UNITED STATESSECURITIES
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 June 30, 2005

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) | (I.R.S. Employer Identification No.)

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

413-568-9571Registrant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 August
1, 2005 was 8,732,125.

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.

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MESTEK, INC.

QUARTERLY REPORT ON
FORM 10-QFOR THE SIX MONTHS ENDED JUNE 30, 2005

INDEX

|PART I - FINANCIAL INFORMATION                                       | Page No.
|-------------------------------------------------------------------- | --------
|Item 1 - Financial Statements                                        |         
|Condensed consolidated balance sheets at June 30, 2005 (unaudited)  
|and December 31, 2004 (audited)                                      | 3-4     
|Condensed consolidated statements of operations for the             
|three-months ended June 30, 2005 and 2004 and the                   
|six-months ended June 30, 2005 and 2004 (unaudited)                  | 5       
|Condensed consolidated statements of cash flows for the             
|six-months ended June 30, 2005 and 2004(unaudited)                   | 6       
|Notes to the condensed consolidated financial statements (unaudited) | 7-27    
|Item 2- Management's Discussion and Analysis of Financial Condition 
|and Results of Operations                                            | 28-46   
|Item 3 - Quantitative and Qualitative Information About Market Risks | 47      
|Item 4 - Controls and Procedures                                     | 47      
|PART II - OTHERINFORMATION                                           |         
|Item 1 - Legal Proceedings                                           | 48      
|Item 4 - Submission of Matters to Vote of Security Holders           | 48      
|Item 6 - Exhibits and Reports on Form 8-K                            | 49      
|SIGNATURE                                                            | 50      

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.

Page 2

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# PART I - FINANCIAL INFORMATION

Item
1 - Financial Statements

# MESTEK, INC.
                                       CONDENSED CONSOLIDATED BALANCE SHEETS

|                                                 | June 30,
2005
(Unaudited) | December 31,
2004
|------------------------------------------------ | ------------------------- | -----------------
|
|ASSETS                                           |                           |                  
|Current Assets                                  
|Cash and Cash Equivalents                        | $3,151                    | $1,952           
|Accounts Receivable - less allowances of,       
|$2,641 and $2,649 respectively                   | 55,668                    | 51,997           
|Inventories                                      | 64,987                    | 59,531           
|Deferred Tax Assets                              | 13,414                    | 14,232           
|Income tax Refund Receivable                     | 1,152                     | 1,152            
|Other Current Assets                             | 7,027                     | 8,020            
|Omega Flex Assets Held for Spin-Off (see Note 8) | 16,153                    | 14,608           
|Total Current Assets                             | 161,552                   | 151,492          
|Property and Equipment - net                     | 51,331                    | 48,149           
|Property Held for Sale                           | 1,275                     | 1,297            
|Deferred Tax Asset                               | 5,182                     | 6,980            
|Other Assets and Deferred Charges - net          | 4,703                     | 4,313            
|Goodwill                                         | 18,066                    | 18,130           
|Omega Flex Assets Held for Spin-Off (see Note 8) | 15,674                    | 25,795           
|Total Assets                                     | $257,783                  | $256,156         

See the Notes to
Condensed Consolidated Financial Statements

Page 3

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# MESTEK, INC.CONDENSED
CONSOLIDATED BALANCE SHEETS (continued)

|                                                        | June 30,
2005
(Unaudited) | December 31,
2004
|------------------------------------------------------- | ------------------------- | -----------------
|
|LIABILITIES, AND SHAREHOLDERS' EQUITY                   |                           |                  
|Current Liabilities                                    
|Short Term Notes Payable                                | $32,000                   | $20,000          
|Current Portion of Long-Term Debt                       | 509                       | 582              
|Accounts Payable                                        | 13,873                    | 15,760           
|Accrued Expenses                                        | 14,125                    | 13,938           
|Reserve for Equity Investment Losses                    | 4,000                     | 4,000            
|Customer Deposits                                       | 10,967                    | 8,007            
|Environmental Reserves                                  | 2,000                     | 4,244            
|Other Accrued Liabilities                               | 13,630                    | 14,636           
|Omega Flex Liabilities related to Spin-Off (see Note 8) | 9,371                     | 12,645           
|Total Current Liabilities                               | 100,475                   | 93,812           
|Environmental Reserves                                  | 19,445                    | 20,445           
|Long-Term Debt                                          | 3,601                     | 3,802            
|Pension Obligations                                     | 1,208                     | 1,208            
|Other Liabilities                                       | 6,444                     | 16,672           
|Omega Flex Liabilities related to Spin-Off (see Note 8) | 3,513                     | 3,719            
|Total Liabilities                                       | 134,686                   | 139,658          
|Minority Interests                                      | 748                       | 774              
|Shareholders' Equity                                   
|Common Stock - no par, stated value $0.05 per share,   
|9,610,135 shares issued                                 | 479                       | 479              
|Paid in Capital                                         | 16,938                    | 15,434           
|Retained Earnings                                       | 116,836                   | 112,165          
|Treasury Shares, at cost, (878,010 and 1,010,032       
|common shares, respectively)                            | (11,293)                  | (12,103)         
|Accumulated Other Comprehensive Loss                    | (611)                     | (251)            
|Total Shareholders' Equity                              | 122,349                   | 115,724          
|Total Liabilities and Shareholders' Equity              | $257,783                  | $256,156         

See the Notes to Condensed
Consolidated Financial Statements.

Page 4

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# MESTEK, INC.CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

|                                                             | Three Months Ended
June 30, | Six Months Ended
June 30,
|------------------------------------------------------------ | --------------------------- | -------------------------
|
|
|Net Sales                                                    | $90,536                     | $86,434                  
|Cost of Goods Sold                                           | 66,894                      | 64,048                   
|Gross Profit                                                 | 23,642                      | 22,386                   
|Selling Expense                                              | 11,364                      | 11,844                   
|General and Administrative Expense                           | 5,168                       | 4,422                    
|Engineering Expense                                          | 3,441                       | 3,463                    
|Environmental Litigation/Remediation                         |                            | 468                      
|Plant Shutdown Expense and Other Restructuring Charges       | 413                         | 519                      
|Operating Profit before Reorganization Items                 | 3,256                       | 1,670                    
|Subsidiary Bankruptcy Professional Fees                      | 36                          | 3,581                    
|Operating Profit (Loss)                                      | 3,220                       | (1,911)                  
|Interest Income (Expense) net                                | (388)                       | (318)                    
|Other Income (Expense) - net                                 | (257)                       | (243)                    
|Income (Loss) from Continuing Operations Before Income Taxes | 2,575                       | (2,472)                  
|Income Tax Expense (Benefit)                                 | 977                         | (870)                    
|Income (Loss) from Continuing Operations                     | $1,598                      | ($1,602)                 
|Discontinued Operations (See Note 8):                       
|Income from Operations of Discontinued                      
|Business Before Taxes                                        | 3,014                       | 1,958                    
|Applicable Income Tax Expense                                | 1,280                       | 823                      
|Income from Operations of Discontinued Business              | 1,734                       | 1,135                    
|Net Income (Loss)                                            | $3,332                      | ($467)                   
|Basic Earnings (Loss) Per Common Share:                     
|Continuing Operations                                        | 0.19                        | (0.18)                   
|Discontinued Operations                                      | 0.20                        | 0.13                     
|Net Income                                                   | $0.39                       | ($0.05)                  
|Basic Weighted Average Shares Outstanding                    | 8,628                       | 8,707                    
|Diluted Earnings (Loss) Per Common Share:                   
|Continuing Operations                                        | 0.19                        | (0.18)                   
|Discontinued Operations                                      | 0.20                        | 0.13                     
|Net Income (Loss)                                            | $0.39                       | ($0.05)                  
|Diluted Weighted Average Shares Outstanding                  | 8,628                       | 8,707                    

See the Notes to Condensed
Consolidated Financial Statements.

Page 5

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# MESTEK, INC.CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

|                                                                              | Six Months Ended
June 30,
|----------------------------------------------------------------------------- | -------------------------
|
|
|Cash Flows from Continuing Operating Activities:                              |                          
|Net Income (Loss) from Continuing Operations                                  | $1,483                   
|Adjustments to Reconcile Net Income (Loss) to                                
|Net Cash Provided by Operating Activities:                                   
|Depreciation and Amortization                                                 | 3,805                    
|Provision for Losses on Accounts                                             
|Receivable, net of write offs & recoveries                                    | (8)                      
|Non Cash Stock-Based Compensation                                             | 788                      
|Change in Assets And Liabilities Net Of Effects of Acquisitions Dispositions:
|Accounts Receivable                                                           | (3,663)                  
|Inventory                                                                     | (5,456)                  
|Accounts Payable                                                              | (1,887)                  
|Other Liabilities                                                             | (954)                    
|Other Assets                                                                  | 3,283                    
|Net Cash Provided by (Used in) Continuing Operating Activities                | (2,609)                  
|Net Cash Provided by (Used in) Discontinued                                  
|Operations (see Note 8)                                                       | (1,411)                  
|Cash Flows from Investing Activities:                                        
|Capital Expenditures                                                          | (6,965)                  
|Net Cash Provided by (Used in) Continuing Investing Activities                | (6,965)                  
|Net Cash Provided by (Used in) Investing Activities                          
|of Discontinued Operations (see Note 8)                                       | (539)                    
|Cash Flows from Financing Activities:                                        
|Net Borrowings (Payments) Under Revolving Credit Agreements                   | 12,000                   
|Principal Payments Under Long-Term Debt Obligations                           | (274)                    
|Common Stock Repurchased                                                      |                       
|Increase (decrease) in Minority Interests                                     | (26)                     
|Net effect on Shareholders' Equity from Stock Option                         
|Activity (see Note 10)                                                        | 1,526                    
|Net Cash Provided by (Used in) Continuing Financing Activities                | 13,226                   
|Net Cash Provided by (Used in) Financing Activities                          
|Discontinued Operations (see Note 8)                                          | (92)                     
|Net Increase (Decrease) in Cash and Cash Equivalents                          | 1,610                    
|Translation Effect on Cash                                                    | (411)                    
|Cash and Cash Equivalents - Beginning of Period                               | 1,952                    
|Cash and Cash Equivalents - End of Period                                     | $3,151                   

See the Notes to Condensed
Consolidated Financial Statements.

Page 6

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# 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 a fair statement of results for the three-
and six-month period ended June 30, 2005 and 2004.

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,
2004. Accordingly, Note disclosures that would substantially duplicate the disclosures
contained in the latest audited financial statements have been omitted from this filing.
See Note 8 for a discussion of the Companys Spin-Off on July 29, 2005 of its
subsidiary, Omega Flex, Inc., and the related financial presentation.

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 accounts for stock-based compensation in accordance with 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 except as explained below.

As
of January 1, 2003, the Company adopted the disclosure requirements of FAS No 148,
Accounting for Stock-Based Compensation  Transition and Disclosure. The Company made
no option grants, modifications of option grants, or settlement of option grants during
the three-month period ended June 30, 2005 or June 30, 2004.

Page 7

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On
October 27, 2004, the Company changed the exercise price of 25,000 options expiring in
2011 from $23.25 per share to the then current market value of $17.85 per share, and
70,000 additional options expiring in 2009 from $20.00 per share to the then current
market value of $17.85 per share. The Company has accounted for these options subsequent
to October 27, 2004 using variable accounting which resulted in a pre-tax
charge to earnings of $323,000 and $788,000 in the second quarter and first six months of
2005, respectively. For the purpose of the pro forma below, the effect of the above
re-pricing was also included in the computation of compensation cost under the fair value
method described below.

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 income and earnings per share
would have been as follows:

|                                                        | Three-months Ended
June 30 | Six-months Ended
June 20
|------------------------------------------------------- | -------------------------- | ------------------------
|
|
|Net (loss) Income - as reported                         | $3,332                     | ($467)                  
|Plus:  Stock-based compensation reflected in net income | 370                        | 103                     
|Less:  Compensation expense                             | (16)                       | (18)                    
|Net (loss) Income - pro forma                           | $3,686                     | ($382)                  
|Basic (Loss) Income per share - as reported             | $0.39                      | ($ 0.05)                
|Plus:  Stock-based compensation reflected in net income | 0.05                       | 0.01                    
|Less:  Compensation expense                             | ---                        | ---                     
|Basic (Loss) Income per share - - pro forma             | $0.43                      | ($0.04)                 
|Diluted (Loss) Income per share - as reported           | $0.39                      | ($0.05)                 
|Plus:  Stock-based compensation reflected in net income | 0.04                       | 0.01                    
|Less:  Compensation expense                             | ---                        | ---                     
|Diluted (Loss) Income per share - - pro forma           | $0.43                      | ($0.04)                 

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. Cash paid for income taxes was $1,063,000 and
$409,000 during the six-months ended June 30, 2005 and 2004, respectively.

Other Comprehensive
Income (Loss)

For
the three- and six-months ended June 30, 2005 and 2004, respectively, the components of
other comprehensive loss consisted of foreign currency translation adjustments, and
mark to market adjustments relating 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
($375,000) and ($39,000), for the three months ended June 30, 2005 and 2004, respectively
and ($360,000) and ($229,000), for the six-months ended June 30, 2005 and 2004,
respectively.

Page 8

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Reclassification

Reclassifications
have been made to previously issued financial statements to conform to the current year
presentation. See Note 8 relating to the Discontinued Operations presentation for the
Companys Omega Flex, Inc. subsidiary which was spun-off on July 29,
2005.

Recent Accounting
Pronouncements

In
December 2004, the FASB issued SFAS No. 123(R), Share-Based Payment. SFAS No. 123(R)
amends SFAS No. 123 to require that companies record as expense the effect of equity-based
compensation, including stock options over the applicable vesting period. We currently
disclose the effect on income that stock options would have were they recorded as expense.
SFAS No. 123(R) also requires more extensive disclosures concerning stock options than
required under current standards. The new rule applies to option grants made after a
companys adoption of the standard, as well as options that are not vested at the
date of adoption. SFAS No. 123(R) becomes effective in our case not later than the
beginning of the fiscal year that begins after December 15, 2005. We do not currently
expect to elect early adoption of this standard and have not determined whether we will
apply this new standard prospectively in the first quarter of 2006, retroactively from the
beginning of 2006, or on a restated basis for all prior periods on a comparable basis. We
do not expect that the adoption of SFAS No. 123(R) will have a material impact on our
future results of operations.

In
May 2005, the FASB issued FASB Statement No. 154, Accounting Changes and Error
Corrections, a replacement of APB Opinion No. 20 and FASB Statement No. 3 (SFAS No.
154). Previously, APB No. 20, Accounting Changes and SFAS No. 3,
Reporting Accounting Changes in Interim Financial Statements required the
inclusion of the cumulative effect of changes in accounting principle in net income of the
period of the change. SFAS No. 154 requires companies to recognize a change in accounting
principle, including a change required by a new accounting pronouncement when the
pronouncement does not include specific transition provisions, retrospectively to prior
periods financial statements. The Company will assess the impact of a retrospective
application of a change in accounting principle in accordance with SFAS No. 154 when such
a change arises after the effective date of January 1, 2006.

Page 9

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# Note 2  Inventories

|                                          | June 30,2005
(unaudited) | December 31,2004
(audited)
|----------------------------------------- | ------------------------ | --------------------------
|
|
|Finished Goods                            | $20,175                  | $18,074                   
|Work-in-progress                          | 24,445                   | 23,638                    
|Raw materials                             | 32,491                   | 29,150                    
|                                          | 77,111                   | 70,862                    
|Less reserve for LIFO method of valuation | (12,124)                 | (11,331)                  
|                                          | $64,987                  | $59,531                   

The
Company uses the last-in first-out (LIFO) method of valuing substantial portions of its
inventory. An actual valuation of inventory under the LIFO method can be made only at the
end of each year based on the inventory levels and costs at that time. Accordingly,
interim LIFO calculations are based on managements estimates of expected year-end
inventory levels and costs and are subject to the final year-end LIFO inventory valuation.

# Note 3  Debt

|                         | June 30,2005
(unaudited) | December 31,2004
(audited)
|------------------------ | ------------------------ | --------------------------
|
|
|Revolving Loan Agreement | $32,000                  | $20,000                   

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 June 30, 2005 and December 31, 2004, 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 June 30, 2005, $16,978,000 in standby letters of credit issued in
connection with the Met-Coil bankruptcy reorganization plan, as more fully explained in
Note 6, and $8,577,000 issued principally in connection with its commercial insurance
programs. The balance outstanding under the facility was $32,000,000 at June 30, 2005.

Page 10

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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 as a cash flow hedge 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 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 $47,000 in Other Comprehensive Income (Loss) during the three-month period ended
June 30, 2005 and an after tax credit of $248,000 during the three-month period ended June
30, 2004, reflecting interest rate fluctuations during these period. 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.

Page 11

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Long-term Debt:

Long-term
debt consisted of the following:

|                            | June 30,2005
(unaudited) | December 31,2004
|--------------------------- | ------------------------ | ----------------
|
|
|Industrial Development Bond | $4,050                   | $4,297          
|Other Notes Payable         | 60                       | 87              
|                            | 4,110                    | 4,384           
|Less Current Maturities     | (509)                    | (582)           
|Long Term Debt              | $3,601                   | $3,802          

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.

Omega
Flex, Inc. Long Term Debt The following indebtedness is included in Omega
Flex Liabilities Related to Spin-off on the accompanying June 30, 2005 and December
31, 2004 balance sheets: (See Note 8.)

Note
Payable-Sovereign Bank On April 16, 2004, the Companys former 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,
in part, 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. Omega was
spun-off from the Company as of July 29, 2005 (see Note 8). Accordingly, this
obligation will no longer appear on the Companys books or records. Certain
inter-company dividends paid from Omega to Mestek in 2004 and 2005, prior to the
spin-off transaction described in more detail in Note 8, caused Omega to be in
technical default of two loan covenants relating to this note payable for certain periods.
Based on discussions with Sovereign Bank, Mestek and Omega are expecting that the bank
will waive such defaults. The Company believes that Omega is in compliance with all
required covenants as of June 30, 2005.

Cash
paid for interest was $744,000 and $265,000 during the six-months ended June 30, 2005, and
2004, respectively.

Page 12

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# 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. The
HVAC Segment sells its products to independent wholesale supply distributors, mechanical,
sheet metal and other contractors and, in some cases, to other HVAC manufacturers under
original equipment manufacture (OEM) agreements and direct to certain
retailers pursuant to national account agreements. The HVAC Segment is comprised of three
interrelated HVAC product groups: Hydronics Products, Gas and Industrial Products, and Air
Distribution and Cooling Products.

The
Metal Forming Segment, operating under the umbrella name Formtek, is comprised
of several subsidiaries and divisions, 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).

The
HVAC and Metal Forming Segments are described in greater detail in Note 11 to the
Companys 2004 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 (Operating Profit), 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 11 to the Companys 2004 Consolidated Financial
Statements.

Page 13

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Information
presented in the following tables relates to continuing operations only. Operating data
related to the HVAC segments Omega Flex, Inc. subsidiary have been reclassified to
Discontinued Operations (see Note 8) in accordance with SFAS 144.

Three Months ended June 30, 2005: (in
thousands)

|                                 | HVAC | Metal
Forming | All
Other | Totals 
|-------------------------------- | ---- | ------------- | --------- | -------
|
|Revenues from External Customers |      | $63,101       |           | $27,435
|Segment Operating Profit (Loss)  |      | $2,854        | **        | $366   

* includes $316 in plant shutdown
expenses in accordance with FAS 146, as more fully described in Note 9.

** includes $97 in professional fees
related to the Omega Flex spin-off and Mestek Going Private transactions, as
more fully described in Note 8.

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

|                                 | HVAC | Metal
Forming | All
Other | Totals  
|-------------------------------- | ---- | ------------- | --------- | --------
|
|Revenues from External Customers |      | $65,060       |           | $21,374 
|Segment Operating Profit (Loss)  |      | $1,787        | **        | ($3,698)

* includes $468 in environmental
litigation and remediation expenses and $3,581 in subsidiary bankruptcy professional fees,
as more fully described in Notes 6 and 7.

** includes $519 in plant shutdown
expenses in accordance with FAS 146, as more fully described in Note 9.

Page 14

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Six Months ended June 30, 2005:(in
thousands)

|                                 | HVAC | Metal
Forming | All
Other | Totals  
|-------------------------------- | ---- | ------------- | --------- | --------
|
|Revenues from External Customers |      | $127,768      |           | $47,649 
|Segment Operating Profit (Loss)  |      | $5,135        | **        | ($1,462)

* includes $437 in subsidiary
bankruptcy professional fees and $564 in plant shutdown expenses in accordance with FAS
146, as more fully described in Notes 7 and 9.

** includes $337 in professional fees
related to the Omega Flex spin-off and Mestek Going Private transactions, as
more fully described in Note 8.

Six Months ended June 30, 2004:(in
thousands)

|                                 | HVAC | Metal
Forming | All
Other | Totals  
|-------------------------------- | ---- | ------------- | --------- | --------
|
|Revenues from External Customers |      | $123,498      |           | $45,380 
|Segment Operating Profit (Loss)  |      | $2,926        | **        | ($7,382)

* includes $687 in environmental
litigation and remediation expenses and $7,023 in subsidiary bankruptcy professional fees,
as more fully described in Notes 6 and 7.

** includes $855 in plant shutdown
expenses in accordance with FAS 146, as more fully described in Note 9.

HVAC Segment Revenues by HVAC Product
Group:

|                                      | Three Months ended
June 30: | Six Months ended
June 30:
|------------------------------------- | --------------------------- | -------------------------
|
|
|Hydronics Products                    | $29,648                     | $29,380                  
|Air Distribution and Cooling Products | 22,340                      | 24,050                   
|Gas and Industrial Products           | 11,113                      | 11,630                   
|Total HVAC Segment Revenues           | $63,101                     | $65,060                  

Page 15

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# Note 5  Retirement
Plans

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. Due to recent adverse investment performance and reduced expectations of future
investment earnings, the combined Met-Coil Plans administrator has determined that
the Accumulated Benefit Obligation, the present value of future pension obligations to
Met-Coil Plan participants, exceeds the fair market value of the Met-Coil Plans
assets as of December 31, 2004 and 2003. In accordance with the requirements of FAS 87,
Employers Accounting for Pensions, the Company has recorded charges in 2004 and 2003
net of related tax benefit, to the Shareholders Equity section of the consolidated
Balance Sheet contained herein of $8,000, and $205,000 respectively, under the heading
Additional Minimum Liability-Defined Benefit Plan. For the quarters ending
June 30, 2005 and 2004, the Company recorded pension expense of $13,799 and $15,662,
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. The Airtherm LLC Retirement Income Plan was
frozen prior to acquisition in a manner similar to the Met-Coil Plans
described above. In accordance with the requirements of FAS 87, Employers Accounting
for Pensions, the Company recorded charges in 2004 and 2003, net of related tax benefits,
to the Shareholders Equity section of the Consolidated Balance Sheet contained herein of
$164,000 and $42,000, respectively, relating to the Airtherm LLC Retirement Income Plan
under the heading Additional Minimum Liability-Defined Benefit Plan. Pension expense
(benefit) under the Airtherm LLC Retirement Income Plan was $695 for the quarter ended
June 30, 2005, and ($488) for the quarter ended June 30, 2004.

The
Company uses a December 31, 2004 measurement date for the Airtherm LLC Retirement Income
Plan and September 30, 2004 for the Met-Coil Plan.

Page 16

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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
Three months endedJune 30, 2005 | Airtherm
Three months endedJune 30, 2005
|------------------------------- | ---------------------------------------- | ----------------------------------------
|
|Service cost                    | $---                                     | $---                                    
|Interest cost                   | 66,201                                   | 51,806                                  
|Expected Return on Plan Assets  | 67,944                                   | 51,111                                  
|Amortization of Unrecognized   
|Transition (Asset) Obligation   | ---                                      | ---                                     
|Amortization of net (Gain) Loss | 14,461                                   | ---                                     
|Other                           | 1,081                                    | ---                                     
|Net Periodic Benefit Cost       | $13,799                                  | $695                                    

# Note 6 Commitments,
Contingencies and Warranties

Indemnifications

The
Company is obligated under Indemnity Agreements (Indemnity Agreements)
executed on behalf of 23 of the Companys Officers and Directors. Under the terms of
the Indemnity Agreements, the Company is contingently liable for costs which may be
incurred by the Officers and Directors in connection with claims arising by reason of
these individuals roles as Officers and Directors.

The
Company is obligated under the Indemnity and Guaranty Agreement with Airtherm Products,
Inc. (Airtherm) to indemnify Airtherm against certain claims arising out of
the acquisition of Airtherm in August 2001, including potential claims involving alleged
violations of the Worker Adjustment and Retraining Notification Act (WARN
Act). Certain former employees of Airtherm have filed suit alleging such WARN Act
claims, and defense of the matter was tendered by Airtherm to the Company pursuant to the
above indemnity agreement. The U.S. District Court in Arkansas subsequently awarded
summary judgment to plaintiffs, and assessed liability of approximately $520,000, plus
interest and attorneys fees. The Company has appealed the summary judgment verdict
on behalf of Airtherm to the Eighth Circuit Court of Appeals. The matter is being briefed
and will be scheduled for oral argument later this year. The Company expects that the
trial court judgment will be overturned as being inconsistent with the statute and prior
judicial decisions.

Page 17

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Contingencies

The
Company is contingently liable under standby letters of credit totaling approximately
$25,555,000 issued principally in connection with its commercial insurance coverages and
in connection with the funding of the Met-Coil TCE PI Trust discussed below.

The
Company retains significant obligations under its commercial general liability insurance
policies for product liability and other losses. For losses occurring in the policy years
ending October 1, 2004 and October 1, 2005, the Company maintains commercial general
liability insurance, retaining liability for the first $2,000,000 per occurrence of
commercial general liability claims (including products liability claims), subject to an
agreed aggregate. For losses occurring in the policy year ended October 31, 2003, the
Company retained liability for the first $500,000 per occurrence of commercial general
liability claims (including product liability), subject to an agreed aggregate. In
addition, the Company retained liability for the first $250,000 per occurrence of workers
compensation coverage, subject to an agreed aggregate.

The
Company is obligated as a guarantor with respect to certain potential debt obligations of
CareCentric, Inc. (formerly Simione Central Holdings, Inc.) to CareCentrics primary
commercial bank, Wainwright Bank & Trust Company, in the amount of $4 million. The $4
million Wainwright credit line is secured by substantially all of CareCentrics
assets and the Companys guarantee expires coincident with the credit line on August
31, 2005. The actual balance outstanding under CareCentrics credit line with
Wainwright Bank & Trust Company as of June 30, 2005 was $400,000. Under the Equity
Method of Accounting, in December 2001, the Company accrued this guarantee (originally in
the amount of $6 million and now reduced to $4 million) as a reserve for Equity Investment
Losses. John E. Reed, the Companys Chairman and Chief Executive Officer, is a
shareholder and director of Wainwright Bank & Trust Company.

Litigation

The
Company is subject to several legal actions and proceedings in which various monetary
claims are asserted. 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.

Berry, et al. v. Titeflex Corp., et
al.

Case No. CV-2004-211,
Circuit Court of Clark County, Arkansas, filed November 15, 2004.Defendant: Omega
Flex, Inc., a Pennsylvania Corporation

Four
individual residents of Arkansas and an individual Texas resident have sued the top four
manufacturers of corrugated stainless steel tubing (CSST), including the
Companys former subsidiary Omega Flex, Inc. (Omega), the manufacturer of
TracPipe®-brand CSST which was spun-off to the Companys shareholders, pro rata,
by stock distribution on July 29, 2005. The complainant proposes a national class action
on behalf of all owners of installed CSST. Installed CSST is alleged to be defective
because it is alleged to be more susceptible to failure from near-lightning strikes than
traditional black iron pipe and because the manufacturers allegedly failed to warn of
CSSTs allegedly heightened susceptibility. The Company is not a named defendant and
does not expect to have any liability under this action as the matter remains with Omega
which was spun-off by the Company on July 29, 2005, in a transaction unrelated to this
litigation more fully described in Note 8.

Page 18

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Omega
has filed motions to dismiss the amended complaint and the cross-complaint of the
individual Arkansas plumber defendant, who likewise proposed a class action cross-claim on
behalf of installers of CSST. Full discovery is proceeding and disposition of the class
certification issue is expected in 2006. Omega will oppose both class certification and
any request for a national class. The Company believes Omega has valid defenses to the
issues of both class certification and product liability and Omega will contest these
claims vigorously. At this time the Company believes that no estimation of Omegas
potential liability in the matter can be reasonably made. It is the nature of class action
litigation in general, and, accordingly, this matter in particular, that if there should
be an adverse decision on the issue of certification of a national class of CSST owners
and an adverse decision on the issue of product liability, the financial position and
results of operation of Omega could be materially adversely affected.

Subsidiary 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, now Met-Coil
Systems, LLC (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, including the
class action captioned Mejdrech, et al. v. The Lockformer Company, et al. and all other
personal injury and indemnification actions brought against the Company relating to the
alleged release of TCE.

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.
Pursuant to the Amended Plan, the Company and Met-Coil are committed to fund up to $26
million (on a present value basis) to the TCE PI trust over time and based on actual
claims paid. 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. Approximately 540 exposure
only claims have been approved by the TCE Trust in an aggregate amount of $1,411,146
for the year to date June 30, 2005 and two personal injury claims have been paid in the
aggregate amount of $15,000.

Page 19

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The
Companys Environmental and Litigation Reserve related to this matter as of the year
ended December 31, 2004 was approximately $24.7 million. The reserve as of the quarter
ended June 30, 2005 was approximately $21.4 million. The reduction in the reserve includes
approximately $522,000 for remediation related expenditures and $639,000 in payments to
claimants under the TCE PI Trust during the three months ended June 30, 2005. Based on
recent estimates of ongoing remediation costs, and reflecting reductions in the reserve
for expenditures incurred in the quarter ending June 30, 2005, the remediation portion of
the reserve as of June 30, 2005 is $ 5,913,000, which amount is included in the $ 21.4
million reserve discussed above. The reserve balance at June 30, 2005 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 at this time. 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. See Remediation
 Lisle, IL section below.

Remediation  Lisle,
IL:

Met-Coil
has completed the hook-up of all but a few specified residences to public water supply,
has received confirmation from the USEPA of the completion of soil remediation and
decommissioning of the SRH system under the Work Plan for the site, and is continuing with
the remediation of the Lockformer facility in Lisle, IL, pursuant to a Work Plan for the
site (on-site remediation) while awaiting approval from the IEPA of the ground
water remedial standards to be achieved by such Work Plan, as well as the methodology for
groundwater remediation. The Company has guaranteed to the IEPA up to $3 million of
remediation costs incurred by either Met-Coil or, if Met-Coil fails to perform the
remediation, the IEPA.

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.

Page 20

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The
Companys Environmental Litigation and Remediation Reserve is comprised of the
following:

|                                                       | June 30,2005 | December 31,2004
|------------------------------------------------------ | ------------ | ----------------
|
|Estimated Future Remediation costs                     | $5,913       | $7,018          
|The Illinois Actions, The Honeywell Claims,           
|The Attorney General Action                           
|and all matters related to pending                    
|future personal Injury claims in the Lockformer area   | ---          | 1,500           
|Potential Future Obligations to the TCE PI Trust       | 15,532       | 16,171          
|Total Environmental Litigation and Remediation Reserve | $21,445      | $24,689         

Based
on claim experience through June 30, 2005 the Company has reclassified $20,445,000 of the
above reserve to non-current as of December 31, 2004 and has classified $19,445,000 of the
reserve as non-current as of June 30, 2005.

# Other Claims Alleging
Releases of Hazardous Materials or Asbestos Related Liability

The
Company is currently a party to over 100 asbestos-related lawsuits, and in the past
three-months has been named in approximately 20 new such lawsuits each month, primarily in
Texas where numerous asbestos-related actions have been filed against numerous defendants.
The lawsuits previously pending against the Company in Illinois have all been resolved by
plaintiffs dismissals without payment.

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 approximately 300 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.

Page 21

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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.

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-
and six-month periods ended June 30, 2005 and 2004.

|                               | Three-months ended
June 30, | Six-months ended
June 30,
|------------------------------ | --------------------------- | -------------------------
|
|
|Balance at beginning of period | $3,882                      | $2,635                   
|Provision for warranty claims  | 555                         | 1,049                    
|Warranty claims incurred       | (509)                       | (422)                    
|Balance at end of period       | $3,928                      | $3,262                   

Page 22

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# Note 7  Subsidiary
Bankruptcy

As
a result of the environmental litigation described more fully in Note 6, 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 did
not deconsolidate 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 6.

The
Company as a whole incurred $36,000 and $3,581,000 in legal costs during the three-months
ended June 30, 2005 and 2004, respectively, and $437,000 and $7,023,000 in the six-months
ended June 30, 2005 and 2004, respectively, relating to the administration of
Met-Coils Bankruptcy, which amounts are reported in the accompanying financial
statements under the heading Subsidiary Bankruptcy Professional Fees.

# Note 8  Omega Flex
Spin-Off/Mestek Going Private

Omega Flex
Spin-Off/Discontinued Operations Presentation

On
January 19, 2005, the Company announced that John E. Reed, the Chairman and Chief
Executive Officer of the Company, proposed to a Special Committee of independent directors
appointed at the Companys December 14, 2004 regular Board meeting, (the
Special Committee), acting on behalf of the Board of Directors, that the
Companys 86% equity interest in Omega Flex, Inc. (Omega) be spun-off,
pro rata, to all of the Companys public shareholders as of a record date to be
established (the Spin-Off). In conjunction with the planned Spin-Off, Omega,
on April 29, 2005, filed a preliminary registration statement on Form 10 with the
Securities and Exchange Commission under the Securities Exchange Act of 1934. On July 22,
2005, Omega filed its final registration statement on Form 10 with the Securities and
Exchange Commission and completed the Spin-Off on July 29, 2005. Omega common shares began
trading on the NASDAQ National Market under the trading symbol OFLX on August
1, 2005.

Page 23

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The
operations of Omega are separately reported in accordance with Statement of Financial
Accounting Standard No. 144 (FAS 144), Accounting for the Impairment or Disposal of
Long-Lived Assets in the accompanying Condensed Consolidated Statements of Income
for the three and six-month periods ended June 30, 2004 and 2005, under the heading Income
From Discontinued Operations. Omega assets and liabilities are separated reported in the
accompanying Condensed Consolidated Balance Sheets in accordance with FAS 144. Omega was
formerly included in the Companys HVAC segment. Interest expense has been allocated
to the operations of Omega based on the relationship of Omegas assets to the
Companys consolidated assets at the end of each reporting period. Corporate General
& Administrative expenses originally allocated to Omega totaling $148,000 and $273,000
for the three and six month periods ended June 30, 2005, respectively, and $150,000 and
$265,000 for the three and six month period ended June 30, 2004, respectively, have been
reallocated to the Companys continuing operations.

Summarized
financial information for the discontinued Omega operations is as follows:

|                                                       | Three Months ended
June 30: | Six Months ended
June 30:
|------------------------------------------------------ | --------------------------- | -------------------------
|
|
|Operating Revenues                                     | $15,240                     | $11,040                  
|                                                      
|Income before Provision forIncome Taxes                | $3,014                      | $1,958                   
|                                                      
|Income from Discontinued OperationsNet of Income Taxes | $1,734                      | $1,135                   

|                                      | June 30, 2005 | December 31, 2004
|------------------------------------- | ------------- | -----------------
|
|Current Assets                        | $16,153       | $14,608          
|Total Assets                          | $31,824       | $40,403          
|Current Liabilities                   | $9,371        | $12,645          
|Total Liabilities                     | $12,884       | $16,364          
|Net Assets of Discontinued Operations | $18,940       | $24,039          

Mestek Going
Private

On
January 19, 2005, the Company also announced that John E. Reed further proposed to the
Special Committee that, following the Spin-Off, the Company enter into a going
private transaction. Specifically, it was proposed that the Companys Articles
of Incorporation be amended by shareholder vote, whereby the existing 8,600,103 (now
8,732,125) issued and outstanding shares of Company common stock, together with treasury
shares, as of a record date to be established, be reclassified in a reverse stock
split of 1 share for each 2,000 issued, with provisions in the amendment to the
charter such that fractional shares of those owning less than one share will not be
issued.

---

It
was further proposed that the Special Committee, with the advice of its independent
financial adviser, determine a fair and equitable per share value for a
pre-reverse stock split share of Company common stock, reflecting the value of
the Company following the Spin-Off, which is proposed to occur before the going
private transaction is consummated. This would then form the basis for the full
Board of Directors determination of the per share value to be used to
effect a cash redemption of those shareholders who, by reason of the reverse stock
split become owners of less than one share.

The timing and structure of the going
private transaction generally, in light of the Spin-Off are under review and consideration by the Special
Committee which has been charged with making a recommendation regarding these matters to
the full Board of Directors, which will ultimately make the determination of whether to go
forward and propose the appropriate vote of the shareholders. The Special Committee has
retained Houlihan, Lokey, Howard & Zukin as its independent financial adviser and
Foley Hoag LLP as its independent legal counsel.

The
Board of Directors will be considering this transaction at its September meeting and,
depending upon the action the Board takes, a special meeting of the shareholders may have
to be called for the purpose of considering and voting on any matters requiring a
shareholder vote in connection with the Companys proposed going private
transaction.

There
can be no assurances that the going private transaction will be consummated.
See Note 9, Other Restructuring Charges.

# Note 9  Plant
Shutdowns and Other Restructuring Charges

Plant Shutdowns

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 Milford, OH facility is reflected in the accompanying
Condensed Consolidated Financial Statements under the heading Property Held for Sale.

Late
in 2004, the Companys Metal Forming Segment (Formtek) began to plan a process of
consolidation. Early in 2005, Formtek announced 1) the closing of its FMI facility in So.
Elgin, Illinois, and 2) its reorganization into operating groups  Formtek Metal
Processing (FMP), made up of Lockformer, Iowa Precision, Engel, Iowa
Rebuilders and Formtek Maine, Formtek Metal Forming (FMF) made up of Formtek
Cleveland, Hill Engineering and Axon Electric and Formtek International (FI),
made up of Formtek Beijing and the international sales force.

Page 25

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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). The Company incurred $316,000 and $565,000, in
the three-month periods ended June 30, 2005 and 2004, respectively, and $519,000 and
$855,000 in the six-months ended June 30, 2005 and 2004, respectively, of such exit
and disposal costs which are classified separately in the accompanying financial
statements under the heading Plant Shutdown and Other Restructuring Charges in accordance
with FAS 146.

On
June 17, 2005, the Company acquired an 80,000 square feet manufacturing facility in
Bridgeton, Missouri, for $2,940,000, which will be used to consolidate existing Formtek
Metal Processing business units. The Company expects to dispose of idled facilities as a
part of this consolidation process. On July 19, 2005, the Company refinanced this
transaction as part of a 25-year tax exempt Industrial Development Bond totaling
$4,430,000.

Other Restructuring
Charges

In
the three- and six-month period ended June 30, 2005, the Companys HVAC segment
incurred professional fees and other costs totaling $97,000 and $337,000, respectively, in
connection with the planned spin-off of the Companys Omega Flex, Inc.
subsidiary and subsequent going private transaction planned by the Company, as
more fully described in Note 8. These costs are reflected in the accompanying financial
statements under the heading Plant Shutdown and Other Restructuring Charges.

# Note 10 Shareholders
Equity

During
the six months ended June 30, 2005, the Companys Shareholders Equity was
affected by incentive stock option activity as follows:

|                                                                                                | Paid In Capital
|----------------------------------------------------------------------------------------------- | ---------------
|
|Balance December 31, 2004                                                                       | $15,434,000    
|Credit related to the issuance of common shares from Treasury stock pursuant to the exercise of
|                                                                                               
|Mestek Incentive Stock Options (see below)                                                      | 716,950        
|Stock-based compensation expensed recorded in relation                                         
|To re-priced Incentive Stock Options (see Note 1)                                               | 787,750        
|Balance June 30, 2005                                                                           | $16,938,700    

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|                                                       | # Of Shares | Treasury Shares
|------------------------------------------------------ | ----------- | ---------------
|
|Balance December 31, 2004                              | 1,010,032   | $12,103,000    
|Net common shares issued from Treasury shares         
|Pursuant to exercise of Mestek Incentive Stock Options | (132,022)   | ($810,000)     
|Balance June 30, 2005                                  | 878,010     | $11,293,000    

Holders
of Mestek Incentive Stock Options representing 185,000 common shares exercised their
options in May and June of 2005. Due to the use of a cashless exercise option
provided in the Mestek Stock Option Plan, the Company issued only 132,022 net common
shares from its Treasury shares as a result of the option exercises. The options exercised
represented all outstanding Mestek incentive stock options.

Page 27

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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, the outcome of outstanding litigation, and future developments effecting
environmental matters. 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. We
operate principally within the North American marketplace. However, we do foresee the need
for growth both in sales and production in both Europe and Asia.

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As of June 30, 2005 the
Company employs approximately 2,648 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 2004 and thus far in 2005, 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 this 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, bookings have
increased to date in 2005 resulting in improved second quarter revenues in 2005 for the
Metal Forming Segment relative to the comparable period in 2004.

For
2005, 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 are expected to contribute 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 expected to have a dampening effect on economic growth, which would have an
adverse effect on the Companys operations.

Page 29

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# CRITICAL ACCOUNTING
POLICIES AND USE OF ESTIMATES

The
preparation of financial statements in conformity with generally accepted accounting
principles requires management to make estimates and assumptions that affect the 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
Reserves

As
discussed more fully in Note 6 to the condensed Consolidated Financial Statements,
Mesteks subsidiary, Met-Coil Systems LLC (Met-Coil), maintains reserves to address
the cost of administering a trust for the benefit of persons exposed to releases of
pollutants by Met-Coil and reserves to address the remaining costs of remediation to its
property in Lisle, Illinois. These matters require the Company to monitor estimates, which
are inherently judgmental and subject to change on an ongoing basis, and make changes as
appropriate.

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.

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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 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 5 to
its 2004 Consolidated Financial Statements, the Company has certain investments in
CareCentric, Inc. (CareCentric) which it had 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 Issue 98-13, and,
accordingly, adopted the cost method of accounting for its investments in CareCentric
subsequent to that date. The Company has also concluded that it is not required to
consolidate the financial statements of CareCentric under the requirements of FASB
Interpretation No. 46, Consolidation of Variable Interest Entities (FIN 46).

Page 31

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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.

Page 32

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# Results of Operations

Note: The discussion which follows
relates to Continuing Operations only. Operating results for Omega Flex, Inc. have been
reclassified and presented separately in the accompanying statements under the heading
Discontinued Operations.

# Three months ended June
30, 2005 vs. June 30, 2004

Consolidated
Operations  Continuing Operations

The
Companys Consolidated revenues were up 4.7% from $86,434,000 in the quarter ended
June 30, 2004 to $90,536,000 in quarter ended June 30, 2005, reflecting improved Metal
Forming segment revenues which offset reduced HVAC segment revenues. For the Company as a
whole, Sales, General and Administrative, and Engineering costs, taken together as a
percentage of Total Revenues, were reduced from 22.8% of sales in the three-month period
ended June 30, 2004 to 22.1 % in the three-month period ended June 30, 2005, reflecting
principally the effect of improved revenues.

Core
operating income (a Non-GAAP Financial Measure) for the Company as a whole for
the second quarter of 2005 for the Company as a whole increased 38%, from $2,657,000 in
the second quarter of 2004 to $3,669,000 in the second quarter of 2005, reflecting the
various factors mentioned above.

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 (loss) determined in accordance with GAAP as follows:

|                                              | Three months ended
June 30,
|--------------------------------------------- | ---------------------------
|
|Consolidated                                  |                            
|Core Operating Profits (Loss)                 | $3,669,000                 
|Less Subsidiary Bankruptcy Professional Fees  | 36,000                     
|Less Environmental Litigation and Remediation | ---                        
|Less Plant Shutdown                           | 413,000                    
|Operating Profits (Losses) per GAAP           | $3,220,000                 

Income
Tax Provision (Benefit), as a percentage of pretax income, was 37.9% in the three months
ended June 30, 2005, up slightly from 35.2% in the three months ended June 30, 2004, and
consistent with expected statutory rates.

Page 33

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HVAC
Segment

Total
Revenues in the Companys HVAC Segment decreased 3.0% during the second quarter of
2005 relative to the second quarter of 2004 principally to the shutdown and sale of the
Air Clean Damper business in 2004 and also reduced sales of industrial HVAC products.
During the three months ended June 30, 2005, however, the HVAC Segments gross profit
margins increased from 24.9% to 25.6% reflecting improved margins in various hydronic
products which more than offset reduced margins in certain industrial heating products and
certain cooling products. Improved margins overall reflect to some extent the
segments success in passing on via price increases the effects of inflationary
pressures incurred in 2004 and 2005 which effected copper, steel, cast iron scrap,
aluminum and other commodities used in its products.

Operating
profits for the HVAC segment for the three months ended June 30, 2005 were up 59.7%
relative to the three months ended June 30, 2004 from $1,787,000 to $2,854,000, reflecting
the positive trends described above. The Company continues to focus its efforts on
consolidating overhead wherever possible in order to maximize efficiency in its various
HVAC manufacturing operations.

Metal
Forming Segment

Total
Revenues in the Companys Metal Forming Segment increased by 28.4% during the second
quarter of 2005 relative to the second quarter of 2004 and by 35.7% relative to the first
quarter of 2005. The current backlog at June 30, 2005 is approximately $29.2 million, up
from $28.7 million at March 31, 2005, and down from $33.0 million at June 30, 2004. The
backlog represents about 14 weeks of work and is adequate to meet the Segments
business plan. Bookings for the second quarter of 2005 were approximately $27.9 million,
up 18.2% from the approximately $23.6 million booked in the quarter ended March 30, 2005
but down 5.1% from the approximately $29.4 million booked in the quarter ended June 30,
2004. The second quarter 2005 sales, bookings, and backlog figures are consistent with
improving manufacturing activity in the domestic economy and consistent with a modest upturn in
the sale of durable goods sector, including the machine tool industry in which the Segment
operates.

Gross
profit margins for the Metal Forming Segment improved slightly from 27.3% in the 2004
quarter to 27.7% in the 2005 quarter, reflecting some progress toward improved quoting and
execution on larger orders and better absorption of burden expense.

Reflecting
the Segments higher revenues, core operating results for the segment (a
Non-GAAP Financial Measure discussed below) for the quarter (which exclude
certain environmental litigation and remediation expenses and, subsidiary bankruptcy
professional fees), increased from $351,000 in the 2004 period to $718,000 in the 2005
period.

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.

Page 34

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

|                                              | Three months ended
June 30,
|--------------------------------------------- | ---------------------------
|
|Metal Forming Segment                         |                            
|Core Operating Profits for the Segment        | $718,000                   
|Less Subsidiary Bankruptcy Professional Fees  | 36,000                     
|Less Plant Shutdown Expenses                  | 316,000                    
|Less Environmental Litigation and Remediation | ---                        
|Operating Profits (Loss) per GAAP             | $366,000                   

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 certain assets of Tishken Products Company, and the start-up of the
rebuilding operation, Iowa Rebuilders, an electrical distributor, Axon Electric, and a
Beijing-based assembly facility, Formtek Machinery (Beijing), will allow it to maintain
and expand its core competencies, positioning this Segment very well for the future.

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 and
sub-assemblies on a limited basis, with ultimate plans to sell select machinery in Asian
markets and throughout the world. Formteks wholly foreign owned enterprise, Formtek
Machinery (Beijing) Co., Ltd, was registered in September of 2003 and began assembly
operations of roll forming and metal cutting equipment in a 2,800 square meter facility in
the Changping District of Beijing in the first quarter of 2004 and has continued to expand
its operations as planned.

# Six months ended June
30, 2005 vs. June 30, 2004

Consolidated

The
Companys Consolidated revenues were up 3.8% from $168.9 million in the six-month
period ended June 30, 2004 to $175.4 million in the six-month period ended June 30, 2005,
reflecting increased revenues from both the HVAC segment and the Metal Forming segment.
For the Company as a whole, Sales, General and Administrative, and Engineering costs,
taken together as a percentage of Total Revenues, decreased from 23.8% to 22.9% reflecting
the effect of improved revenues.

Page 35

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Core
Operating income (a Non-GAAP Financial Measure) for the six-month period ended
June 30, 2005 for the Company as a whole, which excludes certain Environmental Litigation
and Remediation charges, Subsidiary Bankruptcy Professional Fees and plant shutdown and
other restructuring expenses, increased from $4,083,000 in the six months ended June 30,
2004 to $5,011,000 in the six months ended June 30, 2005, reflecting the effects of
improved revenue and other ongoing cost control efforts.

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:

|                                              | Six months ended
June 30,
|--------------------------------------------- | -------------------------
|
|Consolidated                                  |                          
|Core Operating Profits                        | $5,011,000               
|Less Subsidiary Bankruptcy Professional Fees  | 437,000                  
|Less Environmental Litigation and Remediation | ---                      
|Less Plant Shutdown                           | 901,000                  
|Operating Profits (Loss) per GAAP             | $3,673,000               

Income
Tax Expense (Benefit), as a percentage of pretax income (loss), increased from 36.8% in
the six-month period ended June 30, 2004 to 40.3% in the six-month period ended June 30,
2005.

HVAC
Segment

Total
Revenues in the Companys HVAC segment increased 3.5% during the six-month period
ended June 30, 2005 relative to the comparable period in 2004 due primarily to improved
sales of hydronic heating products which offset sales lost due to the shutdown and sale of
the Air Clean Damper business in 2004 and reduced sales of certain industrial hearing
equipment and cooling products. The Company continues to focus its efforts on
consolidating overhead wherever possible in order to adapt to maximize efficiency in its
various HVAC manufacturing operations.

Page 36

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Core
Operating profits for the HVAC segment for the six-month period ended June 30, 2005 were
up 44.7% relative to the six-month period ended June 30, 2004 from $3,781,000 to
$5,472,000, reflecting the positive trends described above.

The
HVAC Segments Core Operating profits (a Non-GAAP Financial Measure) are reconciled
with operating profits determined in accordance with GAAP as follows:

|                          | Six months ended
June 30,
|------------------------- | -------------------------
|
|HVAC Segment              |                          
|Core Operating Profits    | $5,472,000               
|Plant Shutdown            | ---                      
|Other Restructuring       | 337,000                  
|Operating Profit per GAAP | $5,135,000               

Metal
Forming Segment

Total
Revenues in the Companys Metal Forming segment were up approximately 5.0% for the
six-month period ended June 30, 2005, relative to the comparable six-month period ended
June 30, 2004 at $47.6 million

Core
Operating Profits (Losses) (a Non-GAAP Financial Measure) for the segment for
the six-month period ended June 30, 2005, were reduced from $328,000 during the six months
ended June 30, 2004 to ($461,000) in the six months ended June 30, 2005, due principally
to the failure in the first quarter of 2005 to ship all orders scheduled, as discussed in
more detail in the Companys Form 10-Q for the period ended March 31, 2005 and lower
gross margins due to delays in obtaining price increases in most products to offset
increases in metals prices and increases in other component costs of cost of sales. In
addition, the Segment increased spending in training and global marketing and maintained
spending in new product development and promotion.

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:

|                                              | Six months ended
June 30,
|--------------------------------------------- | -------------------------
|
|Metal Forming Segment                         |                          
|Core Operating Profits (Loss) for the Segment | ($  461,000)             
|Less Subsidiary Bankruptcy Professional Fees  | 437,000                  
|Less Plant Shutdown Expenses                  | 564,000                  
|Less Environmental Litigation and Remediation | ---                      
|Operating (Losses) per GAAP                   | ($1,462,000)             

# LIQUIDITY AND CAPITAL
RESOURCES

The
Companys total debt (long-term debt plus current portion of long-term debt)
increased in the six months ended June 30, 2005 from $24,381,000 at December 31, 2004 to
$36,110,000 at June 30, 2005, reflecting principally the effect of seasonally increased
investment in accounts receivable and inventory and the acquisition of a manufacturing
facility in Bridgeton, Missouri on June 17, 2005 for $2,940,000, as explained more fully
in Note 9 to the Condensed Consolidated Financial Statements. The above figures exclude
indebtedness related to Omega Flex, Inc. which is classified separately in the
accompanying financial statements in accordance with FAS 144 (see Note 8 related to
Discontinued Operations).

The
Company has not paid dividends on its common stock since 1979.

The Companys
debt (short-term debt plus long-term debt) to equity ratio was approximately 29.5% as of
June 30, 2005. The Company believes its liquidity position at June 30, 2005 is adequate to
meet foreseeable future needs. As more fully explained in Note 6 to the Companys
2004 Consolidated Financial Statements, on October 19, 2004, the Company entered into a
multi-bank, $70 million three-year committed, unsecured revolving loan and letter of
credit agreement. As more fully explained in Note 8 to the condensed consolidated
financial statements, the Company spun-off its Omega Flex, Inc. subsidiary
effective July 29, 2005 and plans subsequently, to Go Private which will
require additional borrowings and will result in the Company being more leveraged than at
present.

# Commitments,
Contingencies and Warranties

The
Company is obligated under Indemnity Agreements (Indemnity Agreements)
executed on behalf of 23 of the Companys Officers and Directors. Under the terms of
the Indemnity Agreements, the Company is contingently liable for costs which may be
incurred by the Officers and Directors in connection with claims arising by reason of
these individuals roles as Officers and Directors.

The
Company is obligated under the Indemnity and Guaranty Agreement with Airtherm Products,
Inc. (Airtherm) to indemnify Airtherm against certain claims arising out of
the acquisition of Airtherm in August 2001, including potential claims involving alleged
violations of the Worker Adjustment and Retraining Notification Act (WARN
Act). Certain former employees of Airtherm have filed suit alleging such WARN Act
claims, and defense of the matter was tendered by Airtherm to the Company pursuant to the
above indemnity agreement. The U.S. District Court in Arkansas subsequently awarded
summary judgment to plaintiffs, and assessed liability of approximately $520,000, plus
interest and attorneys fees. The Company has appealed the summary judgment verdict
on behalf of Airtherm to the Eighth Circuit Court of Appeals. The matter is being briefed
and will be scheduled for oral argument later this year. The Company expects that the
trial court judgment will be overturned as being inconsistent with the statute and prior
judicial decisions.

The
Company is contingently liable under standby letters of credit totaling approximately
$25,555,000 issued principally in connection with its commercial insurance coverages and
in connection with the funding of the Met-Coil TCE PI Trust discussed below.

Page 38

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The
Company retains significant obligations under its commercial general liability insurance
policies for product liability and other losses. For losses occurring in the policy years
ending October 1, 2004 and October 1, 2005, the Company maintains commercial general
liability insurance, retaining liability for the first $2,000,000 per occurrence of
commercial general liability claims (including products liability claims), subject to an
agreed aggregate. For losses occurring in the policy year ended October 31, 2003, the
Company retained liability for the first $500,000 per occurrence of commercial general
liability claims (including product liability), subject to an agreed aggregate. In
addition, the Company retained liability for the first $250,000 per occurrence of workers
compensation coverage, subject to an agreed aggregate.

The
Company is obligated as a guarantor with respect to certain potential debt obligations of
CareCentric, Inc. (formerly Simione Central Holdings, Inc.) to CareCentrics primary
commercial bank, Wainwright Bank & Trust Company, in the amount of $4 million. The $4
million Wainwright credit line is secured by substantially all of CareCentrics
assets and the Companys guarantee expires coincident with the credit line on August
31, 2005. The actual balance outstanding under CareCentrics credit line with
Wainwright Bank & Trust Company as of June 30, 2005 was $400,000. Under the Equity
Method of Accounting, in December 2001, the Company accrued this guarantee (originally in
the amount of $6 million and now reduced to $4 million) as a reserve for Equity Investment
Losses. John E. Reed, the Companys Chairman and Chief Executive Officer, is a
shareholder and director of Wainwright Bank & Trust Company.

The
Company is subject to several legal actions and proceedings in which various monetary
claims are asserted. 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.

Berry, et al. v. Titeflex Corp., et
al.  Case No. CV-2004-211,
Circuit Court of Clark County, Arkansas, filed November 15, 2004.Defendant: Omega
Flex, Inc., a Pennsylvania Corporation

Page 39

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Four
individual residents of Arkansas and an individual Texas resident have sued the top four
manufacturers of corrugated stainless steel tubing (CSST), including the
Companys former subsidiary Omega Flex, Inc. (Omega), the manufacturer of
TracPipe®-brand CSST which was spun-off to the Companys shareholders, pro rata,
by stock distribution on July 29, 2005. The complainant proposes a national class action
on behalf of all owners of installed CSST. Installed CSST is alleged to be defective
because it is alleged to be more susceptible to failure from near-lightning strikes than
traditional black iron pipe and because the manufacturers allegedly failed to warn of
CSSTs allegedly heightened susceptibility. The Company is not a named defendant and
does not expect to have any liability under this action as the matter remains with Omega
which was spun-off by the Company on July 29, 2005, in a transaction unrelated to this
litigation more fully described in Note 8.

Omega
has filed motions to dismiss the amended complaint and the cross-complaint of the
individual Arkansas plumber defendant, who likewise proposed a class action cross-claim on
behalf of installers of CSST. Full discovery is proceeding and disposition of the class
certification issue is expected in 2006. Omega will oppose both class certification and
any request for a national class. The Company believes Omega has valid defenses to the
issues of both class certification and product liability and Omega will contest these
claims vigorously. At this time the Company believes that no estimation of Omegas
potential liability in the matter can be reasonably made. It is the nature of class action
litigation in general, and, accordingly, this matter in particular, that if there should
be an adverse decision on the issue of certification of a national class of CSST owners
and an adverse decision on the issue of product liability, the financial position and
results of operation of Omega could be materially adversely affected.

# Subsidiary 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, now Met-Coil
Systems, LLC (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.

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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, including the
class action captioned Mejdrech, et al. v. The Lockformer Company, et al. and all other
personal injury and indemnification actions brought against the Company relating to the
alleged release of TCE.

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.
Pursuant to the Amended Plan, the Company and Met-Coil are committed to fund up to $26
million (on a present value basis) to the TCE PI trust over time and based on actual
claims paid. 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. As of June 30, 2005,
approximately 540 exposure only claims have been approved by the TCE Trust in
an aggregate amount of $1,411,146.00 and for the year to date June 30, 2005, two Personal
Injury claims have been paid in the aggregate amount of $15,000.

The
Companys Environmental and Litigation Reserve related to this matter as of the year
ended December 31, 2004 was approximately $24.7 million. The reserve as of the quarter
ended June 30, 2005 was approximately $21.4 million. The reduction in the reserve includes
approximately $522,000 for remediation related expenditures and $639,000 in payments to
claimants under the TCE PI Trust during the three months ended June 30, 2005. Based on
recent estimates of ongoing remediation costs, and reflecting reductions in the reserve
for expenditures incurred in the quarter ending June 30, 2005, the remediation portion of
the reserve as of June 30, 2005 is $ 5,913,000, which amount is included in the $ 21.4
million reserve discussed above. The reserve balance at June 30, 2005 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 at this time. 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. See Remediation
 Lisle, IL section below.

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# Remediation  Lisle,
IL:

Met-Coil
has completed the hook-up of all but a few specified residences to public water supply,
has received confirmation from the USEPA of the completion of soil remediation and
decommissioning of the SRH system under the Work Plan for the site, and is continuing with
the remediation of the Lockformer facility in Lisle, IL, pursuant to a Work Plan for the
site (on-site remediation) while awaiting approval from the IEPA of the ground
water remedial standards to be achieved by such Work Plan, as well as the methodology for
groundwater remediation. The Company has guaranteed to the IEPA up to $3 million of
remediation costs incurred by either Met-Coil or, if Met-Coil fails to perform the
remediation, the IEPA.

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.

The
Companys Environmental Litigation and Remediation Reserve is comprised of the
following:

|                                                       | June 30,2005 | December 31,2004
|------------------------------------------------------ | ------------ | ----------------
|
|Estimated Future Remediation costs                     | $  5,913     | $  7,018        
|The Illinois Actions, The Honeywell Claims,           
|The Attorney General Action                           
|and all matters related to pending                    
|future personal Injury claims in the Lockformer area   | ---          | 1,500           
|Potential Future Obligations to the TCE PI Trust       | 15,532       | 16,171          
|Total Environmental Litigation and Remediation Reserve | $21,445      | $24,689         

Based
on claim experience through June 30, 2005 the Company has reclassified $20,445,000 of the
above reserve to non-current as of December 31, 2004 and has classified $19,445,000 of the
reserve as non-current as of June 30, 2005.

# Other Claims Alleging
Releases of Hazardous Materials or Asbestos Related Liability

The
Company is currently a party to over 100 asbestos-related lawsuits, and in the past
three-months has been named in approximately 20 new such lawsuits each month, primarily in
Texas where numerous asbestos-related actions have been filed against numerous defendants.
The lawsuits previously pending against the Company in Illinois have all been resolved by
plaintiffs dismissals without payment.

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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 approximately 300 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.

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.

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Following
is a summary of changes in the Companys product warranty liability for the three-
and six-month period ended June 30, 2005 and 2004.

|                                                     | Three-months ended
June 30, | Six-months ended
June 30,
|---------------------------------------------------- | --------------------------- | -------------------------
|
|
|Balance at beginning of period(dollars in thousands) | $3,882                      | $2,635                   
|Provision for warranty claims                        | 555                         | 1,049                    
|Warranty claims incurred                             | (509)                       | (422)                    
|Balance at end of period                             | $3,928                      | $3,262                   

# FUTURE IMPACT OF KNOWN
TRENDS OR UNCERTAINTIES

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 2004 and 2005 to date have sustained relatively strong
sales of residential and commercial HVAC products. Significant increases in interest rates
or reductions in construction activity in future periods, however, can 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 based upon
factory utilization. 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 affected in recessionary
periods. The level of manufacturing activity in North America in the automotive, steel
processing, metal furniture, 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.
Activity in this Segment may be affected significantly in the future by the effects of
globalization which impact both the markets for its products, the competitors it faces in
such markets; and potentially the cost and availability of its key components.

Credit
Availability Although interest rates trended lower in the beginning of 2004,
short-term interest rates began to increase in the last two quarters of 2004 and in 2005
to date. Credit availability continues to be critical to the Companys customers and
suppliers. As the Companys customer base includes many small to medium size
businesses a contraction in credit availability could significantly impact the
Companys operations.

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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 affect the Companys
results of operations and/or financial position in the future.

Environmental
Laws Affecting Operations and Product Design The Company is subject to numerous laws
and regulations that govern the discharge and disposal of materials into the environment.
The Companys operations and its HVAC products that involve combustion,
refrigeration, air conditioning and related technologies as currently designed and applied
entail the risk of future noncompliance with the evolving landscape of environmental laws
regulations and industry standards. The cost of complying with the various environmental
laws, regulations and industry standards 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, or
efficiency standards, will not over the long-term and in the future have a material
adverse affect on the Companys results of operations. In addition, a growing trend
of governmental units and business entities to mandate or favor compliance with
environmentally-based rating systems in the construction of buildings (such as
LEED standards) may change the nature of HVAC products accepted in the
marketplace and may have a materially adverse affect 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 extreme cold. Severe climatic changes, such as those suggested by the
global warming phenomenon, could over time adversely affect the Companys
results of operation and financial position.

Purchasing
PracticesIt has been the Companys policy in recent years for high value
commodities to aggregate purchase volumes with fewer vendors 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 and Commodity Risks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. In connection with the
purchase of major commodities, principally copper, stainless steel 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 commodities are conducted in the cash or spot 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
or spot market transactions are executed at the Companys discretion and
at the 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. Management believes at
present that it has adequate sources of supply for its raw materials and components
(subject to the risks described above under Purchasing Practices) and has historically not
had significant difficulty in obtaining the raw materials, component parts or finished
goods from its suppliers. 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.

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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 effect on the Companys financial statements taken as a whole. Interest
rates are nonetheless significant to the Company as a participant in the construction and
capital goods industries. (See Construction Activity, Manufacturing Activity and Credit
Availability above.)

Acquisition
and Consolidation/Integration The Company has historically grown through
acquisition. Acquisitions often involve risks of integration with the parent company or
consolidation between and among operating units or functional departments and may present
managerial and operational challenges, which can have adverse effects on results of
operations, typically when charges result from impairment of goodwill or indefinite lived
intangibles or cessation of business operations from consolidations or otherwise.
Acquisition integration also often requires considerable diversion of management
attention, difficulty in integrating management resource planning and financial control
systems, increased risk of contingent or unknown liabilities and potential disputes with
sellers of the acquired companies. Expected cost savings from strategic acquisitions may
not be realized or achieved within the timeframe initially expected.

Retention
of Qualified Personnel The Company does not operate with multiple levels of
management. It is relatively flat organizationally and while we perceive this
as a strength overall, it does subject the Company to the risks associated with the
separation from the Company of critical managers for whatever reason. From time to time,
there may be a shortage of skilled labor, which may make it more difficult and expensive
for the Company to attract and retain qualified employees.

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

The
Company does not engage in the purchase or trading of market risk sensitive instruments
other than with respect to a single interest rate swap transaction entered into on
February 6, 2004 whereby the Company has obtained fixed interest rate protection for three
years for approximately $14,000,000 of its bank debt. The Company does not presently have
any positions with respect to hedge transactions such as forward contracts relating to
currency fluctuations. No market risk sensitive instruments are held for speculative or
trading purposes.

# Item 4  Controls
and Procedures

| | (a)              Evaluation
of Disclosure Controls and Procedures.
| | ------------------------------------------------------------------

| | At
the end of the fiscal second quarter of 2005, the Company evaluated the effectiveness of
the design and operation of its disclosure controls and procedures. The Companys
disclosure controls and procedures are designed to ensure that the Company records,
processes, summarizes and reports in a timely manner the information the 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, as of the date of their evaluation, 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.
| | ----------------------------------------------

| | There
was no change in the Companys internal control over financial reporting
(as defined in rule 13a-15(f) of the Securities Exchange Act of 1934) identified in
connection with the evaluation required by Rule 13a-15(d) of the Securities Exchange Act
of 1934 that occurred during the three-month period covered by this Report on Form 10-Q
that has materially affected or is reasonable likely to materially affect the
Companys internal control over financial reporting subsequent to the date the chief
executive officer and chief financial officer completed their evaluation.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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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 Note 6 to 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 June 30, 2005, nor
is the Company aware of any governmental agency investigations or proceedings other than
as discussed in Note 6 of the Companys Condensed Consolidated Financial Statements,
which are a part of this Quarterly Report on Form 10-Q

# Item 4  Submission of Matters to a Vote of Security Holders

The
Company held its Annual Meeting of Shareholders on May 24, 2005. Certain matters voted
upon at the meeting and the votes cast with respect to such matter are as follows:

Election of Directors

|                      | Votes
Received | Votes
Withheld
|--------------------- | -------------- | --------------
|
|William J. Coad       | 7,658,974      | 11,713        
|Winston R. Hindle, Jr | 7,659,710      | 10,977        
|David W. Hunter       | 7,658,975      | 11,712        
|David M. Kelly        | 7,593,326      | 77,361        
|George F. King        | 7,659,710      | 10,977        
|John E. Reed          | 7,633,675      | 37,012        
|Stewart B. Reed       | 7,636,397      | 34,290        
|Edward J. Trainor     | 7,659,710      | 10,977        

Ratification of
Appointment by the Audit Committee of the Auditors, Vitale, Caturano & Company, Ltd.

| | Votes For | Votes Against | Abstain
| | --------- | ------------- | -------
|
| | 7,665,246 | 506           | 4,935  

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# Item 6  Exhibits and Reportson Form 8-K

|Exhibit
No. | Description                                                                                
|----------- | -------------------------------------------------------------------------------------------
|
|11.1        | Statement re Computation of Per Share Earnings.                                            
|31.1        | Certification of Chief Executive Officer of Mestek, Inc. pursuant to Rule 15d-14(a)        
|            | promulgated under the Securities Exchange Act of 1934, as amended                          
|31.2        | Certification of Chief Financial Officer of Mestek, Inc. pursuant to 15d-14(a) promulgated 
|            | under the Securities Exchange Act of 1934, as amended                                      
|32.1        | Certification of Chief Executive 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 April 1, 2005 regarding Results of Operations and
Financial Condition to report earnings for the quarter and year ended December 31, 2004.

The
Company filed a Report on Form 8-K on April 29, 2005 regarding the filing of a preliminary
information statement on Schedule 14C regarding the Spin-off of the Companys
majority-owned subsidiary, Omega Flex, Inc.

The
Company filed a Report on Form 8-K on May 18, 2005 regarding Results of Operations and
Financial Condition to report earnings for the quarter ended March 31, 2005.

The
Company filed a Report on Form 8-K on May 24, 2005 regarding the establishment of the
record date of the spin-off by the Companys 86% ownership interest in Omega Flex,
Inc.

The
Company filed a Report on Form 8-K on June 15, 2005 regarding a letter to the shareholders
of the Company informing them of the record date for the spin-off by the Company of its
86% ownership interest in Omega Flex, Inc.

The
Company filed a Report on Form 8-K on June 23, 2005 regarding the filing of a second
preliminary information statement on Schedule 14C regarding the spin-off by the Company of
its 86% ownership interest in Omega Flex, Inc.

The
Company filed a Report on Form 8-K on July 28, 2005 regarding the mailing of its
shareholders of record as June 23, 2005 a definitive Information Statement on Schedule 14C
regarding the spin-off by the Company of its 86% ownership interest in Omega Flex, Inc.

---

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.

# MESTEK, INC.

(Registrant)

|                      |                                  
|--------------------- | ---------------------------------
|Date: August 15, 2005 | By: /S/ Stephen M. Shea          
|                      | Stephen M. Shea                  
|                      | Senior Vice President - Finance  
|                      | and CFO (Chief Financial Officer)