentioned are presented solely as a
supplemental disclosure because management believes they enhance the understanding of the
financial performance of a company with substantial anomalous expense items.

The
Metal Forming Segments Core operating profits (losses) (a Non-GAAP Financial
Measure discussed below) are reconciled with operating profits (losses) determined in
accordance with GAAP as follows:

Metal
Forming Segment

|                                                          | Three months ended
September 30, |              
|--------------------------------------------------------- | -------------------------------- | -------------
|
|Core Operating Profits (Loss) for the Segment             | $573,000                         | ($1,294,000) 
|Less Subsidiary Bankruptcy Professional Fees              | (1,519,000)                      | (2,595,000)  
|Environmental Litigation and Remediation Income (Expense) | 18,415,000                       | (16,709,000) 
|Operating Profit (Losses) per GAAP                        | $17,469,000                      | ($20,598,000)

Management
believes that the continuing effects of globalization on manufacturing costs present the
Company with significant opportunities. The Company is pursuing in this regard, for all of
its businesses, initiatives in Asia aimed at sourcing machined parts and components for
use in its North American factories, and assembling discrete stand-alone equipment on a
limited basis, with ultimate plans to sell select machinery in Asian markets and
throughout the world. The Company expects to invest approximately $950,000 prior to the
end of 2004 to provide infrastructure and support for these initiatives. Formteks
wholly owned foreign enterprise, Formtek Machinery (Beijing) Co. Ltd, assembled and
shipped $429,000 of roll forming and metal cutting equipment in the quarter ended
September 30, 2004, approximately half to customers in Asia, Australia and the Middle
East.

Consolidated
Operations

For
the Company as a whole, Sales, General and Administrative, and Engineering costs, taken
together as a percentage of Total Revenues, was slightly reduced, from 23.9% of sales in
the three-month period ended September 30, 2003 to 23.60% in the three-month period ended
September 30, 2004.

Operating
income for the third quarter of 2004 for the Company as a whole relative to the third
quarter of 2003, excluding the aforementioned environmental litigation and remediation
(income) and expense and subsidiary bankruptcy professional fees totaling ($16,896,000) in
2004 and $19,304,000 in 2003, Plant Shutdown expenses of $115,000 in 2004 and $149,000 in
2003, and subsidiary bankruptcy fees of $1,519,000 in 2004 and $2,595,000 in 2003 was
reduced 5.4% from $5,341,000 to $5,054,000. Overall, improved results from the HVAC
Segments Omega Flex unit and the Companys Metal Forming Segment were offset by
disappointing results in the remaining HVAC Segment products.

The
foregoing operating loss figures, by virtue of the exclusion of the items mentioned,
constitute Non-GAAP Financial Measures which management believes are useful to
investors focused upon ascertaining ongoing operating earnings trends. This should not be
construed as an alternative to operating income (loss) or net income
(loss) (as determined in accordance with generally accepted accounting principles),
as an indicator of the Companys operating performance, as an alternative to cash
flows provided by operating activities (as determined by GAAP), or as a measure of
liquidity. The foregoing operating loss figures excluding the anomalous items mentioned
are presented solely as a supplemental disclosure because management believes they enhance
the understanding of the financial performance of a company with substantial anomalous
expense items.

The
core operating profits (losses) for the Company as a whole are reconciled with operating
profits (loss) determined in accordance with GAAP as follows:

Consolidated Operations

|                                                          | Three months ended
September 30, |              
|--------------------------------------------------------- | -------------------------------- | -------------
|
|Core Operating Profits (Loss)                             | $5,054,000                       | $5,341,000   
|Less Subsidiary Bankruptcy Professional Fees              | (1,519,000)                      | (2,595,000)  
|Environmental Litigation and Remediation Income (Expense) | 18,415,000                       | (16,709,000) 
|Less Plant Shutdown                                       | (115,000)                        | (149,000)    
|Operating Profits (Losses) per GAAP                       | $21,835,000                      | ($14,112,000)

Income
Tax Provision, as a percentage of pretax income, was 14.8% in the three months ended
September 30, 2004, reflecting one time tax benefits associated with the net costs of the
Met-Coil bankruptcy. Income tax (benefit), as a percentage of pretax income, for the three
months ended September 30, 2003 was 33.8% reflecting limitations in certain states on the
utilization of tax losses which diminish the effective rate associated with the income tax
benefits recorded in relation to the tax losses.

Nine
months ended September 30, 2004 vs. September 30, 2003

HVAC
Segment

Total
Revenues in the Companys HVAC segment increased 2.3% during the nine-month period
ended September 30, 2004 relative to the comparable period in 2003 due primarily to
improved sales of certain hydronic heating products and Omega Flexs very successful
TracPipe® gas piping product, which more than offset reduced sales of certain boiler
and air distribution products. As described above, sales of commercial and residential
boilers were reduced due to market wide weak demand for boiler products. In addition,
demand for certain of the Companys commercial air distribution products has also
been weak and, as explained above, the Company is presently focused on rationalizing
overhead in its various air distribution franchises. During the nine months ended
September 30, 2004 and 2003, the HVAC segment incurred shutdown and relocation activities
totaling $970,000 and $860,000, respectively, which amounts are eligible for
separate line treatment under FAS 146, Accounting for Costs Associated With
Exit or Disposal Activities, and are accounted for accordingly in the accompanying
Financial Statements.

Operating
profits for the HVAC segment for the nine-month period ended September 30, 2004 were down
3.0% relative to the nine-month period ended September 30, 2003 from $11,609,000 to
$11,268,000, despite the increased sales noted above due principally to reduced gross
margins resulting from increased commodity costs. The Segment is a substantial user of
copper, steel and aluminum which have been subject to significant inflation in 2004.

Metal Forming Segment

Total
Revenues in the Companys Metal Forming segment increased by 33.7% during the
nine-month period ended September 30, 2004 relative to the comparable nine-month period
ended September 30, 2003. Excluding revenues from Engel Industries, Inc., which was
acquired in August of 2003, revenues were up 22.6%, reflecting improved sales at the
Segments Formtek Cleveland and Met-Coil subsidiaries, among others, and
demonstrating generally the effect of the Companys continuing efforts to integrate
the complimentary franchises now comprising the Metal Forming Segment. Demand for machine
tools in general, including the Segments products, has improved during 2004.

Reflecting
the Segments higher revenues, core operating results (a Non-GAAP
Financial Measure) for the segment for the nine-month period ended September 30,
2004 (which exclude environmental litigation and remediation (income) expense of
($17,728,000) and subsidiary bankruptcy professional fees of $8,542,000 in the nine-month
period ended September 30, 2004 and $33,947,000 in environmental litigation and
remediation expense and $2,595,000 in subsidiary bankruptcy fees in the nine-month period
ended September 30, 2003) improved from ($1,392,000) in the 2003 period to $901,000 in the
2004 period. The 2004 core operating profit figure includes approximately $936,000 in
start-up losses in the four new entities incorporated in 2003, which are
discussed below, in rebuilding (FMI and IRI), electrical distribution (Axon) and
China-based assembly (Formtek Beijing). The Company expects the rebuilding units to
achieve a profitable rate by year-end, although not eliminating the accumulated deficit.
The Company is studying the effect of merging these entities. The electrical distribution
entity is not on plan, and management is studying how to achieve a profitable rate of
business in 2005. The entity has helped other Formtek units achieve savings approaching
$200,000 in the nine month period ended September 30, 2004. This figure also includes
approximately $350,000 in expenses related to product development for early stage products
in coiled metal processing and specialty forming and fabricating.

The
foregoing core operating income and loss figures, by virtue of the exclusion of the items
mentioned, constitute Non-GAAP Financial Measures which management believes
are useful to investors focused upon ascertaining underlying operating earnings trends.
This should not be construed as an alternative to operating income (loss) or
net income (loss) (as determined in accordance with generally accepted
accounting principles or GAAP), as an indicator of the Companys
operating performance, as an alternative to cash flows provided by operating activities
(as determined by GAAP), or as a measure of liquidity. The foregoing core operating income
and loss figures excluding the anomalous items mentioned are presented solely as a
supplemental disclosure because management believes they enhance the understanding of the
financial performance of a company with substantial anomalous expense items.

The
Metal Forming Segments core operating profits (losses) are reconciled with operating
profits (losses) determined in accordance with GAAP as follows:

Metal
Forming Segment

|                                                          | Nine months ended
September 30, |              
|--------------------------------------------------------- | ------------------------------- | -------------
|
|Core Operating Profits (Loss) for the Segment             | $901,000                        | ($1,392,000) 
|Less Subsidiary Bankruptcy Professional Fees              | (8,542,000)                     | (2,595,000)  
|Environmental Litigation and Remediation Income (Expense) | 17,728,000                      | (33,947,000) 
|Operating Losses per GAAP                                 | $10,087,000                     | ($37,934,000)

The
Company believes that the mutually reinforcing franchises it has acquired under the
Formtek name, including Cooper-Weymouth Peterson, Rowe, CoilMate/Dickerman, Yoder,
Krasny-Kaplan, Mentor AGVS, Lockformer, Iowa Precision, Hill Engineering, B&K, and
Dahlstrom, as well as the recently acquired Engel Industries, Inc. and the start-ups of
two rebuilding operations, FMI and IRI, an electrical distributor, Axon Electric and a
Beijing-based assembly facility, Formtek (Beijing), will allow it to maintain and expand
its core competencies, positioning this Segment very well for the next significant
cyclical upturn in the machine tool industry. The Company expects to continue to spend on
sales, marketing and product development initiatives at current rates for the foreseeable
future.

Management
believes that the continuing effects of globalization on manufacturing costs have
presented the Company with significant opportunities. The Company is pursuing in this
regard, for all of its businesses, initiatives in Asia aimed at sourcing machined parts
and components for use in its North American factories, and assembling discrete
stand-alone equipment and sub-assemblies on a limited basis, with ultimate plans to sell
select machinery in Asian markets and throughout the world. Including the losses noted
above, the Company expects to invest approximately $1,250,000 prior to the end of 2004 to
provide infrastructure and support for these initiatives and an additional $500,000 to
support growing inventories and accounts receivable.

Consolidated
Operations

For
the Company as a whole, Sales, General and Administrative, and Engineering costs, taken
together as a percentage of Total Revenues, decreased from 24.8% to 24.1% reflecting
principally the effect of improved revenues.

Core
Operating Income (a Non-GAAP Financial Measure) for the nine-month period
ended September 30, 2004 for the Company as a whole, which excludes the aforementioned
environmental (income) expense of ($17,728,000) in 2004 and $33,947,000 in 2003, and Plant
Shutdown expenses of $970,000 in 2004 and $860,000 in 2003, and Subsidiary Bankruptcy
Professional Fees of $8,542,000 in 2004 and $2,595,000 in 2003, increased 23.9% from
$10,585,000 in the 2003 period to $13,113,000 in 2004.

The
foregoing core operating income figures, by virtue of the exclusion of the items
mentioned, constitute Non-GAAP Financial Measures which management believes
are useful to investors focused upon ascertaining ongoing operating earnings trends. This
should not be construed as an alternative to operating income or net
income (as determined in accordance with generally accepted accounting principles),
as an indicator of the Companys operating performance, as an alternative to cash
flows provided by operating activities (as determined by GAAP), or as a measure of
liquidity. The foregoing core operating income figures excluding the anomalous items
mentioned are presented solely as a supplemental disclosure because management believes
they enhance the understanding of the financial performance of a company with substantial
anomalous expense items.

The
Core operating profits (losses) for the Company as a whole are reconciled with operating
profits (losses) determined in accordance with GAAP as follows:

Consolidated
Operations

|                                                          | Nine months ended
September 30, |              
|--------------------------------------------------------- | ------------------------------- | -------------
|
|Core Operating Profits (Loss)                             | $13,113,000                     | $10,585,000  
|Less Subsidiary Bankruptcy Professional Fees              | (8,542,000)                     | (2,595,000)  
|Environmental Litigation and Remediation Income (Expense) | 17,728,000                      | (33,947,000) 
|Less Plant Shutdown                                       | (970,000)                       | (860,000)    
|Operating Losses per GAAP                                 | $;21,329,000                    | ($26,817,000)

Income
Tax Expense (Benefit), as a percentage of pretax income (loss), decreased from 34% in the
nine-month period ended September 30, 2003 to 14.8% in the nine-month period ended
September 30, 2004. The reduced effective rate in 2003 is due principally to the effect of
minimum taxes in certain states which diminish the effective rate associated with the
income tax benefit recorded in relation to tax losses. The reduced effective rate in 2004
is due principally to the effect of one time tax benefits associated with the Met-Coil
bankruptcy.

Liquidity
and Capital Resources

The
Companys total debt (long-term debt plus current portion of long-term debt)
decreased in the third quarter of 2004 from $32,919,000 at June 30, 2004 to $26,450,000 at
September 30, 2004, despite an increased investment in accounts receivable and inventory
of approximately $6.6 million, due to the effects of positive cash flows from operations,
restrained capital spending, the receipt of a $4.1 million federal income tax refund, and
the receipt of approximately $6.7 million in insurance recoveries relating to the Met-Coil
environmental litigation. Subject to the matters described in Commitments &
Contingencies below, management regards the Companys current capital structure and
banking relationships, as more fully explained in Note 7, as fully adequate to meet
foreseeable future needs. The Company has not paiddividends on its common stock
since 1979. The Companys debt to equity ratio was approximately 23.3% as of
September 30, 2004.

As
explained more fully in Note 3, on October 19, 2004, the Company closed on a new $70
million three-year commercial bank line of credit. In October of 2004, in connection with
the Met-Coil Reorganization Plan, the Company borrowed approximately $9.9 million under
its credit facility and issued approximately $17 million in letters of credit, as more
fully explained in Note 7. Including the effect of this $9.9 million borrowed in October
the debt to equity ratio would be 31.6%.

Commitments
&Contingencies

As
previously disclosed, the Company is obligated as a guarantor with respect to certain debt
of CareCentric, Inc. (CareCentric) (formerly Simione Central Holdings, Inc.)
to CareCentrics primary commercial bank, Wainwright Bank & Trust Company. The $4
million Wainwright credit line is secured by substantially all of CareCentrics
assets. The balance outstanding under CareCentrics credit line with Wainwright Bank
& Trust Company as of September 30, 2004 was $800,000, down from $1,325,000 as of June
30, 2004. CareCentric was taken private on September 4, 2003 and is no longer
a publicly traded company. The Companys investments in CareCentric were not
materially affected by that transaction. The Company recorded a liability of $6 million in
2001, reflecting its maximum potential guarantee liability under the CareCentric credit
line. The credit line was reduced by CareCentric on August 19, 2004 to $4 million, thereby
extinguishing a portion of the Companys liability. Accordingly, the Company has
reduced its guarantee liability to $4 million and recorded $2 million of Other Income in
the quarter ended September 30, 2004.

Environmental
Disclosure

The
Company is subject to several legal actions and proceedings in which various monetary
claims are asserted. Although no assurances can be given, management, after consultation
with its corporate legal department and outside counsel, does not anticipate that any
ultimate liability arising out of all such litigation and proceedings will have a material
adverse effect on the financial condition of the Company except as set forth below.

Bankruptcy
and Environmental Issues Involving Releases of Hazardous Materials

As
disclosed in previous filings, the Lockformer Company (Lockformer), a division
of the Companys second tier subsidiary, Met-Coil Systems Corporation
(Met-Coil), and Mestek directly (under various legal theories) were defendants
in various actions relating to the alleged release and presence of trichloroethylene
(TCE) contamination on and in the vicinity of Lockformers manufacturing
facility in Lisle, IL. On August 26, 2003, Met-Coil filed a voluntary petition for relief
under Chapter 11 of Title 11 of the United States Code (the Bankruptcy Code)
in the United States Bankruptcy Court for the District of Delaware (the Bankruptcy
Court) (Case No. 03-12676-MFW).

On
August 17, 2004, the Bankruptcy Court confirmed, the Fourth Amended Chapter 11 Plan of
Reorganization (the Amended Plan) proposed by Met-Coil and Mestek, as
co-proponents, and recommended to the United States District Court (N. D. Del.) (the
District Court) that it approve and enter the channeling injunction
discussed below, and certain related third party releases in favor of, among others,
Mestek and its affiliates. On September 14, 2004, the District Court entered and approved
the recommended findings and conclusions and issued the channeling injunction.

This
Amended Plan, supported by all major parties in interest in the Met-Coil Chapter 11 case,
became effective on October 19, 2004.

The
Amended Plan settled the various legal actions which had been commenced against Met-Coil
and Mestek with respect to an alleged release of TCE into the soils, groundwater or air in
or around Met-Coils Lockformer Company facility in Lisle, Illinois. In addition, the
Amended Plan established a trust (the TCE PI Trust) for the holders of future
claims or demands, who reside, resided or may reside in a certain geographic area in the
vicinity of the facility in Lisle, Illinois, and who assert or may assert personal injury
claims in the future. Pursuant to the channeling injunction the TCE PI Trust
was established to assume all such future personal injury claims and demands and pay and
administer verified claims for up to 45 years. Upon establishment of such TCE PI Trust,
Mestek and its affiliates were released from any liabilities assumed by the TCE PI Trust
for up to 45 years. Pursuant to the Amended Plan, all such future claims and demands will
be channeled to the TCE PI Trust and be paid in accordance with the
distribution procedures established for such trust. This TCE PI Trust is being
administered by an independent trustee, with power to mediate, arbitrate and, if
necessary, litigate claims.

The
Companys Environmental and Litigation Reserve as of the quarter ended June 30, 2004
was approximately $49,795,000. The confirmation of the Amended Plan resulted in the
collection of certain insurance proceeds and the resolution of settlements with various
claimants and creditors, the result of which is a reduction of these reserves as of
September 30, 2004 to $47,694,000 and the recording of a negative Environmental
Litigation/Remediation expense (that is, income) of $18,415,000 in the three month period
ended September 30, 2004. The reduction in the reserve also reflected approximately
$1,521,000 for remediation expenditures made during the quarter ended September 30, 2004.
Based on recent estimates of ongoing remediation costs, management has increased the
remediation portion of the reserve to $7,300,000, as of September 30, 2004, which the
amount is included in the $47,694,000 reserve discussed above. The Environmental and
Litigation Reserve was reduced as of October 31, 2004 to approximately $21,000,000 as a
result of payments made in October pursuant to Amended Plan, as explained more fully in
Note 8. The balance at October 31, 2004 relates to future obligations under the plan
relating to soil and groundwater remediation, municipal water connections, the TCE PI
trust described above and other administrative expenses of the Met-Coil bankruptcy.
Management believes that no additional reserves, beyond those set forth above are required
to be taken at this time.

The
immediate cash requirements of funding the Amended Plan required borrowing, net of insurance recoveries, of approsimately
9,900,000 in October of 2004, under the
Companys $70 million commercial bank credit facility (see Note 3).  In addition, letters of credit
of approximately $17,000,000 were issued against the credit facility in connection with
the funding of the Amended Plan.

The
financial statements contained in this report reflect such reserves included in the
caption Liabilities Subject to Compromise. These reserves have been
established in accordance with Financial Accounting Standard Board Statement No. 5 and
Staff Accounting Bulletin No. 92. However, while these reserves represent
managements best estimate of these liabilities, and are based upon known or
anticipated claims analysis estimated by various legal, scientific and economic experts,
there is no assurance that these reserves will be adequate to meet all potentials claims
arising from the environmental contamination at the Lisle, Illinois site. In addition,
there can be no assurance that future claims for personal injury or property damage will
not be asserted by other plaintiffs against Met-Coil and Mestek with respect to the
Lockformer site and facility.

As
additional information and expert opinions become available to management, it may either
be able to revise its estimate of the range of exposure, with appropriate revision to
reserves taken, or continue to believe that no such better estimate is possible at the
time.

Remediation
- Lisle, IL:

Met-Coil
is continuing remediation of the Lockformer facility in Lisle, IL, pursuant to a Work Plan
for the site (on-site remediation) approved by the Environmental Protection
Agency (EPA) and is awaiting approval of the remedial standards to be achieved
by such Work Plan, as well as the methodology for groundwater remediation, from the IEPA.
In the quarter ended September 30, 2004, Met-Coil paid $1,521,000 in costs related to
on-site remediation, and has a remaining reserve of $7,300,000 as of September 30, 2004,
as described above, for future remediation costs.

In
light of the remaining uncertainties surrounding the effectiveness of the available
remediation technologies and the future potential changes in methodology, remedial
objectives and standards, still further reserves may be needed in the future with respect
to the on-site remediation of the Lisle facility. The complexity of aforementioned factors
makes it impossible at this time to further estimate any additional costs.

Other
Claims Alleging Releases of Hazardous Materials or Asbestos Related Liability

The
Company is currently a party to approximately 215 asbestos-related lawsuits, and in the
past nine months has been named in approximately 5 new such lawsuits each month, primarily
in one county in Illinois where numerous asbestos-related actions have been filed against
numerous defendants.

Almost
all of these suits seek to establish liability against the Company as successor to
companies that may have manufactured, sold or distributed asbestos-related products, and
who are currently in existence and defending thousands of asbestos related cases, or
because the Company currently sells and distributes boilers, an industry that has been
historically associated with asbestos-related products. The Company believes it has valid
defenses to all of the pending claims and vigorously contests that it is a successor to
companies that may have manufactured, sold or distributed any product containing asbestos
materials. However, the results of asbestos litigation have been unpredictable, and
accordingly, an adverse decision or adverse decisions in these cases, individually or in
the aggregate, could materially adversely affect the financial position and results of
operation of the Company and could expose the Company to substantial additional asbestos
related litigation and the defense costs thereof, which defense costs, because of the
sheer number of asbestos claimants and the historical course of the litigation process in
this area has the potential to become substantial, though these costs are not capable of
estimation at this time. The total requested damages of these cases are over $3 billion.
To date, however, the Company has had over 40 asbestos-related cases dismissed without any
payment and it settled approximately twenty-five asbestos-related cases for a de minimis
value. However, there can be no assurance the Company will be able to successfully defend
or settle any pending litigation.

In
addition to the Lisle, IL site, the Company has been named or contacted by state
authorities and/or the EPA regarding the Companys asserted liability or has
otherwise determined it may be required to expend funds for the remediation of certain
other sites in North Carolina, Connecticut and Pennsylvania. Such matters have been
previously described in greater detail in the Companys 2003 Report on Form 10-K.

The
Company continues to investigate all of these matters. Given the information presently
known, no estimation can be made of any liability which the Company may have with respect
to these matters. There can be no assurance, but based on the information presently
available to it, the Company does not believe that any of these matters will be material
to the Companys financial position or results of operations.

Warranty Commitments

Products
sold by the Company are covered by various forms of express limited warranty with terms
and conditions that vary depending upon the product. The express limited warranty
typically covers the equipment, replacement parts and, in very limited circumstances,
labor necessary to satisfy the warranty obligation for a period which is generally the
earlier of 12 months from date of installation or 18 months from date of shipment from the
Company factory, although some products or product components are warranted for periods
ranging from eighteen months to ten years. The Company estimates the costs that may be
incurred under its warranty obligations and records a liability in the amount of such
costs at the time product revenue is recognized. Factors that affect the Companys
warranty liability include the number of units sold, historical and anticipated rates of
warranty claims, and allowable costs per claim and recoveries from vendors. At least once
a quarter the Company assesses the adequacy of its recorded warranty liabilities and
adjusts the amounts as necessary. Costs to satisfy warranty claims are charged as incurred
to the accrued warranty liability.

Following
is a summary of changes in the Companys product warranty liability for the three
months ended September 30, 2004 and 2003.

|                               | Three months ended
September 30, |            
|------------------------------ | -------------------------------- | -----------
|
|Balance at beginning of period | $ 3,262,468                      | $ 2,769,672
|Provision for warranty claims  | 448,000                          | 180,000    
|Warranty claims incurred       | (320,000)                        | (213,000)  
|Balance at end of period       | $3,390,468                       | $2,736,672 

---

# Item 3. 
Quantitative and Qualitative Information about Market Risks

The
Companys operations are sensitive to a number of market factors, any one of which
could materially adversely affect its results of operations in any given year:

Construction
Activitythe Companys largest segment, its Heating, Ventilating, and Air
Conditioning (HVAC) segment, is directly affected and its other segment, Metal Forming, is
indirectly affected by commercial construction projects and residential housing starts.
Relatively lower interest rates in 2003, and 2004 to date, and strong residential and
institutional activity helped prevent what might otherwise have been a more pronounced
recessionary effect. Significant increases in interest rates, state and municipal
budgetary constraints or reductions in construction activity generally in future periods,
however, could be expected to adversely affect the Companys revenues, possibly
materially.

Manufacturing
Activity The Companys Metal Forming segment, as a manufacturer of capital
goods used in other manufacturing processes, is subject to significant cyclicality. The
Companys Metal Forming segment provides equipment used to hold, uncoil, straighten,
form, bend, cut and otherwise handle metal used in manufacturing operations; all
activities likely to be adversely effected in recessionary periods. The level of
manufacturing activity in the automotive, steel processing, metal furniture, sheet metal
fabrication, metal building and stamping industries, is particularly relevant to this
segment since its products are typically purchased to upgrade or expand existing equipment
or facilities. Expectations of future business activity are also particularly relevant.
Recent indications point to a leveling or light up tick in capital expenditures though the
machine tool industry appears to be lagging behind the capital goods market as a whole.

Credit
AvailabilityAlthough interest rates trended lower in 2003, and have been mixed in 2004
to date, reflecting the Federal Reserves monetary policy during this period, credit
availability has, reportedly, somewhat tightened for marginal business borrowers. As the
Companys customer base includes many small to medium sized business, a further
credit tightening through the commercial banking system could be expected, at some point,
to adversely effect the Companys sales, as was the case in the credit
crunch of 1990-1991. The Company is exploring arrangements whereby its Metal Forming
customers may be able to utilize lease financing arranged by the Company for the purchase
of certain capital equipment.

Technological
ChangesAlthough the HVAC industry has historically been impacted by technology
changes in a relatively incremental manner, it cannot be discounted that radical
changessuch as might be suggested by fuel cell technology, burner technology and/or
other developing technologiescould materially adversely effect the Companys
results of operations and/or financial position in the future.

Environmental
Laws Affecting Operations and Product DesignThe Companys operations and its
HVAC products that involve combustion as currently designed and applied entail the risk of
future noncompliance with the evolving landscape of Environmental Laws. The cost of
complying with the various Environmental Laws is likely to increase over time, and there
can be no assurance that the cost of compliance, including changes to manufacturing
processes and design changes to current HVAC product offerings that involve the creation
of carbon dioxide or other currently unregulated compounds emitted in atmospheric
combustion, will not over the long-term and in the future have a material adverse effect
on the Companys results of operations.

Weather
ConditionsThe Companys core HVAC segment manufactures heating, ventilating and
air conditioning equipment with heating products representing the bulk of the
segments revenues. As such, the demand for its products depends upon colder weather
and benefits from long winters and/or extreme cold. Severe climatic changes, such as those
suggested by the global warming phenomenon, could over time adversely effect
the Companys results of operation and financial position.

Globalization
 The continuing relocation of manufacturing activity to relatively lower wage
countries may over time adversely affect the Companys Metal Forming segment, which
makes equipment used in manufacturing operations, and which has well established
distribution systems in the United States but less well developed distributions systems in
other countries. The Companys HVAC and Metal Forming segments are also subject to
ongoing competitive pressures in the domestic marketplace from manufacturers of HVAC and
Metal Forming equipment in such lower wage countries. The Company is fully cognizant in
this regard of the need to expand its worldwide distribution and manufacturing
capabilities. All such activity is subject to global conflicts, disruptions in shipping
and trade policies and tariffs.

Purchasing
PracticesIt has been the Companys policy in recent years for high value
commodities to aggregate volumes with a sole source to achieve maximum cost reductions
while maintaining quality and service. This policy has been effective in reducing costs
but has introduced additional risk which could potentially result in short-term supply
disruptions or cost increases from time to time in the future.

Supply
DisruptionsThe Company uses a wide variety of materials in the manufacture of its
products, such as copper, aluminum and steel, as well as electrical and mechanical
components, controls, motors and other products. Management believes at present that it
has adequate sources of supply for its raw materials and components (subject to the
sole source risks described above under Purchasing Practices) and has not had
significant difficulty in obtaining the raw materials, component parts or finished goods
from its suppliers. Where the Company does utilize sole source procurement to obtain
favorable pricing, no industry segment of the Company is dependent on a single supplier,
the loss of which would have a material adverse effect on its business, although the
Companys policy of concentrating its purchasing volumes with fewer vendors increases
the risks of disruption in the event a vendor replacement is necessary, as explained
above.

Commodity
RisksThe purchase raw material commodities and is at risk for fluctuations in the
market price of those commodities. In connection with the purchase of major commodities,
principally copper and aluminum for manufacturing requirements, The Company enters into
commodity forward agreements to effectively hedge the cost of the commodity. This forward
approach is done for a portion of the Companys requirements, while the balance of
the transactions required for these two commodities are conducted in the cash market. The
forward agreements require the Company to accept delivery of the commodity in the
quantities committed, at the agreed upon forward price, and within the timeframe
specified. The cash market transactions are executed at the Companys discretion and
at current market prices. In addition to the raw material cost strategy described above,
the Company enters into fixed pricing agreements for the fabrication charges necessary to
convert these commodities into useable product

Interest
Rate SensitivityThe Companys borrowings are largely Libor or Prime Rate based.
The Company believes that a 100 basis-point increase in its cost of funds would not have a
material affect on the Companys financial statements taken as a whole.

---

# Item 4  Controls
and Procedures

(a)    
          Evaluation of Disclosure Controls and Procedures.

| | Subsequent
to the enactment in 2002 of the Sarbanes-Oxley Act, the Company established a Disclosure
Control Committee comprised currently of its Chief Legal Officer, its Associate General
Counsel, its Corporate Controller, its Corporate Manger of Internal Audit, and its Chief
Financial Officer. The Disclosure Control Committee on a quarterly basis reviews written
sub-attestations obtained from key financial and operating personnel, consults with
outside technical advisers as needed, and meets with the Companys CEO, among other
steps. As of the end of the period covered by this Quarterly Report on Form 10-Q, Company
Management, including the Chief Executive Officer and Chief Financial Officer, have
conducted an evaluation of the effectiveness of the design and operation of the
Companys Disclosure Controls and procedures as defined in the Rule 13a-15(e) of
Securities Exchange Act of 1934. Based on that evaluation, the Chief Executive Officer and
Chief Financial Officer have concluded that the Companys disclosure controls and
procedures are effective to provide reasonable assurance of achieving the purposes
described in Rule 13a-15(e), and no changes are required at this time.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

(b)    
          Changes in Internal Controls.

| | Subsequent
to the enactment in 2002 of the Sarbanes-Oxley Act, the Company undertook a review of its
internal controls, including its internal accounting controls. This process resulted in an
expanded Internal Control and Accounting Policy and Procedures Manual which has now been
widely disseminated within the Company. While numerous policies were clarified in this
manual, and some formerly informal policies were formalized in this manual, the Company
does not believe that any such changes represented corrective actions taken with regard to
significant deficiencies and material weaknesses. The Company believes that appropriate
corrective actions have been taken with respect to the significant deficiencies which were
disclosed in Item 9A of its Annual Report on Form 10-K for the period ending December 31,
2003, and there were no significant changes in the third quarter of 2004 in internal
controls or in factors that have materially affected or are reasonably likely to
significantly affect internal controls, subsequent to the date the Chief Executive Officer
and Chief Financial Officer completed their evaluation. Notwithstanding the foregoing, the
Company intends to continue the process of examining all internal accounting procedures
for the purposes of improvement of internal control and began in 2004 a program of
training a significant number of managers and staff to better assure compliance and to
improve the scope and application of its internal accounting controls.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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# PART II  OTHER
INFORMATION

# Item 1  Legal
Proceedings

The
Company is not presently involved in any litigation that it believes could materially and
adversely affect its financial condition or results of operations except as
described in Part I, Item 2  Managements Discussion and Analysis of Financial
Condition and Results of Operations-above and in Notes 7 and 8 above of the Companys
Condensed Consolidated Financial Statements, which are a part of this Quarterly Report on
Form 10-Q. No material legal proceedings were instituted or terminated in the quarter
ended on September 30, 2004, nor is the Company aware of any governmental agency investigations
or proceedings other than as discussed in Note 7 of the Companys Condensed
Consolidated Financial Statements, which are a part of this Quarterly Report on Form 10-Q

# Item 2  Changes in
Securities and Use of Proceeds

In
2004, the Company continued its program of selective open market purchases
acquiring 62,800 shares of its common stock in the three-month period ending June 30, 2004
at an average cost per share of approximately $16.21 and 61,700 shares of its common stock
in the three month period ended September 30, 2004 at an average cost of approximately
$16.73. All such shares were accounted for as treasury shares. The Company has
additionally acquired no shares in the period from October 1, 2004 through November 8,
2004.

# Item 6  Exhibits
and Reports on Form 8-K

# Exhibit

|No.  | Description                                                                                             
|---- | --------------------------------------------------------------------------------------------------------
|10.1 | Loan Agreement dated October 19, 2004 between Mestek, Inc. and its Lenders                              
|11.1 | Schedule of Computation of Earnings per common share                                                    
|31.1 | Certification of Chief Executive Officer of Mestek, Inc. pursuant to Rule                               
|     | 15d-14(a) promulated under the Securities Exchange Act of 1934, as amended.                             
|31.2 | Certification of Chief Financial Officer of Mestek, Inc. pursuant to Rule                               
|     | 15d-14(a) promulated under the Securities Exchange Act of 1934, as amended.                             
|32   | Certification of Chief Excecutive Officer and Chief Financial Officer of Mestek, Inc.,                  
|     | pursuant to 18 U.S.C. Section 1350 as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002.
|    

|(b) |  | Reports
on Form 8-K:
|--- |  | --------------------

| |  | The  Company
filed a Report on Form 8-K on August 13, 2004 relative to Results of Operations and
Financial Condition to report earnings for the quarter ended June 30, 2004.
| |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | The Company
filed a Report on Form 8-K on August 17, 2004 relative to the confirmation of the Fourth
Amended Chapter 11 Plan of Reorganization for the Company's second tier subsidiary,
Met-Coil Systems Corporation on August 17, 2004.
| |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | The Company
filed a Report on Form 8-K on October 19, 2004 relative to the entry into a material
definitive agreement and creation of a direct financial obligation and relative to the
effective date of the Met-Coil Bankruptcy Reorganization Plan.
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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# SIGNATURES

Pursuant to the requirements of the
Securities Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.





|Date: November 12, 2004 |  | MESTEK, INC.(Registrant)
BY: /S/ Stephen M. Shea
Stephen M. SheaSenior Vice President - Financeand CFO (Chief Financial Officer)
|----------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------