UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                    Form 10-K
                  Annual Report Pursuant to Section 13 or 15(d)
                     of the Securities Exchange Act of 1934

For the fiscal year ended                         Commission file number: 1-448
December 31, 1998

                                  MESTEK, INC.

             (Exact name of registrant as specified in its charter)

    Pennsylvania                                                25-0661650
(State or other jurisdiction of                             (I. R. S Employer
incorporation or organization                               Identification No.)

                              260 North Elm Street
                         Westfield, Massachusetts 01085
                    (Address of principal executive offices)

Registrant's telephone number, including area code: 413-568-9571

Securities registered pursuant to Section 12(b) of the Act:

                                                          Name of each exchange
Title of each class                                         on which registered
Common Stock, no par value                              New York Stock Exchange


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months, and (2) has been subject to such filing requirements
for the past 90 days.          YES     X                      NO__


Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. /X/


The aggregate market value of voting common shares held by non-affiliated of the
registrant  as of  March  15,  1999,  based  upon  the  closing  price  for  the
registrant's common stock as reported in The Wall Street Journal as of such date
was $56,045,907.

The number of shares of the registrant's  common stock issued and outstanding as
of March 15, 1999 was 8,878,105.


                       DOCUMENTS INCORPORATED BY REFERENCE

Portions of the proxy  statement  relating to the annual meeting of shareholders
of the registrant to be held on May 18, 1999 are  incorporated by reference into
Part III hereof and the exhibits to filings referenced on Pages 44 through 47 of
Part IV hereof are incorporated by reference into Part IV hereof.




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                                     PART I


Item 1 - BUSINESS


GENERAL

Mestek, Inc. ("Mestek" or the "Company") was incorporated in the Commonwealth of
Pennsylvania in 1898 as Mesta Machine Company. It changed its name to Mestek,
Inc. in October, 1984, and merged with Reed National Corp. on July 31, 1986.

On February  2, 1996,  the Company  acquired  all of the issued and  outstanding
common  stock of Omega Flex,  Inc. of Exton,  Pennsylvania  (Omega).  Omega is a
manufacturer of flexible metal hose and related hose fabrications.  The purchase
price paid for the  acquired  stock was  $9,119,000.  Liabilities  assumed  were
$833,000.  The Company has  accounted  for this  acquisition  under the purchase
method of accounting.  Omega has leased its  manufacturing and office facilities
through December 31, 2001, for $268,000 per year.

On February 5, 1996,  the Company  acquired  certain assets of the press feeding
and cut-tolength line businesses of Rowe Machinery & Automation, Inc. of Dallas,
Texas (Rowe). Rowe is a leading  manufacturer of press feeding and cut-to-length
line equipment  serving the appliance,  office furniture,  automotive,  and many
other  markets.  The purchase price paid was  $5,495,000,  including the assumed
liabilities of $1,900,000.  The Company has accounted for this acquisition under
the  purchase  method of  accounting.  The Company  leased the Rowe  facility in
Dallas,  including machinery and equipment,  on a short-term basis through April
of 1997.

On August 30, 1996,  the Company  acquired  substantially  all of the  operating
assets of Dahlstrom  Industries,  Inc.  (Dahlstrom) of Schiller Park,  Illinois.
Dahlstrom is a leading  manufacturer  of  roll-forming  equipment  for the metal
fabrication  industry.  The purchase price paid was $4,288,000 including assumed
liabilities of $2,606,000.  The Company has accounted for this acquisition under
the purchase method of accounting.

On January 31, 1997, the Company acquired  ninety-one and one hundredths percent
(91.01%) of the issued and outstanding  common stock of Hill  Engineering,  Inc.
(Hill)  of Villa  Park,  Illinois  and  Danville,  Kentucky.  Hill is a  leading
producer  of  precision  tools  and  dies  for  the  gasket   manufacturing  and
roll-forming  industries and other specialty equipment.  The purchase price paid
for the  acquired  stock was  $5,141,000.  The  Company has  accounted  for this
acquisition under the purchase method of accounting.

On November  3, 1997 the Company  acquired  one  hundred  percent  (100%) of the
issued and outstanding common stock of CoilMate, Inc. (Coilmate) of Southington,
Connecticut.  Coilmate is the leading producer of pallet decoiling equipment for
the metal  stamping and roll  forming  industries.  The purchase  price paid was
$3,521,000.  The Company has accounted for this  acquisition  under the purchase
method of accounting.

On April 29, 1998,  the  Company,  through a Canadian  subsidiary,  acquired 100
percent of the outstanding common stock of Ruscio Brothers Refractory Ltd. (RBR)
and 988721 Ontario, Inc. (988721), both of Mississauga, Ontario, Canada. RBR and
988721  manufacture  and  distribute  commercial and  residential  copper-finned
boilers and water  heaters  under the name Ruscio  Brothers  Industries,  (RBI),
primarily in Canada.  Copper-finned  boilers and water heaters are complimentary
to the Company's other hydronic  products and the Company now distributes  RBI's
products in the United  States.  The purchase  price paid for the acquired stock
was  approximately  $2,877,000  (U.S.) and  included  goodwill of  approximately
$1,807,000 (U.S.)

On November 2, 1998,  the  Company  exchanged  its  forty-six  and eight  tenths
percent (46.8%) interest in Eafco,  Inc. for ninety-three and six tenths percent
(93.6%) of the common stock of Boyertown



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Foundry Company (BFC) of Boyertown,  PA. BFC received one hundred percent (100%)
of the foundry and  machining  operations of Eafco on that same date pursuant to
"a split-up" of Eafco structured for tax purposes as a tax-free  reorganization.
The Company has  accounted  for this  transaction  under the purchase  method of
accounting.  Accordingly,  the carrying value of the Company's equity investment
in Eafco,  $8,778,000 at November 2, 1998, was treated as the purchase price for
accounting  purposes.  The assets acquired by BFC included  substantially all of
the real  estate  and  equipment  owned by  Eafco in  Boyertown  and used in the
foundry,  machining and boiler assembly  operations and certain other assets and
liabilities. BFC will operate principally as a cast-iron foundry, supplying cast
iron  sections and related  machining  services to both the  Company's  Westcast
subsidiary and to various third parties, including Peerless Heater Company, Inc.
In connection with this  transaction the Company loaned Eafco,  Inc.  $1,500,000
and  also  assumed  and  paid   $650,000  of  Eafco's  then   outstanding   bank
indebtedness. The $1,500,000 loan bears interest at BankBoston's prime rate less
one,  is payable  over 42 months  beginning  on May 1,  2000,  and is secured by
substantially  all of  Eafco's  assets.  BFC has also  leased a  portion  of its
facilities  in  Boyertown  to Eafco,  Inc.  which will  continue to assemble and
warehouse boilers in Boyertown for Peerless Heater Company, Inc.

         The  Company's  executive  offices are located at 260 North Elm Street,
Westfield, Massachusetts 01085. The Company's phone number is 413-568-9571.


OPERATIONS OF THE COMPANY

         The Company  operates in four continuing  business  segments:  Heating,
Ventilating,  and Air Conditioning  Equipment ("HVAC")  manufacturing;  Computer
Software Development and Systems Design; Metal Products; and Metal Forming. Each
of these segments is described below.

         The Company's  former Metal  Products  Segment has been  subdivided for
1998  reporting  purposes into the Metal Forming  Segment and the Metal Products
Segment.

         The Company and its subsidiaries together employed  approximately 2,800
persons as of December 31, 1998.


HEATING, VENTILATING AND AIR CONDITIONING EQUIPMENT

         The  Company,  through  Mestek,  Inc.  and various of its wholly  owned
subsidiaries,  (collectively,  the "Reed Division") manufactures and distributes
products in the HVAC industry.  These products include  residential,  commercial
and  industrial  hydronic  heat  distribution  products,  gas-fired  heating and
ventilating equipment,  louver and damper equipment,  commercial and residential
gas and oil-fired boilers,  air conditioning units, and related products used in
heating, ventilating and air conditioning systems.

The Reed Division sells finned-tube and baseboard  radiation equipment under the
names "Sterling", "Vulcan", "Heatrim", "Petite-7",  "Hydrotherm", and "Suntemp",
and other hydronic heat  distribution  products  under the names  "Sterling" and
"Beacon-Morris".  The  division  sells  gas-fired  unit  heaters  under the name
"Sterling",  radiant  heating  under the name  "Cox" and  gas-fired  indoor  and
outdoor  heating and  ventilating  equipment  under the names "Alton",  "Applied
Air", "Wing", "Air Fan", and "Temprite".  Cooling and air conditioning equipment
is sold under the "Alton", "Applied Air", "Space Pak", "Aztec", "Koldwave", "Air
Fan",  and "Nesbitt"  names,  and gas and oil-fired  boilers are sold  primarily
under  the names  "RBI",  "Hydrotherm",  "Multi-Pulse",  and  "Multi-Temp",  and
distributed under the name "Smith Cast Iron Boilers" by Westcast,  Inc. A number
of these trade names are also registered trademarks owned by the Company and its
subsidiaries.  These  products  may be  used  to  heat,  ventilate  and/or  cool
structures  ranging in size from large office buildings,  industrial  buildings,
warehouses,  stores and residences, down to such small spaces as add-on rooms in
residences.  The division's  products are  manufactured  at plants in Westfield,
Massachusetts;  South Windsor,  Connecticut;  Farmville, North Carolina; Dallas,
Texas; Mississauga,  Ontario, Canada; Dundalk, Maryland; and Wrens, Georgia. The
Company closed its



<PAGE>



Skokie,  Illinois and  Ridgeville,  Indiana  plants in 1996 and relocated  these
operations to Dundalk, Maryland and Farmville, North Carolina, respectively.

The Reed Division sells its many types of fire,  smoke,  and air control louvers
and  dampers,  which are  devices  designed to  facilitate  the  ventilation  of
buildings  or to control or seal off the movement of air through  building  duct
work in the event of fire or smoke,  under the names  "Air  Balance",  "Phillips
Aire", "Pacific Air Balance",  "American Warming and Ventilating",  and "Arrow".
These products are manufactured at the Company's plants in Wrens,  Georgia;  Los
Angeles, California;  Bradner, Ohio; Waldron, Michigan;  Springfield,  Ohio, and
Wyalusing,  Pennsylvania.  The Reed Division also  manufactures  industrial  and
power plant  dampers in Los  Angeles,  California  under the name  "Pacific  Air
Products".

Through its design and application  engineering groups, the Reed Division custom
designs and  manufactures  many HVAC products to meet unique  customer  needs or
specifications not met by existing products. Such custom designs often represent
improvements  on existing  technology and often are  incorporated  into the Reed
Division's standard line of products.

The Reed division sells its HVAC products  primarily through  approximately 2300
independent  representatives  throughout  the United States and Canada,  many of
whom sell several of Reed's products. These independent  representatives usually
handle various HVAC products made by manufacturers other than the Company. These
representatives  usually are granted an  exclusive  right to solicit  orders for
specific  Reed  Division  products  from  customers  in  a  specific  geographic
territory.  Because of the diversity of the Reed Division's product lines, there
is often more than one representative in a given territory. Representatives work
closely with the Reed Division's  sales managers and its technical  personnel to
meet customers' needs and  specifications.  The independent  representatives are
compensated on a commission basis and generally they neither stock Reed Division
products nor purchase such products for resale.

The Reed  Division,  directly,  or through its  representatives,  sells its HVAC
products primarily to contractors, installers, and end users in the construction
industry, wholesale distributors and original equipment manufacturers.

While the Reed Division's  HVAC products are  distributed  throughout the United
States and  Canada,  sales in the  northeast,  mid-Atlantic  and upper  mid-west
states are somewhat  higher than would be suggested by  unadjusted  construction
statistics in any given year due to the relative popularity of hydronic products
in these areas.

The sale of heating and cooling  products is  inherently  sensitive  to climatic
trends in that relatively warm winters and/or cool summers can adversely  effect
sales volumes.

The Reed Division sells gas-fired and hydronic heating and ventilating products,
boilers and other HVAC  equipment in Canada and also sells its products in other
foreign markets from time to time. Total export sales did not exceed ten percent
of total revenues, nor did foreign assets exceed ten percent of total assets, in
any of the most recent five years ending December 31, 1998.

The Reed  Division  uses a wide variety of materials in the  manufacture  of its
products,  such as  copper,  aluminum  and  steel,  as well  as  electrical  and
mechanical components,  controls, motors and other products. Management believes
that it has adequate  sources of supply for its raw materials and components and
has not had  significant  difficulty in obtaining the raw  materials,  component
parts or finished goods from it 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.

The businesses of the HVAC segment are highly competitive.  The Company believes
that  it  is  the  largest   manufacturer  of  hydronic  baseboard  heating  for
residential   and   commercial   purposes  and  is  one  of  the  three  leading
manufacturers of gas-fired  heaters and fire and smoke dampers.  The Company has
established  a substantial  market  position in the  cast-iron  boiler  business
through its  acquisitions in 1991, 1992, and 1998.  Nevertheless,  in all of the
industries in which it competes, the Company has



<PAGE>



competitors  with  substantially  greater  manufacturing,  sales,  research  and
financial  resources than the Company.  Competition in these industries is based
mainly on merchandising capability,  service, quality, price and ability to meet
customer  specifications.  The Reed  Division  believes that it has achieved and
maintained its position as a substantial competitor in the HVAC industry largely
through the strength of its extensive  distribution  network,  the breadth of it
product line and its ability to meet customer delivery and service requirements.
Most  of its  competitors  offer  their  products  in  some  but  not all of the
industries served by the Reed Division.

The  quarterly  results of the HVAC  segment are  affected  by the  construction
industry's demand for heating equipment,  which generally peaks in the last four
months of each year  (the  "heating  season").  Accordingly,  sales are  usually
higher  during the heating  season,  and such higher levels of sales may in some
years  continue into the following  calendar year. As a result of these seasonal
factors, the Company's  inventories of finished goods reach higher levels during
the heating season and are generally lower during the balance of the year.

Management  does not believe that backlog  figures  relating to the HVAC segment
are  material to an  understanding  of its business  because  most  equipment is
shipped promptly after the receipt of orders.

The Company  owns a number of United  States and foreign  patents.  Although the
Company usually seeks to obtain patents where appropriate,  it does not consider
any  segment  materially  dependent  upon any single  patent or group of related
patents.

The  Reed  Division  has a  number  of  trademarks  important  to its  business,
including those relating to its Sterling, Vulcan, Beacon-Morris,  Heatrim, Wing,
Alton,  Applied Air, Arrow,  Aztec Sensible  Cooling,  Hydrotherm,  Temprite and
Dynaforce product lines.

Expenditures  for research and development  for the HVAC segment in 1998,  1997,
and  1996  were  $1,415,000,   $941,000,  and  $814,000  respectively.   Product
development efforts are necessary and ongoing in all product markets.

The Company  believes that  compliance with  environmental  laws will not have a
financially material effect on its operations in 1999.


COMPUTER SOFTWARE DEVELOPMENT AND SYSTEM DESIGN

The business of Mestek's wholly owned subsidiary, MCS, Inc. ("MCS") is primarily
related to the sales and service of business  applications software for the home
health services information systems  marketplace.  Services to customers include
preparation  of  computer  programs  and  software to meet the  customer  needs,
providing  computer  hardware  when  required,  installing  the  system  at  the
customer's business, and providing continuing support services.

The most significant systems which MCS has available are MestaMed, a third-party
billing,  general ledger,  accounting and inventory control system for providers
of durable medical equipment, home health care, infusion therapy, rehabilitation
programs,  and hospice services,  and ProfitWorks,  a system utilized by lumber,
electrical,  plumbing, and manufacturer's representatives to manage order entry,
inventory,  purchasing,  accounts  receivable,  and reporting.  Support includes
software enhancements, diagnostic access, and training seminars. MestaMed is the
only supplier of an integrated  solution for providers of home health  services.
MestaMed is available on a variety of hardware  platforms and operating  systems
including UNIX and various Intel based platforms.

MCS's   products  were   developed  in  what  are  today  regarded  as  "legacy"
environments.  Nevertheless,  by the continual  application  and  utilization of
tools developed by others,  MCS has been able to sustain and improve the utility
of its products and offer such  products on a variety of hardware and  operating
systems platforms,  including Windows NT.  Developments in progress at this time
include a  graphical  user  interface  (GUI)  for  applicable  modules  and open
database  compliant (ODBC) features.  At the same time, the Company continues to
look at developing or acquiring new products based upon



<PAGE>



third  generation  tools and  modern  software  languages.  The  Company is also
studying the use of such tools,  as well as Web-based  tools,  to accomplish the
migration of its current offerings to modern operating systems environments.

New  enhancements to its software  products are  continually  being developed by
MCS. Notable developments in 1998 were (1) the introduction of a "point-of-care"
enhancement  to MCS's Home Health Care software and (2) the  introduction  of an
enhanced  inventory  system for MestaMed.  During 1998, 1997, and 1996 MCS spent
approximately $1,992,000, $1,575,000, and $1,338,000, respectively, for software
development. These costs related primarily to customer-sponsored development and
improvements to existing products.

Because of the importance of systems  development to MCS,  programming and sales
personnel  are a primary  resource.  MCS's  main  office  is in the  Pittsburgh,
Pennsylvania area and it has sales offices in other parts of the country.

The delivery of home health care services is increasingly  dominated by hospital
based   "integrated   delivery   systems"  (IDS).  MCS  has  not  established  a
relationship  at this time with a supplier  of  information  systems to hospital
based delivery systems.  It has,  however,  recently entered into agreement with
the Volunteer Hospital  Association  whereby its products will be recommended to
the  Association's  members as a  recommended  solution  for their  home  health
services information systems needs.

The markets for  business  applications  software  and systems  development  are
intensely competitive and subject to rapid technological change. For this reason
MCS faces risks and enjoys  opportunities,  which are somewhat  more  pronounced
than in the Company's other operating segments.  MCS has many competitors in the
markets in which it operates  both on a regional  and  national  basis.  Foreign
sales are not significant. On December 31, 1998, MCS's backlog was approximately
$1,619,000.

MCS's inventory  consists  primarily of computer hardware and related equipment,
which is sold together with  applications  software as a turnkey  solution.  MCS
attempts to maintain a sixty-day  supply so that  delivery of completed  systems
can be made on a timely basis.


METAL FORMING

The Company's Metal Forming Segment designs, manufactures and sells a variety of
metal   handling   and   metal   forming    products   under   names   such   as
Cooper-Weymouth-Peterson,  Dahlstrom, Hill Engineering,  CoilMate-Dickerman, and
Rowe (collectively  Formtek).  The products are sold through independent dealers
in most  cases  to  end-users  and in some  cases to  other  original  equipment
manufacturers.  The products include roll formers,  roll forming  systems,  wing
benders,  presses,  servofeeds,  straighteners,  cradles,  reels,  cut-to-length
lines,  specialty dies, tube cut-off systems,  hydraulic  punching  blanking and
cutoff systems, rotary punching, and flying cut-off saws.

In 1997 this  Segment  added two  additional  units:  Hill  Engineering,  Inc. a
leading  producer of precision tools and dies for the gasket  manufacturing  and
roll  forming  industries,  and  CoilMate,  Inc.,  a leading  producer of pallet
decoiling  equipment  for the metal  stamping and roll forming  industries.  The
CoilMate  product has been combined with a former CWP Division,  Dickerman,  and
this "low-end" line is now marketed as CoilMate-Dickerman.

The Company  believes it has improved its competitive  position within the metal
forming  marketplace  by  developing  servo-driven  feeders with  microprocessor
controls,  and other software  controls,  affording  diagnostic and  operational
features,  as well as by the strategic  acquisitions made in 1996 and 1997 which
broadened the segment's overall product offerings.

Certain  products made by these units are custom  designed and  manufactured  to
meet unique  customer  needs or  specifications  not  currently  met by existing
products. These products, developed by



<PAGE>



the  Company's  design  and  application  engineering  groups,  often  represent
improvements  on existing  technology and are often then  incorporated  into the
unit's standard product line.

The  primary  customers  for such  metal-handling  and  metal-forming  equipment
include contract metal stampers,  manufacturers  of large and small  appliances,
commercial and residential  lighting fixtures,  automobile  accessories,  office
furniture and equipment, metal construction and HVAC products.

The businesses of Formtek are highly  competitive  and, due to the nature of the
products,  are  significantly  more  cyclical  (due to changes in  manufacturing
capacity  utilization) than the Company's other operating  segments.  CWP, Rowe,
and CoilMate-Dickerman have become substantial forces in the manufacture of coil
handling equipment through their broad and competitive  product lines,  together
with  Formtek's  customer  driven  application  engineering  and ability to meet
customer   delivery  and  service   requirements   through  separate   extensive
distribution  networks. The Company expects that these strengths will be further
leveraged by the large installed customer bases of its recent acquisitions.

The Metal Forming Segment sells  equipment in Canada and other foreign  markets.
Total  export sales did not exceed ten percent  (10%) of the total  revenues nor
did foreign  assets  exceed ten percent (10%) of total assets in any of the most
recent five years ending December 31,1998.

The backlog  relating to this  segment at  December  31, 1998 was  approximately
$10,958,000. Expenditures for research and development for this segment in 1998,
1997, and 1996 were $465,000, $298,000, and $53,000, respectively.

METAL PRODUCTS

The  Company's  Metal  Products  Segment   (consisting  of  National   Northeast
Corporation,  OmegaFlex,  Inc. and Boyertown  Foundry  Company)  manufactures  a
variety of metal products including extruded aluminum heat sinks, flexible metal
hose and grey iron  castings.  This segment sells cast iron products to the HVAC
industry,  including the company's HVAC segment, flexible metal hose products to
the HVAC and industrial metal hose marketplaces,  extruded aluminum products for
thermal  management,  (heat sinks),  to the electronics  marketplaces,  extruded
aluminum  products  to the  architectural  products  marketplace,  and  extruded
aluminum products to the Company's HVAC segment.

National  Northeast  Corporation  (National)  extrudes  aluminum  shapes for the
construction  and other  markets and  extrudes  and  fabricates  aluminum  based
products and assemblies and high precision aluminum heat sinks (heat dissipation
devices) for use in a wide variety of power control,  communications and related
electronic and computer systems  applications.  Its products are made through an
extrusion process supported by a broad line of secondary machining, stamping and
assembly  capabilities.   National's  application  engineering  and  fabrication
capabilities  have helped it become a  substantial  competitor  in the heat sink
market place.

OmegaFlex,  Inc. (Omega)  manufactures  corrugated flexible stainless steel hose
for use in a wide  variety of  industrial  applications.  Its  products  include
annular,  helical  and  braided  metal hose and hose  fabrications  and are sold
primarily  through  industrial  hose  distributors.  In January  of 1997,  Omega
introduced Trac-PipeTM, a corrugated stainless steel tubing developed for use in
piping gas  appliances.  The  Company  has  realized  significant  synergies  by
distributing Trac-PipeTM through its extensive HVAC distribution network.

Boyertown Foundry Company (BFC) operates a cast-iron  foundry in Boyertown,  PA,
which manufactures products used principally in the HVAC industry.

The Metals  Products  Segment  sells  products  in Canada  and in other  foreign
markets.  Total  export  sales,  however,  did not exceed  ten  percent of total
revenues,  nor did foreign  assets  exceed ten percent of total assets in any of
the most recent five years ending December 31, 1998.

The backlog  relating to this  segment at  December  31, 1998 was  approximately
$3,764,000.




<PAGE>



Expenditures  for research and  development  for this  segment,  independent  of
research and development  related to specific customer requests,  in 1998, 1997,
and 1996 were $256,000, $389,000, and $151,000 respectively.


SEGMENT INFORMATION

Selected  financial  information  regarding the  operations of each of the above
segments, consistent with statement of Financial Accounting Standard No. 131 and
Section 101 (d) of Regulations  5-K, is presented in Note 12 to the Consolidated
Financial Statements.

Item 2 - PROPERTIES

The HVAC  segment  of the  Company  manufactures  equipment  at plants  that the
Company  owns in Waldron,  Michigan;  Bradner,  Ohio;  Wyalusing,  Pennsylvania;
Dundalk,  Maryland,  Springfield,  Ohio; Wrens,  Georgia, and Dallas,  Texas. It
operates  plants that it leases from  entities  owned  directly or indirectly by
certain  officers  and  directors  of the Company in  Westfield,  Massachusetts;
Farmville,   North  Carolina;  South  Windsor,   Connecticut  and  Los  Angeles,
California.  The Reed Division leases manufacturing space from unrelated parties
in Mississauga,  Ontario, Canada; as well as a regional distribution facility in
Mississauga, Ontario, Canada.

The Metal Forming segment manufactures products at plants the Company
owns in Clinton, Maine, Villa Park, Illinois, Schiller Park, Illinois, and
Danville, Kentucky.

The Metal Products segment  manufactures  products at plants the Company owns in
Pelham,  New  Hampshire,  Boyertown,  Pennsylvania  and at leased  facilities in
Lawrence, Massachusetts, Winter Haven, Florida, and Exton, Pennsylvania.

During 1998 the Company acquired  additional office and  manufacturing  space in
Dallas,  Texas  and,  as more  fully  described  in  Note 2 to the  Consolidated
Financial Statements, acquired substantially all of the manufacturing and office
facilities of EAFCO, Inc. in Boyertown, Pennsylvania.

The  Company's   Computer   System's   segment  (MCS)  leases  office  space  in
Monroeville,  Pennsylvania,  which  houses its  principal  offices and  computer
facility used in the computer  software  development and system design business.
MCS has also recently  leased office space in Pleasanton,  California.  MCS owns
the computer equipment used in its operations

The Company's principal executive offices in Westfield, Massachusetts
are leased from an entity owned by an officer and director of the Company. The
Company also owns an office building in Holland, Ohio.

In  addition,  the Company and certain of its  subsidiaries  lease other  office
space in various cities around the country for use as sales offices.

Certain of the owned  facilities  are pledged as security for certain  long-term
debt  instruments.  See  Property  and  Equipment,  Note 4 to  the  Consolidated
Financial Statements.

Item 3 - LEGAL PROCEEDINGS

The Company is not presently involved in any litigation,  which it believes will
materially  and  adversely   affect  its  financial   condition  or  results  of
operations.


Item 4 - SUBMISSION OF MATTER TO A VOTE OF THE SECURITY HOLDERS

No matters  were  submitted  to the  security  holders of the Company for a vote
during the fourth quarter of 1998.




<PAGE>



                                     PART II


Item 5 - MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS

The Company's  common stock is listed on the New York Stock Exchange,  under the
symbol MCC. The number of  shareholders  of record as of March 15, 1999 based on
inquiries  of the  registrant's  transfer  agent  was  1337.  For this  purpose,
shareholders  whose  shares are held by  brokers on behalf of such  shareholders
(shares held in "street name") are not separately counted. The price range
 of the Company's  common stock  between  January 1, 1999 and March 15, 1999 was
between $21 3/8 and 18 3/4, and the closing price on March 15, 1999 was $18 3/4.

The quarterly price ranges of the Company's common stock during 1998 and 1997 as
reported in the consolidated transaction reporting system were as follows:

                                   PRICE RANGE

                                1998                                1997
                                ----                                ----

First Quarter           $22 3/8     $18 1/4                $18 1/8     $16 1/8
Second Quarter          $22 3/4     $18 9/16               $20 7/8     $16 1/4
Third Quarter           $22         $18                    $21 3/8     $17 3/4
Fourth Quarter          $20 3/4     $17 1/2                $19 3/8     $17 3/8

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

No securities  issued by the Company,  other than common stock,  are listed on a
stock exchange or are publicly traded.

Item 6 - SELECTED FINANCIAL DATA

Selected  financial  data for the Company for each of the last five fiscal years
is  shown  in the  following  table.  Selected  financial  data  reflecting  the
operations  of  acquired  businesses  is shown only for  periods  following  the
related acquisition.

SUMMARY OF FINANCIAL POSITION as of December 31,
(dollars in thousands except per share data)

                           1998        1997       1996         1995        1994
                           ----        ----       ----         ----        ----

Total Assets            $ 205,143  $ 191,117   $ 170,010    $ 141,431  $ 120,430
Working capital            49,415     42,056      59,274       41,626     36,628
Long-term debt, including
  current portion          13,188     19,329      15,362        3,031      5,548
Shareholders' equity      133,298    118,007     103,718       91,046     80,732
Shareholders' equity
per common share (1)    $  14.99   $  13.22     $ 11.61     $  10.14   $   8.93
                        =========  =========    ========    =========  =========














<PAGE>



SUMMARY  OF  OPERATIONS  - for the year  ended  December  31,  (2)  (dollars  in
         thousands except per share data)

                         1998         1997       1996         1995        1994
                         ----         ----       ----         ----        ----

Total revenues         $338,344    $327,778    $299,527     $245,865    $224,018
Net income               16,064      14,405      13,329       10,906       9,298
Earnings per common share:
Net Income
  Basic                 $ 1.80      $ 1.61      $ 1.49        $ 1.21      $ 1.02
  Diluted               $ 1.80      $ 1.61      $ 1.49        $ 1.21      $ 1.02

1)Equity  per common  share  amounts are  computed  using the common  shares and
common share equivalents  outstanding as of December 31, 1998, 1997, 1996, 1995,
and 1994.

(2)Includes  the results of acquired  companies or asset  acquisitions  from the
date of such acquisition, as follows:

* Boyertown Foundry Company from November 2, 1998
* Ruscio Brothers Industries, (RBI), from April 29, 1998
* CoilMate, Inc., from November 3, 1997
* Hill Engineering, Inc., from January 31, 1997
* Dahlstrom Industries, Inc. from August 30, 1996.
* Rowe Machinery & Automation,Inc., from February 5, 1996.
* Omega Flex, Inc., from February 2, 1996.
* National Northeast Corporation and National Southeast Corporation
     from October 30, 1995.
* Heat Exchangers, Inc., from November 15, 1995.
* Aztec Sensible Cooling, Inc., from November 1, 1994.





<PAGE>



           Item 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                      CONDITION AND RESULTS OF OPERATIONS



                           FORWARD LOOKING INFORMATION

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,  the broad economic effect of
the Year 2000 problem,  customer preferences,  general economic conditions,  and
increased  competition.  All of these are  difficult  to  predict,  and many are
beyond the ability of the Company to control.

Certain statements in this Annual Report on Form 10-K 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",  "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 Annual
Report on Form 10-K.  The Company  undertakes no obligation to publicly  release
the result of any  revisions to these  forward-looking  statements  which may be
made to reflect events or  circumstance  after the date hereof or to reflect the
occurrence of unanticipated events, conditions or circumstances.



                     RETURN ON AVERAGE NET ASSETS EMPLOYED


                                1998, 1997, 1996

The  Company's  Return on Average  Net  Assets  Employed,  defined as  operating
profits  before  bonuses,  over Average Net Assets  Employed  (total assets less
current  liabilities other than current portion of long-term debt, averaged over
12 months) for the years 1998, 1997, and 1996 was as follows:

                                             1998          1997         1996
                                             ----          ----         ----

Operating Profits (as defined)           $31,497,000   $30,525,000   $25,925,000
Average Net Assets Employed (as defined $147,170,000  $130,419,000  $113,594,000
------------- ------------- -------------
Return on Average Net Assets Employed       21.4%           23.4%       22.8%
                                        ============  ===========   ============


The 1998 return on Average Net Assets  Employed  decreased  slightly  from 1997,
despite  improvements  from the  Company's  Metal  Forming  and  Metal  Products
segments,  due to reduced operating incomes from the Company's HVAC and Computer
Software Segments.





<PAGE>


                            ANALYSIS: 1998 VS. 1997

The Company's core HVAC Segment reported  comparative  results for 1998 and 1997
as follows:

                                    1998        1998           1997        1997
                                   ------       -----          ------      -----
                                   ($000)         %            ($000)        %
                                   ------       -----          ------      -----

Net Sales                        $229,704     100.00%        $229,423    100.00%
Gross Profit                       65,485      28.51%          66,178     28.85%
Operating Income                   15,668       6.82%          17,846      7.78%

The Company's decision in 1998 to close its Temprite  Manufacturing  location in
Orangeville,  Ontario,  Canada, together with the effect of certain transitional
costs associated with the Company's  recent HVAC  acquisitions and certain other
product  re-alignment costs,  combined to produce flat HVAC revenues in 1998 and
reduced operating  profits.  The Company's  Computer Systems Segment (MCS, Inc.)
reported  reduced sales,  margins and operating  profits in 1998 as indicated in
the following table:

                                   1998           1998       1997         1997
                                  ($000)           %        ($000)          %
                                  ------          -----     ------        -----

Net Sales                        $16,630       100.00%     $17,029       100.00%
Gross Profit                       6,578        39.56%       7,238         42.5%
Operating Income                   2,335        14.04%       3,289        19.31%

Reimbursement  restrictions imposed upon Medicare providers (MCS's customers) in
1998 by the Balanced Budget  Amendment  adversely  affected the home health care
information  systems marketplace and resulted in reduced revenues for MCS. Also,
costs incurred by MCS relative to its efforts to address Year 2000 functionality
in its  products,  and other  product  development  initiatives,  impacted  this
segment's operating costs adversely in 1998.

MCS's   products  were   developed  in  what  are  today  regarded  as  "legacy"
environments.  Nevertheless,  by the continual  application  and  utilization of
tools developed by others,  MCS has been able to sustain and improve the utility
of its products and offer such products on a variety of hardware,  and operating
systems platforms,  including Windows NT.  Developments in progress at this time
include a  graphical  user  interface  (GUI)  for  applicable  modules  and open
database  compliant (ODBC) features.  At the same time the Company  continues to
look at developing or acquiring new products based upon third  generation  tools
and modern  software  languages.  The Company is also  studying  the use of such
tools,  as well as Web-based  tools,  to accomplish the migration of its current
offerings to modern operating systems environments.

For 1998 reporting purposes the Company's former Metal Products Segment has been
subdivided into a Metal Forming Segment and a Metal products segment.

The Company's Metal Products Segment includes  National  Northeast  Corporation,
(National),  an aluminum  extruder  and heat sink  fabricator  acquired in 1995,
Omega Flex, Inc. (Omega),  an industrial metal hose fabricator acquired in 1996,
and Boyertown  Foundry  Company,  (BFC), a  ninety-three  and six tenths percent
(93.6%) owned subsidiary which acquired the foundry and machining  operations of
Eafco, Inc. on November 2, 1998. Prior to that date, the Company's forty-six and
eight tenths percent (46.8%) investment in Eafco was accounted for on the equity
method and was not included in this segment.  Results of operations  for BFC for
the period November 2, 1998 through December 31, 1998, exclusive of intersegment
sales,  are included in the this segments' 1998 results.  BFC produces cast iron
products  and related  machining  services  for the  Company's  HVAC Segment and
various third parties. Comparative results for 1998 and 1997 were as follows:

1998 1998 1997 1997
($000) % ($000) %
------ - ------ -
Net Sales                          $50,745     100.00%       $42,797     100.00%
Gross Profit                        14,222      28.03%        10,407      24.35%
Operating Income                     5,194      10.24%         2,723       6.36%




<PAGE>



The growth in operating  profits in 1998 is traceable to significantly  improved
results  from both  National  and  Omega.  National  continued  to  execute  its
aggressive  expansion  plan in 1998,  moving  its  fabricating  operations  from
Lawrence,  MA to its new  facility in Pelham,  NH, and  continued  to expand its
presence  in  the  thermal  management  (heat  sink)  marketplace.  Omega,  with
significant  1997 product  development and market  development  costs behind it,
successfully  executed  its  plan in 1998 to  greatly  expand  sales  of its new
"Trac-pipe(TM)" flexible gas piping product, a corrugated stainless steel tubing
developed especially for use in the piping and installation of gas appliances.

The Company's Metal Forming Segment includes  Copper-Weymouth,  Peterson, (CWP),
Rowe  Machinery  and  Automation  Inc.,   (Rowe),  a  leading   manufacturer  of
press-feeding  and  cut-to-length   equipment,   acquired  in  1996,   Dahlstrom
Industries,  (Dahlstrom),  a leading  manufacturer  of roll  forming  equipment,
acquired in 1996, Hill Engineering, (Hill), a leading producer of tools and dies
for the gasket manufacturing and roll forming industries acquired on January 31,
1997, and CoilMate,  Inc.,  (Coilmate),  a leading  producer of pallet decoiling
equipment  for the  metal  stamping  and roll  forming  industries  acquired  on
November 3, 1997. Comparative results for 1998 and 1997 were as follows:

                                 1998         1998          1997           1997
                                ------        ----          ------         ----
                                ($000)          %           ($000)           %
                                ------        ----          ------         ----

Net Sales                      $41,265       100.00%      $38,529        100.00%
Gross Profit                    12,212        29.59%       10,626         27.00%
Operating Income                 4,170        10.11%        1,537          3.99%

The  relocation of the Rowe  manufacturing  operation to the  Company's  Formtek
facility in Clinton, Maine imposed significant direct and indirect costs on this
segment in 1997.  With these costs  behind it, this  segment was able to exploit
the synergies  expected from this consolidation and as a result operating income
for 1998 was up  considerably  on  modestly  increased  revenues.  The  Coilmate
operations were moved from  Southington,  Connecticut to Clinton,  Maine, in the
fourth quarter to achieve further operating synergies.

As a whole the Company reported comparative results as follows:

                                  1998         1998            1997       1997
                                  ------       ----            ------     ----
                                  ($000)         %             ($000)       %
                                  ------       ----            ------     ----

Net Sale                       $338,334      100.00%        $327,778     100.00%
Gross Profit                     98,136       29.00%          94,449      28.81%
Operating Income                 27,367        8.09%          25,395       7.75%

Gross Profit and Operating Income percentage  margins were relatively  unchanged
overall.

Sales  Expense for the Company as a whole,  as a percentage  of total  revenues,
increased  slightly,  from twelve and forty-nine  hundredths percent (12.49%) to
twelve  and  seventy  hundredths  percent  (12.70%),  owing to  relatively  flat
revenues in the Company's HVAC segment.  General and Administrative Expenses, as
a percentage of revenues,  decreased  from six and thirteen  hundredths  percent
(6.13%) to five and sixty-two  hundredths percent (5.62%),  principally due to a
decrease in the provision for bonuses.  Engineering  Expense, as a percentage of
total revenues,  increased  slightly from two and forty-five  hundredths percent
(2.45%) to two and sixty hundredths percent (2.60%).  Interest Expense decreased
slightly in 1998, tracking the net reduction in interest bearing indebtedness.

Income Tax Expense  for 1998,  as a  percentage  of pretax  income,  was reduced
slightly from  thirty-eight  and two tenths percent (38.2%) to thirty-seven  and
four tenths percent (37.4%).

<PAGE>
ANALYSIS: 1997 VS. 1996

The Company's core HVAC Segment reported  comparative  results for 1997 and 1996
as follows:



                                 1997          1997          1996          1996
                                ------         ----          ------        ----
                                ($000)           %          ($000)          %
                                ------         ----          ------        ----

Net Sales                     $229,423       100.00%      $228,115       100.00%
Gross Profit                    66,178        28.85%        62,164        27.25%
Operating Income                17,846         7.78%        16,142         7.08%

Revenues in this Segment were relatively flat in 1997 as increases in certain of
the Company's  historical hydronic and gas-fired heating products were offset by
reductions  in  certain  industrial  and air  conditioning  products  which were
traceable to a variety of factors, including the relatively mild summer of 1997.
Gross profit margins were improved  overall in 1997 as product  relocation costs
were reduced and raw material costs remained well  controlled.  Operating income
as a percentage  of net sales was up slightly,  reflecting  the  improvement  in
gross profit margins.

The Company's Metal Products Segment includes  National  Northeast  Corporation,
(National),  an aluminum  extruder  and heat sink  fabricator  acquired in 1995,
Omega Flex, Inc., (Omega), an industrial metal hose fabricator acquired in 1996.
Comparative results for 1997 and 1996 were as follows:

1997 1997 1996 1996
---- ---- ---- ----
($000) % ($000) %
------ - ------ -

Net Sales                     $42,797       100.00%         $31,052      100.00%
Gross Profit                   10,407        24.35%           6,439       20.74%
Operating Income                2,723         6.36%           2,261        7.28%

Gross Profit and Operating  Income for this segment were  adversely  effected in
1997 by  significant  new  product  development  and  market  development  costs
undertaken  by Omega in  connection  with its  introduction  of  Trac-PipeTM,  a
corrugated stainless steel tubing developed especially for use in the piping and
installation of gas appliances,  and also by certain transitional costs incurred
by National related to its planned relocation to Pelham, NH.

The Company's Computer Systems Segment (MCS, Inc.) reported improved revenues,
gross profits and operating profits in 1997 as indicated in the following table:

                                    1997       1997            1996       1996
                                   ------      ----           ------      ----
                                   ($000)         %           ($000)        %
                                   ------      ----           ------      ----

Net Sales                         $17,029    100.00%         $16,114     100.00%
Gross Profit                        7,238     42.50%           6,865      42.60%
Operating Income                    3,289     19.31%           3,063      19.01%

MCS continued its commitment in 1997 to product enhancement and customer support
in the  Durable  Medical  Equipment,  Home  Infusion  Therapy,  and Home  Health
Services marketplaces.


The Company's Metal Forming Segment includes  Cooper-Weymouth,  Peterson, (CWP),
Rowe  Machinery  and  Automation  Inc.,   (Rowe),  a  leading   manufacturer  of
press-feeding  and  cut-to-length   equipment,   acquired  in  1996,   Dahlstrom
Industries,  (Dahlstrom),  a leading  manufacturer  of roll  forming  equipment,
acquired in 1996, Hill Engineering, (Hill), a leading producer of tools and dies
for the gasket manufacturing and roll forming industries acquired on January 31,
1997, and CoilMate,  Inc.,  (Coilmate),  a leading  producer of pallet decoiling
equipment  for the  metal  stamping  and roll  forming  industries  acquired  on
November 3, 1997.

<PAGE>

Comparative results, which, obviously, were affected by these acquisitions, were
as follows:

                                  1997       1997             1996         1996
                                 ------      ----            ------        ----
                                 ($000)       %              ($000)          %
                                 ------      ----            ------        ----

Net Sales                      $38,529     100.00%          $24,246      100.00%
Gross Profit                    10,626      27.00%            6,760       27.88%
Operating Income                 1,537       3.99%            1,426        5.88%

The  relocation of the Rowe  manufacturing  operation to the  Company's  Formtek
facility in Clinton, ME, which was completed in 1997, imposed significant direct
and indirect  costs on this  segment in 1997 and  overshadowed  otherwise  solid
contributions from Cooper-Weymouth,  Peterson, and Hill Engineering. Significant
synergies are expected to be derived from this relocation in future years.


As a whole the Company reported comparative results as follows:

                                 1997        1997             1996       1996
                                ------       ----            ------      ----
                                ($000)         %             ($000)        %
                                ------       ----            ------      ----

Net Sales                     $327,778     100.00%         $299,527     100.00%
Gross Profit                    94,449      28.81%           82,228      27.45%
Operating Income                25,395       7.75%           22,892       7.64%

Gross Profit and Operating  Income  percentage  margins were  slightly  improved
reflecting the effects described above.

Sales  Expense for the Company as a whole,  as a percentage  of total  revenues,
increased from eleven and eighty-five  hundredths percent (11.85%) to twelve and
forty-eight   hundredths   percent  (12.48%)  (Sales  Expense  and  General  and
Administrative  Expense  for 1996,  as reported  in the  accompanying  financial
statements, have been adjusted to reflect certain reclassifications for purposes
of  comparability).  General and  Administrative  Expenses,  as a percentage  of
revenues,  increased from five and forty-one  hundredths percent (5.41%) in 1996
to six and thirteen  hundredths  percent (6.13%) in 1997,  principally due to an
increase in the provision for bonuses.  Engineering  Expense, as a percentage of
total revenues,  decreased  slightly from two and fifty-five  hundredths percent
(2.55%) to two and forty-four  hundredths percent (2.44%).  Interest Expense was
relatively  unchanged  in 1997,  despite  the various  acquisitions,  due to the
offsetting effect of positive cash flows from operations.

Income Tax Expense  for 1997,  as a  percentage  of pretax  income,  was reduced
slightly  from  thirty-nine  and  thirty-nine  hundredths  percent  (39.39%)  to
thirty-eight and sixteen hundredths percent (38.16%).

Pretax  income for 1996 included  gains from the sale of unneeded  manufacturing
facilities totaling $1,444,000; there were no comparable transactions in 1997.


ANALYSIS: LIQUIDITY AND CAPITAL STRUCTURE


While working capital increased in 1998, from $42,056,000,  at December 31, 1997
to $49,415,000 at December 31, 1998, this reflects  principally the reduction in
Current  Portion of  Long-Term  Debt,  which  occurred in 1998.  Total  interest
bearing indebtedness was reduced in 1998 by $6,141,000, reflecting the effect of
positive cash flows after all acquisitions and other capital spending.

The Company's  funded debt to equity ratio (including  deferred  liabilities and
minority interests in funded debt) remained under three percent (3%) at December
31,  1998,  despite  the effect of the  Company's  1998  acquisitions  and other
capital spending,  reflecting the effect of positive cash flows on the Company's
total debt position.



<PAGE>

The principal  changes to the Company's Net Assets  Employed during 1998 were as
follows:

Net Assets Employed 12/31/97                                       $139,549,000
Acquisition of Ruscio Brothers Industries, Inc.                       2,877,000
Added Investment in Boyertown Foundry Company                         2,250,000
Capital spending in excess of depreciation                            5,328,000
All other                                                               (77,000)
--------
Net Assets Employed 12/31/98                                       $149,927,000
=============

Management   regards  the  Company's   current  capital  structure  and  banking
relationships  as fully adequate to meet  foreseeable  future needs. The Company
has not paid dividends on its common stock since 1979.

ACCOUNTING PRONOUNCEMENTS


The  Financial  Accounting  Standards  Board has issued  Statement  of Financial
Accounting  Standard No. 130,  which was  effective  for fiscal years  beginning
after December 15, 1997.  FAS 130 requires the  presentation  of  "comprehensive
income," a more broadly defined  measure of income,  in addition to conventional
"net income.  The Company  adopted FAS 130  effective  with 1998.  The Company's
"comprehensive  income" was not  materially  different  from its "net income" as
explained in Note 1 to the Consolidated Financial Statements.

The  Financial  Accounting  Standards  Board has issued  Statement  of Financial
Accounting  Standard No. 131,  which was  effective  for fiscal years  beginning
after December 15, 1997. FAS 131 requires,  in general, a "management  approach"
rather than an "industry approach" to the disclosure of segment information. The
Company adopted FAS 131 in 1998 and expanded its segmental reporting accordingly
as reflected in Note 12 to the Consolidated Financial Statements.


YEAR 2000 DISCLOSURE

The following  information is being provided as a Year 2000 Readiness Disclosure
Statement,  and is subject to the  provisions of the Year 2000  Information  and
Readiness Disclosure Act.

The Company's risks related to the Year 2000 problem fall into four categories:

1. Information Technology Systems

The Company's  principal  business  applications  software  packages and related
hardware and operating system environments, and the status of the Company's Year
2000 compliance efforts related thereto are as follows:

HVAC Segment:

The HVAC Segment maintains order entry,  billing and manufacturing  systems at a
number of locations.  The Segment's  needs in this area,  while specific to each
individual division,  have sufficient common ground that commercially  available
software packages,  suitably customized,  have been used in the past rather than
custom  written  code. As a result,  the Company  decided in 1996 to address the
Year 2000  problem in this area by  upgrading  its  various  manufacturing/order
processing/inventory  control/accounts receivable software systems to "Year 2000
Compliant" versions, while at the same time adding enhanced functionality.

The Company  began a search at that time for a system which would meet the needs
of as many of its divisions as possible.  Friedman  Associates,  a manufacturing
package with strong  "configure to order"  capabilities  was chosen in 1997. The
majority  of  the  Segment's   business  is  processed  through  its  Westfield,
Massachusetts,  and  Holland,  Ohio,  locations  which  are  in the  process  of
implementing the Friedman Associates system in IBM



<PAGE>



AS400  environments.  The  implementation  process  began  in 1997  and is being
managed on a division  by division  basis.  It is  expected  that all  divisions
scheduled to  implement  the Friedman  system will have  completed  this task by
October 31, 1999. As of March 23, 1999,  approximately  fifty percent 50% of the
HVAC  divisions,  as measured in 1998  revenues,  have  migrated to the Friedman
system or are  otherwise  operating  in  environments  believed  to be Year 2000
compliant.  The Company  believes based upon  inquiries of the relevant  vendors
that the IBM AS400  (model 500)  operating  system and the  Friedman  Associates
software are fully Year 2000  compliant.  The Company  also  utilizes at certain
locations a  manufacturing  and order  processing  software  known as MSS/Costar
which also operates on the IBM AS400 platform.  The Company has recently paid to
make the necessary  programming  changes to make MSS/Costar Year 2000 compliant.
The Company also utilizes at one location a manufacturing  and order  processing
software known as Profit Key which, based upon  representations from its seller,
is also  Year 2000  compliant.  The  Company  is  presently  in the  process  of
arranging for formal tests to validate its vendors' claims - both as to software
and as to operating systems relative to Year 2000 compliance.

The HVAC Segment performs most of its financial reporting on a centralized basis
in Westfield,  MA using general ledger,  payroll,  payables, and human resources
software packages from Infinium,  Inc. which,  based upon  representations  from
Infinium, to the best of the Company's knowledge,  are Year 2000 compliant.  The
Infinium  Software  runs in an IBM AS400 mini computer  environment.  Based upon
representations  from IBM,  the  Company  believes  the AS400  operating  system
environment  which it is using for its financial  software  systems is Year 2000
compliant.  Certain of the Company's  subsidiaries  maintain separate  financial
reporting  functions  using  a  variety  of  personal  computer  based  software
solutions.  Visual and Syspro,  the principal software packages in use at remote
locations  for   financial   accounting   purposes  are  believed,   based  upon
representations  from these vendors, to be Year 2000 compliant at this time. The
Company is presently in the process of arranging for formal  testing to validate
the  representations  received  in this regard from its  hardware  and  software
vendors.

Metal Products Segment:

The Metal  Products  Segment has  successfully  phased in  business  application
systems  believed to be Year 2000 compliant at this time based upon inquiries of
the  relevant  vendors.   National  Northeast  Corporation   implemented  Visual
Manufacturing  on a personal  computer  network running the Windows NT operating
system on January 1, 1999.  Omega Flex,  Inc.  implemented  Syspro  Systems on a
personal  computer network running the Windows NT operating system on January 1,
1998.  Boyertown Foundry Company  implemented  Peachtree  Software on a personal
computer  network  running the Windows NT operating  system on November 1, 1998.
The business  applications running in these environments include general ledger,
payables, payroll, human resources,  order-entry and manufacturing.  The Company
is  presently  in the  process of  arranging  for formal  test to  validate  its
vendors' claims - both as to software and as to operating  systems - relative to
Year 2000 compliance.

Metal Forming Segment:

The  Clinton,  Maine  location  of  the  (Cooper-Weymouth,  Peterson,  Rowe  and
CoilMate/Dickerman)  Metal  Forming  Segment is in the  process of  implementing
Symix  Software  for  its  order  entry,  billing,  manufacturing,   scheduling,
inventory control and related needs. The system was loaded recently and operator
training is  underway.  Pilot  programs  will begin in April.  We expect the new
system (less scheduling  enhancements) to be operational  September 1, 1999. The
Metal Forming  Segment has developed a contingency  plan to be used in the event
its  transition  to Symix is not complete as of December 31, 1999 which  entails
fixing the Year 2000 problem in its



<PAGE>



present  MSS/Costar order entry and  manufacturing  environment.  The vendor has
represented  that it has a cure and that  the  cure can be  implemented  without
disruption  prior  to July 1,  1999.  While  the  cost and  effort  required  to
implement the Symix system is significant, the Company expects that the benefits
to its business process in addition to resolving Year 2000  functionality - will
be substantial as many enhanced functionalities are expected particularly in the
scheduling and advance planning areas. The Company believes that its contingency
plan for this segment is a realistic  alternative  which would allow the segment
to  function  as it does  now  after  December  31,  1999  while it  focuses  on
completing the Symix  implementation.  There can be no assurance,  however, that
the Company's  implementation of the Symix system - or its implementation of its
contingency plan - will be accomplished successfully prior to December 31, 1999.

The Dahlstrom  division shut down its non compliant systems in 1998 and in early
1999 completed development of a Year 2000 compliant  Windows-based inventory and
costing  system  which is  adequate  to  current  needs.  Dahlstrom  intends  to
implement the Symix system within two (2) years.

The Hill  Engineering  unit  utilizes the Elite system by Informix.  Because our
current  version of the  software,  although  Year 2000  compliant,  will not be
supported  by the vendor  after June 1999,  we will  upgrade  our  software to a
better-supported  version  in the  second  quarter.  Costs  are  expected  to be
approximately  $20,000.  Based  upon  the  representations  of  the  vendor  and
implementation  of our current  plan, we expect Hill's system to be compliant in
the third quarter of 1999.

Engineering (CAD/CAM) systems:

The  Company  uses  a  variety  of   commercially   available   engineering  and
manufacturing design tools including AutoCAD,  Pro E and Intergraph.  Based upon
inquiries  of the  vendors  of these  systems,  the  Company  believes  that the
versions  in use  at its  various  locations  are or  will  be  soon  Year  2000
compliant. The Company is presently arranging for formal testing to validate the
representations made by vendors in this regard.

2. Suppliers and Customers Year 2000 problems.

Both the Company's customer base and its supplier base are large and diverse. As
a result,  the Company does not believe it has a reliable  method of  accurately
assessing the magnitude of the risk it faces relating to either its customers or
its suppliers.  The possibility that one or more key suppliers may be unable for
some period to fulfill their obligations to the Company as a result of Year 2000
related  problems  cannot be  discounted.  In such an event, a disruption of the
Company's  business,  which could be financially  material,  is quite  possible;
although most materials are readily  available from other vendors (although lead
times may vary or be  unpredictable  or  inadequate).  The  Company's  core HVAC
segment has conducted a survey of its principal and mission  critical  suppliers
relative to Year 2000  compliance  which  covered  eighty  percent  (80%) of the
annual  spending done by this segment.  Results overall were mixed in that while
responses were generally encouraging they were also in many cases legalistic and
as a result difficult to interpret in terms of genuine readiness.  The Company's
Metal  Forming  Segment  and  Metal  Products  Segment  are  in the  process  of
conducting  similar  surveys.  The Company will continue to seek  assurances and
clarification from its key suppliers on the issue of Year 2000 readiness.

3. Embedded microprocessors.

The Company recognizes that some of its manufacturing  equipment and some of its
office equipment (other than computers) include embedded  microprocessors  which
in some cases may prove to be non-Year  2000  compliant  and may disrupt  (until
replaced) the Company's operations. The Company's Metal Forming Segment has made
systematic inquiries of the suppliers of its key machinery,



<PAGE>



equipment and processes  controlled by microprocessors in an effort to establish
the status of embedded  microprocessors  in its  manufacturing  operations.  The
results of these  inquiries  have been generally  favorable,  and based upon the
representations  made by vendors,  this segment  believes its critical pieces of
manufacturing equipment are Year 2000 compliant.  The Company's HVAC Segment and
Metal  Products  Segment are in the process of  conducting  a similar  survey of
their  key   manufacturing   equipment   suppliers  on  the  issue  of  embedded
microprocessors.  Accordingly, the Company does not believe at this time that it
can  accurately  assess the  magnitude of the risk it faces in this regard.  The
Company intends to further query the suppliers of key machinery,  equipment, and
processes to determine their contingency plans available to address any failures
which may occur after January 1, 2000.  Management  will continue to utilize the
technical resources available to it to manage this exposure.

4. MCS.

The Company's  MCS  subsidiary,  which  produces  software  used in  information
systems  for the home health care  marketplace,  released a Year 2000  compliant
version of its principal  product,  MestaMed,  in the fall of 1998.  Many of the
users of MestaMed have  installed  the upgrade,  but a large number remain to be
installed.  MestaMed runs on a number of different  software  operating  systems
across a wide variety of hardware platforms.  MCS has been aware that some older
operating  systems used to run MestaMed are not Year 2000  compliant or will not
be  supported  by their  suppliers  and it has been  working  with  customers to
encourage  operating  system  upgrades.  MCS  recently  learned  that  two  such
operating  systems used in conjunction with MestaMed will not be fully supported
by its developer after October 1999. MCS's  preliminary  tests indicate that its
products  will be Year  2000  compliant  while  running  under  these  operating
systems.  MCS is  working  with the  supplier  to  determine  the  extent of the
supplier's support for Year 2000 issues for the affected operating systems.  The
Company  has  confirmed  from  the  supplier  that  it will  offer  a Year  2000
date-processing limited warranty on several versions of these operating systems.
MCS is working  closely with the supplier to confirm that this  warranty will be
extended to the remaining versions of those operating systems.  Depending on the
outcome of such discussions,  MCS will encourage its customers  affected by this
issue to upgrade to more  current  versions  of the  operating  system  prior to
December  31,  1999.  A  small  percentage  of  MCS  products  users  (generally
customized  versions of MestaMed or those not choosing  maintenance) are running
versions  that are not Year 2000  compliant.  The Company  intends to  encourage
these users to upgrade to the current  version of MestaMed prior to December 31,
1999.


The Company's state of readiness:

Relative to its internal  business  applications  systems,  the Company believes
that the timetables and plans described above relative to Year 2000 upgrades and
conversions for its various locations are generally  realistic.  The possibility
that  one or more of the  Company's  other  divisions  will  fail to meet  their
respective  deadlines  relative  to the Year  2000  upgrade  process  cannot  be
discounted.

Contingency Plans:

In some locations, the Company's plan to upgrade its business application system
to a Year 2000  compliant  version prior to December 31, 1999 may be delayed due
to limited  technical  resources  and/or other  implementation  challenges.  The
Company  believes it may be able, in some cases, to fix the Year 2000 problem in
its existing business  application  softwares in order to mitigate the effect of
such delays.  There can be no assurance,  however,  that such contingency  plans
will be effective and,  accordingly,  the risk that the Company's operations may
be  significantly  disrupted after December 31, 1999 cannot be discounted.  Such
disruptions could be financially material to the Company.







<PAGE>

Costs incurred relative to Year 2000 solutions:


The Company  estimates  that its total cost of  addressing  the Year 2000 issue,
(excluding costs incurred by MCS relative to its software  products),  including
software  licenses,   modifications,   training  and   implementation   will  be
approximately $2,500,000 over the 4-year period ended December 31, 1999. Of this
total,  the Company has  incurred  approximately  $1,400,000  as of December 31,
1998.





ENVIRONMENTAL DISCLOSURE

The  Company  is  subject  to  numerous  laws and  regulations  that  govern the
discharge  and disposal of materials  into the  environment.  The Company is not
aware,  at present,  of any  material  administrative  or  judicial  proceedings
against the Company  arising  under any  federal,  state or local  environmental
protection laws or regulations  ("Environmental  Laws").  There are, however,  a
number of activities in which the Company is engaged under Environmental Laws.


Permitting Activities

The Company is engaged in various matters with respect to obtaining, amending or
renewing  permits  required  under  Environmental  Laws to  operate  each of its
manufacturing  facilities.  Based on the information  presently available to it,
management  expects that all permit  applications  will be routinely handled and
management  does not believe  that the denial of any  currently  pending  permit
application  will have a  material  adverse  effect on the  Company's  financial
position or the results of operations.


Potentially Responsible Parties (PRP) Actions

The  Company  has  been  named or  contacted  by state  authorities  and/or  the
Environmental Protection Agency (the "EPA") regarding the Company's liability as
a potentially  responsible  party ("PRP") for the  remediation of several sites,
none of which actions represent a material  proceeding.  The potential liability
of the Company is based upon records that show the Company or other corporations
from whom the Company or its subsidiaries acquired assets used the sites for the
lawful disposal of hazardous  waste pursuant to third party  agreements with the
operators of such sites. Such PRP actions generally arise when the operator of a
site lacks the financial  ability to address  compliance with the  Environmental
Laws,  decisions and orders affecting the site in a timely and effective manner.
The governmental  authority  responsible for the site looks to the past users of
the facility and their  successors  to address the costs of  remediation  of the
site.

In High Point,  North Carolina,  the Company has been named as a PRP with regard
to the clean up of  groundwater  contamination  allegedly  due to  dumping  at a
landfill.  The Company's  activity at the site represented less than one percent
(1%) of all activity at the site. State authorities  continue to investigate the
extent of and remediation  methods for groundwater  contamination at or near the
site,  and the Company joined a joint defense group to help define and limit its
liabilities  whereby it may be required to  contribute  additional  non-material
sums as part of the remediation of groundwater contamination. The Company (along
with many other  corporations) is involved in PRP actions for the remediation of
a site  in  Southington,  Connecticut,  as a  result  of the  EPA's  preliminary
assignment of derivative  responsibility for the presence of hazardous materials
attributable to two other  corporations  from whom the Company  purchased assets
after the hazardous  materials had been disposed of at the Southington site. The
Company  is  currently  participating  as  part  of a  joint  defense  group  in
discussions  with  the EPA for a "de  minimis  settlement"  at the  Southington,
Connecticut site. The obligations of the Company in this matter are not expected
to be material to the Company's financial position or the results of operations.
The Company has received a notice from Pitt County,  North  Carolina that it may
(along with many  others) be a PRP at the Pitt County  Landfill  but the Company
believes  that any material  which it shipped to the site was not of a hazardous
nature. The Company has also received a request for



<PAGE>



information from the EPA addressed to a predecessor of the Company regarding the
generation, storage, transportation and possible release of hazardous substances
at a superfund  site in Coraopolis,  Pennsylvania,  and the Company has complied
with such request.  The Company  continues to  investigate  these  matters,  but
expects that they will not be material to the  Company's  financial  position or
results of operations.

Releases of Hazardous Materials

There have been  releases of  hazardous  materials  on a few parcels of property
which are  presently  leased  or  operated  by the  Company.  All such  releases
occurred prior to the occupation of the properties by the Company.  All releases
are in the process of  assessment  or  remediation.  At a site in  Massachusetts
leased by the Company the Lessor has  received  notice  from two  abutters  that
activities on the property  prior to the Company's  occupation may be the source
of  groundwater   contamination  on  the  abutters'  property.   Based  upon  an
investigation by the Lessor,  the claims do not appear to be supportable.  Based
on the information  presently  available to it, management does not believe that
the costs of addressing any of the releases will have a material  adverse effect
on the Company's financial position or the results of operations.

Changes to Environmental Laws Affecting Operations and Product Design

The  Company's  operations  and it's HVAC  products  that involve  combustion as
currently designed and applied entail the risk of future  noncompliance with the
evolving landscape of Environmental Laws. The cost of complying with the various
Environmental  Laws is  likely  to  increase  over  time,  and  there  can be no
assurance  that the  cost of  compliance,  including  changes  to  manufacturing
processes  and design  changes to current  HVAC product  offerings  that involve
atmospheric  combustion,  will not over the  long-term  and in the future have a
material  adverse effect on the Company's  results of operations  (especially in
light  of the  international  agreement  on the  reduction  of green  house  gas
emissions set forth in the Kyoto Protocol).




<PAGE>



Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA



               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

                    The Board of Directors and Shareholders'
                                  Mestek, Inc.

We have audited the accompanying consolidated balance sheets of Mestek, Inc. and
subsidiaries  as of  December  31, 1998 and 1997,  and the related  consolidated
statements of income, shareholders' equity, and cash flows for each of the years
in the three-year period ended December 31, 1998. These  consolidated  financial
statements   are  the   responsibility   of  the   Company's   management.   Our
responsibility  is  to  express  an  opinion  on  these  consolidated  financial
statements based on our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects,  the consolidated  financial position of Mestek, Inc. and
subsidiaries as of December 31, 1998 and 1997, and the  consolidated  results of
their operations and their  consolidated cash flows for each of the years in the
three year period ended December 31, 1998 in conformity with generally  accepted
accounting principles.

We have also audited Schedule II of Mestek, Inc. and subsidiaries as of December
31, 1998 and for each of the years in the  three-year  period ended December 31,
1998. In our opinion,  the schedule presents fairly,  in all material  respects,
the information required to be set forth therein.











Boston, Massachusetts
March 5, 1999

(except for Note 16, as to which the date is)
March 30, 1999










<PAGE>



                                  MESTEK, INC.
                          CONSOLIDATED BALANCE SHEETS
                               As of December 31,



                                                           1998            1997
                                                           ----            ----
(Dollars in thousands)
ASSETS

Current Assets
Cash and Cash Equivalents                                 $3,777         $2,494
Accounts Receivable - less allowances of
$3,443 and $2,529                                         55,443         52,696
Unbilled Accounts Receivable                                 286            248
Inventories                                               52,980         51,580
Deferred Tax Benefit                                       1,483          1,691
Other Current Assets                                       3,620          3,582
                                                         -------       --------

Total Current Assets                                     117,589        112,291

Property and Equipment - net                              55,841         40,715
Equity Investments                                          ---           8,778
Other Assets and Deferred Charges - net                    7,148          5,516
Excess of Cost over Net Assets of Acquired Companies       24,565        23,817
                                                         --------      --------

Total Asset                                              $205,143      $191,117
                                                         ========      ========












See Accompanying Notes to Consolidated Financial Statements





<PAGE>



                                  MESTEK, INC.
                    CONSOLIDATED BALANCE SHEETS (continued)
                               As of December 31,


                                                            1998          1997
                                                            ----          ----
(Dollars in thousands)
LIABILITIES AND SHAREHOLDERS' EQUITY

Current Liabilities:
Revolving Credit Agreement                                $12,619        $3,500
Current Portion of Long-Term Debt                             131        15,167
Accounts Payable                                           20,126        20,276
Accrued Salaries and Bonuses                                6,187         6,100
Accrued Commissions                                         3,985         4,157
Progress Billings in Excess of Cost
and Estimated Earnings                                      3,150         3,205
Customer Deposits                                           5,746         4,854
Other Accrued Liabilities                                  16,230        12,976
----------- ----------

Total Current Liabilities                                  68,174        70,235

Deferred Tax Liability                                        361           224
Long-Term Debt                                                438           662
Deferred Compensation                                           9            14
                                                         --------     ---------

Total Liabilities                                          68,982        71,135
                                                         --------     ---------

Minority Interests                                          2,863         1,975
                                                         --------     ---------

Shareholders' Equity:
Common Stock - no par, stated value $0.05 per share,
9,610,135 shares issued                                       479           479
Paid in Capital                                            15,434        15,434
Retained Earnings                                         125,263       109,199
Treasury Shares, at cost (719,830 and
683,830 common shares, respectively)                       (6,790)       (6,109)
Cumulative Translation Adjustment                          (1,088)         (996)
                                                        ---------     ---------
Total Shareholders' Equity                                133,298       118,007
                                                        ---------     ---------

Total Liabilities and Shareholders' Equity               $205,143      $191,117
                                                        =========     =========





See Accompanying Notes to Consolidated Financial Statements.





<PAGE>



                                  MESTEK, INC.
                       CONSOLIDATED STATEMENTS OF INCOME
                        For the years ended December 31,



                                             1998           1997         1996
                                             ----           ----         ----
(Dollars in thousands, Except Earnings Per Common Share)

Net Sales                                  $321,714      $310,749      $283,413
Net Service Revenues                         16,630        17,029        16,114
                                          ---------      --------      --------

Total Revenues                              338,344       327,778       299,527

Cost of Goods Sold                          230,156       223,539       208,050
Cost of Service Revenues                     10,052         9,790         9,249
                                          ---------      --------      --------

Gross Profit                                 98,136         94,449       82,228

Selling Expense                              42,970         40,929       35,492
General and Administrative Expense           19,015         20,096       16,202
Engineering Expense                           8,784          8,029        7,642
                                          ---------      ---------     --------

Operating Profit                             27,367         25,395       22,892

Interest Expense                             (1,256)        (1,434)      (1,377)
Gain on Sale of Property                       ---            ---         1,444
Other Income (Expense), Net                    (460)          (668)        (968)
                                          ---------      ---------    ---------

Income Before Income Taxes                   25,651         23,293       21,991
Income Taxes                                  9,587          8,888        8,662
                                          ---------      ---------    ---------

Net Income                                  $16,064        $14,405      $13,329
                                          =========      =========    =========

Basic Earnings per Common Share:             $ 1.80         $ 1.61       $ 1.49
                                          =========      =========    =========

Basic Weighted Average Shares Outstanding     8,921          8,929        8,938
                                          =========      =========    =========

Diluted Earnings Per Common Share            $ 1.80         $ 1.61       $ 1.49
                                          =========       ========    =========

Diluted Weighted Average Shares Outstanding   8,949          8,951        8,943
                                          =========      =========    =========




See Accompanying Notes to Consolidated Financial Statements.





<PAGE>

<TABLE>

                                  MESTEK, INC.
                CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
              For the years ended December 31, 1998, 1997 and 1996


<CAPTION>
<S>                                <C>       <C>       <C>        <C>        <C>             <C>
                                   Common    Paid In   Retained   Treasury   Translation     Cumulative
(Dollars in Thousands)             Stock     Capital   Earnings   Shares     Adjustment      Total
                                   ------    -------   --------   --------   ----------      ----------

Balance - December 31, 1995         $479     $15,434   $81,465    ($5,449)     ($883)         $91,046

Net Income                                              13,329                                 13,329
Common Stock Repurchase                                              (591)                      (591)
Cumulative Translation Adjustment                                                (66)             (66)
                                   ------    -------  --------    --------   ----------     ----------- 
Balance - December 31, 1996         $479     $15,434   $94,794    ($6,040)     ($949)         $103,718

Net Income                                              14,405                                  14,405
Common Stock Repurchased                                              (69)                         (69)
Cumulative Translation Adjustment                                                (47)              (47)
                                   ------    -------  --------    --------   ----------     -----------
Balance - December 31, 1997         $479     $15,434  $109,199    ($6,109)     ($996)         $118,007

Net Income                                              16,064                                  16,064
Common Stock Repurchased                                             (681)                        (681)
Cumulative Translation Adjustment                                                (92)              (92)
                                   ------    -------  --------    --------   ----------     -----------
Balance - December 31, 1998         $479     $15,434  $125,263   ($6,790)    ($1,088)         $133,298
                                   ======    =======  ========   ========    ==========     ===========



See Accompanying Notes to Consolidated Financial Statements

</TABLE>




<PAGE>



                                  MESTEK, INC.
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                        For the years ended December 31,

                                                      1998      1997     1996
                                                      ----      ----     ----
(Dollars in thousands)

Cash Flows from Operating Activities:
Net Income                                          $16,064   $14,405   $13,329
Adjustments to Reconcile Net Income to
Net Cash Provided by Operating Activities:
Depreciation and Amortization                         8,599     6,548     5,143
Provision for Losses on Accounts
Receivable, net of write-offs                           914       828       324
Gain on Sale of Property                               ---       ---     (1,444)
Net Change in Minority Interests net of
effects of acquisitions and dispositions                256      (82)      (491)
Changes in assets and liabilities net of
effects of acquisitions and dispositions:
Accounts Receivable                                  (2,782)  (2,498)    (5,047)
Unbilled Accounts Receivable                            (38)     (74)       (35)
Inventory                                               755   (6,894)     1,002
Accounts Payable                                       (560)     430      1,109
Other Liabilities                                     2,718      247     (2,212)
Progress Billings                                       (55)     306         (5)
Deferred Compensation                                    (5)      (4)        (4)
Other                                                (1,341)     109      4,399
                                                    -------  -------    -------

Net Cash Provided by Operating Activities           24,525    13,321     16,068
                                                    -------  -------    -------

Cash Flows from Investing Activities:
Capital Expenditures                               (12,802)  (11,740)    (7,213)
Disposition of Property & Equipment                   ---       ---       4,642
Acquisition of Businesses and Other
Assets, Net of Cash Acquired                        (2,877)  (12,886)   (14,172)
                                                   -------   -------    -------

Net Cash (Used in) Investing Activities            (15,679)  (24,626)   (16,743)
                                                   -------   -------    -------

Cash Flows from Financing Activities:
Net Borrowings (Repayments) Under
Revolving Credit Agreement                           9,119     3,500     (1,725)
Principal Payments Under Long
Term Debt Obligations                              (15,909)   (1,234)    (1,699)
Proceeds from Issuance of Long Term Debt              ---       ---      15,000
Repurchase of Common Stock                            (681)      (69)      (591)
                                                   -------   -------    -------

Net Cash (Used In) Provided by Financing Activities (7,471)    2,197     10,985
                                                   -------   -------    -------

Net Increase (Decrease) in Cash and Cash Equivalents 1,375    (9,108)    10,310
Translation effect on Cash                             (92)      (47)       (66)
Cash and Cash Equivalents - Beginning of Year        2,494    11,649      1,405
                                                   -------    -------   -------

Cash and Cash Equivalents - End of Year             $3,777    $2,494    $11,649
                                                   =======   =======    =======



See Accompanying Notes to Consolidated Financial Statements.



<PAGE>



                                  MESTEK, INC.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


1. SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The consolidated  financial  statements include the accounts of Mestek, Inc. and
its  subsidiaries,  collectively  referred  to  as  the  Company.  All  material
inter-company accounts and transactions have been eliminated in consolidation.


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  at the date of the
financial  statements and the reported  amounts of revenues and expenses  during
the reporting period. Actual results could differ from those estimates.


Revenue recognition and unbilled receivables

Revenue from product sales is  recognized at the time of shipment.  Revenue from
the  licensing of software  applications  and software  systems  development  is
recognized on the basis of completed contracts.  Unbilled receivables  represent
revenue earned in the current period but not billed to the customer until future
dates, usually within one month.


Cash equivalents

The Company considers all highly liquid investments with a remaining maturity of
90 days or less at the time of purchase to be cash equivalents. Cash equivalents
include investments in an institutional money market fund, which invests in U.S.
Treasury bills, notes and bonds,  and/or repurchase  agreements,  backed by such
obligations.


Inventories

Inventories   are  valued  at  the  lower  of  cost  or  market.   Approximately
eighty-three  percent  (83%) of the cost of  inventories  are  determined by the
last-in, first-out (LIFO) method.


Property and equipment

Property and equipment are carried at cost.  Depreciation  and  amortization are
computed  using the  straight-line  and  accelerated  methods over the estimated
useful lives of the assets or the life of the lease, if shorter. When assets are
retired or otherwise disposed of, the cost and related accumulated  depreciation
are removed  from the accounts  and any  resulting  gain or loss is reflected in
income for the period.  The cost of maintenance and repairs is charged to income
as incurred; significant improvements are capitalized.

Excess of Cost Over Net Assets of Acquired Companies (Goodwill)

The Company  amortizes  goodwill on the  straight-line  basis over the estimated
period to be benefited.  The acquisition of RBI, as more fully described in Note
2, resulted in goodwill of



<PAGE>



approximately  $1,807,000  which will be  amortized  over 25 years.  The Company
continually  evaluates the carrying value of goodwill.  Any impairments would be
recognized  when the  expected  future  operating  cash flows  derived  from the
underlying  acquired businesses is less than the carrying value of the goodwill.
Accumulated  amortization  of goodwill and other  intangibles was $3,640,000 and
$2,514,000 at December 31, 1998 and 1997, respectively.


Advertising Expense

Advertising costs are charged to operations as incurred. Such charges aggregated
$3,993,000,  $3,738,000,  and  $3,193,000 for the years ended December 31, 1998,
1997, and 1996 respectively.


Equity Investments

The Company's 48.6 percent interest in H. B. Smith Company,  Incorporated  (HBS)
is accounted for under the equity method. The company's 46.8 percent interest in
Eafco,  Inc.,  (EAFCO),  as more fully  explained  in Note 2, was  exchanged  on
November 2, 1998, pursuant to a tax-free reorganization, for 93.6 percent of the
foundry and machining operations of EAFCO.


Research and Development Expense

Research and  development  expenses are charged to operations as incurred.  Such
charges aggregated $2,136,000,  $1,628,000,  and $1,018,000, for the years-ended
December 31, 1998, 1997, and 1996, respectively.


Software Development Expenses

The Company's MCS, Inc.  subsidiary is in the business of  application  software
and systems  development.  SFAS No. 86 requires that development  costs incurred
subsequent to the establishment of technological  feasibility for the product be
capitalized,  however,  the  Company  does not  believe  that such  amounts  are
material to the consolidated financial statements.  Accordingly, all development
costs are charged to expense as incurred.  Such charges  aggregated  $1,992,000,
$1,575,000,  and  $1,338,000,  for the years ended December  31,1998,  1997, and
1996, respectively.


Treasury shares

Common stock held in the Company's treasury has been recorded at cost.


Earnings per common share

Basic earnings per share have been computed using the weighted average number of
common shares outstanding. Common stock options, as more fully described in Note
15, were considered in the computation of diluted  earnings per share but had no
effect.


Currency Translation

Assets and  liabilities  denominated in foreign  currencies are translated  into
U.S. dollars at exchange rates prevailing on the balance sheet date. Net foreign
currency  transactions are reported in the results of operations in U.S. dollars
at average exchange rates. Adjustments resulting from balance sheet translations
are excluded from the  determination of income and are accumulated in a separate
component of shareholders' equity.



<PAGE>



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.


New Accounting Standard

SFAS No. 130, "Reporting  Comprehensive  Income," established  standards for the
reporting and display of comprehensive  income. For the years ended December 31,
1998 and December 31, 1997, respectively,  the components of other comprehensive
income were  immaterial  and consisted  solely of foreign  currency  translation
adjustments.

The  Financial  Accounting  Standards  Board has issued  Statement  of Financial
Accounting  Standard No. 131,  which was  effective  for fiscal years  beginning
after December 15, 1997. FAS 131 requires,  in general, a "management  approach"
rather than an "industry approach" to the disclosure of segment information. The
Company adopted FAS 131 in 1998 and expanded its segmental reporting accordingly
as reflected in Note 12 to the Consolidated Financial Statements.


Reclassification

Reclassifications   are  made   periodically  to  previously   issued  financial
statements to conform to the current year presentation.


2. BUSINESS ACQUISITIONS

On November 2, 1998,  the  Company  exchanged  its  forty-six  and eight  tenths
percent (46.8%) interest in Eafco,  Inc. for ninety-three and six tenths percent
(93.6%) of the common stock of Boyertown  Foundry  Company  (BFC) of  Boyertown,
Pennsylvania.  BFC  received  one  hundred  percent  (100%) of the  foundry  and
machining  operations  of Eafco on that same date  pursuant to "a  split-up"  of
Eafco  structured for tax purposes as a tax-free  reorganization  under Internal
Revenue code Section 355. The Company has accounted for this  transaction  under
the  purchase  method of  accounting.  Accordingly,  the  carrying  value of the
Company's  equity  investment  in Eafco,  $8,778,000  at November  2, 1998,  was
treated as the purchase price for accounting  purposes.  The assets  acquired by
BFC included  substantially  all of the real estate and equipment owned by Eafco
in  Boyertown,  Pennsylvania  and  used in the  foundry,  machining  and  boiler
assembly  operations and certain other assets and liabilities.  BFC will operate
principally  as a cast-iron  foundry,  supplying  cast iron sections and related
machining  services to both the  Company's  Westcast  subsidiary  and to various
third parties,  including Peerless Heater Company,  Inc. In connection with this
transaction the Company loaned Eafco, Inc.  $1,500,000 and also assumed and paid
$650,000 of Eafco's then  outstanding  bank  indebtedness.  The $1,500,000  loan
bears  interest at  BankBoston's  (or any  successor's)  prime rate less one, is
payable over 42 months beginning on May 1, 2000, and is secured by substantially
all of Eafco's  assets.  BFC has also  leased a portion  of its boiler  assembly
facilities in Boyertown,  Pennsylvania,  to Eafco,  Inc.  which will continue to
assemble and warehouse boilers in Boyertown,  Pennsylvania,  for Peerless Heater
Company, Inc.

On April 29, 1998,  the  Company,  through a Canadian  subsidiary,  acquired 100
percent of the outstanding common stock of Ruscio Brothers Refractory Ltd. (RBR)
and 988721 Ontario, Inc. (988721), both of Mississauga, Ontario, Canada. RBR and
988721  manufacture  and  distribute  commercial and  residential  copper-finned
boilers and water  heaters  under the name Ruscio  Brothers  Industries,  (RBI),
primarily in Canada.  Copper-finned  boilers and water heaters are complementary
to the Company's other hydronic  products and the Company now distributes  RBI's
products in the United  States.  The purchase  price paid for the acquired stock
was  approximately  $2,877,000  (U.S.) and  included  goodwill of  approximately
$1,807,000 (U.S.)
<PAGE>
Pro forma unaudited  results of operations for BFC and RBI for 1998 and 1997 are
not provided herein as they are not considered material.

On January 2, 1997, the Company's National Northeast  subsidiary paid $4,028,000
in  additional  consideration  related to the  purchase  on October  30, 1995 of
approximately  eighty-three  percent (83%) of the issued and outstanding  voting
common  stock  of  National   Northeast   Corporation  and  National   Southeast
Corporation  (National).  This payment  completed the Company's  acquisition  of
National.

On January 31, 1997, the Company acquired  ninety-one and one hundredth  percent
(91.01%) of the issued and outstanding  common stock of Hill  Engineering,  Inc.
(Hill)  of Villa  Park,  Illinois  and  Danville,  Kentucky.  Hill is a  leading
producer  of  precision  tools  and  dies  for  the  gasket   manufacturing  and
roll-forming  industries and other specialty equipment.  The purchase price paid
for the  acquired  stock was  $5,141,000.  The  Company has  accounted  for this
acquisition under the purchase method of accounting.

On November  3, 1997 the Company  acquired  one  hundred  percent  (100%) of the
issued and outstanding common stock of Coilmate, Inc. (Coilmate) of Southington,
Connecticut.  Coilmate is the leading producer of pallet decoiling equipment for
the metal  stamping and roll  forming  industries.  The purchase  price paid was
$3,521,000.  The Company has accounted for this  acquisition  under the purchase
method of accounting.

Pro forma unaudited  results of operations for Hill Engineering and Coilmate for
1997 and 1996 are not provided herein as they are not considered material.

On February  2, 1996,  the Company  acquired  all of the issued and  outstanding
common  stock of Omega Flex,  Inc. of Exton,  Pennsylvania  (Omega).  Omega is a
manufacturer of flexible metal hose and related hose fabrications.  The purchase
price paid for the acquired stock was $9,119,000.  The Company has accounted for
this acquisition  under the purchase method of accounting.  Omega has leased its
manufacturing and office facilities  through December 31, 2001, for $268,000 per
year.

On February 5, 1996,  the Company  acquired  certain assets of the press feeding
and  cut-to-length  line  businesses  of Rowe  Machinery &  Automation,  Inc. of
Dallas,  Texas  (Rowe).  Rowe is a leading  manufacturer  of press  feeding  and
cut-to-length   line  equipment   serving  the  appliance,   office   furniture,
automotive,  and many other  markets.  The purchase  price paid was  $5,495,000,
including the assumed  liabilities of $1,900,000.  The Company has accounted for
this acquisition under the purchase method of accounting. The Company leased the
Rowe  facility in Dallas,  including  machinery and  equipment,  on a short-term
basis through April of 1997.

On August 30, 1996,  the Company  acquired  substantially  all of the  operating
assets of Dahlstrom  Industries,  Inc.  (Dahlstrom) of Schiller Park,  Illinois.
Dahlstrom is a leading  manufacturer  of  roll-forming  equipment  for the metal
fabrication  industry.  The purchase price paid was $4,288,000 including assumed
liabilities of $2,606,000.  The Company has accounted for this acquisition under
the purchase method of accounting.

Pro forma unaudited  results of operations for Omega,  Rowe, and Dahlstrom,  for
1996 are not provided herein, as they are not considered material.

Under the  purchase  method of  accounting,  results of  operations  of acquired
businesses  are included in  consolidated  operations  subsequent to the date of
acquisition.






<PAGE>



3. INVENTORIES

Inventories consisted of the following at December 31:

                                                   1998                1997
                                                   ----                ----

Finished Goods                                  $21,803,000        $18,012,000
Work-in-progress                                 13,948,000         15,386,000
Raw materials                                    24,463,000         25,842,000
                                                -----------        -----------
                                                 60,214,000         59,240,000
Less provision for LIFO
method of valuation                              (7,234,000)        (7,660,000)
                                                -----------        -----------
                                                $52,980,000        $51,580,000
                                                ===========        ===========

Progress billings exceeded related contract costs by $3,150,000,  and $3,205,000
at December 31, 1998 and 1997, respectively. As such, these amounts are reported
as a liability in the accompanying consolidated financial statements.


4. PROPERTY AND EQUIPMENT

Property and equipment consisted of the following at December 31:

                                                               Depreciation and
                                                              Amortization Est.
                                     1998            1997        Useful Lives
                                     ----            ----     -----------------
Land                              $2,395,000       $2,045,000
Buildings                         21,887,000       18,319,000     19-39 Years
Leasehold Improvnts                4,474,000        4,352,000     15-39 Years
Equipment                         78,820,000       60,260,000      3-10 Years
                                 -----------      -----------
                                 107,576,000       84,976,000
Accumulated Depreciation         (51,735,000)     (44,261,000)
                                ------------     ------------
                                 $55,841,000      $40,715,000
                                ============     ============

The above amounts include $6,870,000,  and $1,939,000,  at December 31, 1998 and
1997,  respectively,  in assets  that had not yet been  placed in service by the
Company. No depreciation was recorded in the related periods for these assets.

Depreciation  and   amortization   expense  was  $8,599,000,   $6,548,000,   and
$5,143,000, for the years ended December 31, 1998, 1997, and 1996, respectively.


5. EQUITY INVESTMENTS

H. B. Smith Company Incorporated (HBS)

The  Company's  investment  in HBS is carried at a zero balance  reflecting  the
Company's  equity in HBS'  cumulative  losses.  The Company has no obligation to
fund future HBS operating losses.


Eafco, Inc. (EAFCO)

As explained more fully in Note 2, the Company's  forty-six and eight hundredths
percent (46.8%)  investment in Eafco, Inc. was exchanged on November 2, 1998 for
ninety-three  and six  tenths  percent  (93.6%)  of the  foundry  and  machining
operations of Eafco.




<PAGE>



6. LONG TERM DEBT

Long-Term Debt consisted of the following:

                                                     Dec. 31,         Dec. 31,
                                                       1998             1997
                                                       ----             ----

Senior Notes                                           ---          $15,000,000
Revolving Loan Agreement                          $12,619,000         3,500,000
Other Bonds and Notes Payable                         569,000           829,000
                                                -------------     --------------
                                                   13,188,000        19,329,000
Less Current Maturities                           (12,750,000)      (18,667,000)
                                                 ------------      ------------
                                                $     438,000     $     662,000
                                                =============     =============

Revolving Loan Agreement - The Company has a Revolving Loan Agreement and Letter
of Credit  Facility  (the  Agreement)  with a  commercial  bank.  The  Agreement
provides $50 million of unsecured  revolving credit in U. S. dollars, $5 million
of unsecured  involving credit in Canadian  dollars,  and $10 Million of standby
letter  of credit  capacity.  Borrowings  outstanding  under  the  Agreement  at
December 31, 1998 include $8,400,000 (CA$) in Canadian denominated indebtedness.
Borrowings  under the  Agreement  bear  interest at a floating rate based on the
bank's prime rate less one and  seventy-five  hundredths  percent (1.75%) or, at
the discretion of the borrower, LIBOR plus a quoted market factor. The Agreement
was recently  renewed on a one-year  basis through  April 30, 1999.  The Company
expects to renew the  Agreement  as of April 30, 1999 on a one-year  basis.  The
Revolving Loan Agreement  contains financial  covenants,  which require that the
Company maintain certain current ratios, working capital amounts,  capital bases
and leverage  ratios.  This Agreement 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 of net
income.

Senior  Notes - On  April  5,  1996  the  Company  borrowed  $15,000,000  from a
commercial  insurance  company on an unsecured basis,  executing a Note Purchase
Agreement and the related Senior Notes, (the Notes).  The Notes matured and were
paid off on March 1,  1998.  The Notes  bore  interest  at five and  fifty-three
percent (5.53%) per annum.

Other Bonds and Notes  Payable - The Company is obligated  under the terms of an
Industrial  Revenue  Bond (the  Bond)  secured  by its  facility  in  Wyalusing,
Pennsylvania.  The Bond bears  interest at five percent (5%) and matures on July
25,  2001.  The  outstanding  balance  under the Bond at  December  31, 1998 was
$104,000.  The Company's  National  Northeast  subsidiary  is obligated  under a
non-interest  bearing subordinated Note Payable on which interest was imputed at
eight percent  (8%).  The note is secured by certain  pieces of  equipment.  The
outstanding balance under the note at December 31, 1998 was $65,000 and the note
matures on May 1, 2001. The Company's Hill  Engineering  subsidiary is obligated
under an Industrial Revenue Bond secured by certain of its operating assets. The
outstanding  balance under the bond at December 31, 1998 was $400,000.  The bond
bears  interest  at  eighty  percent  (80%) of the  prime  rate and  matures  on
September 1, 2005.

Cash paid for interest was $1,256,000,  $1,434,000,  and $1,377,000,  during the
years ended December 31, 1998, 1997, and 1996, respectively.

Maturities of long-term debt in each of the next five years are as follows:

     1999                $12,750,000
     2000                    115,000
     2001                     72,000
     2002                     50,000
     2003                     50,000





<PAGE>



The fair value of the Company's long-term debt is estimated based on the current
interest rates offered to the Company for debt of the same remaining maturities.
Management believes the carrying value of debt and the contractual values of the
outstanding  letters of credit  approximate their fair values as of December 31,
1998.

7. SHAREHOLDERS' EQUITY

The Company has authorized  common stock of 20,000,000 shares with no par value,
and a stated value of $0.05 per share.  As of December  31, 1998,  John E. Reed,
Chairman,  President  and CEO of the Company and Stewart B. Reed,  a Director of
the Company and son of John E. Reed, together beneficially own a majority of the
outstanding shares of the Company's common stock.

By a vote of its  shareholders  at its annual meeting of shareholders on May 22,
1996, the Company amended its Articles of Incorporation to authorize  10,000,000
shares of a new class (or classes) of preferred stock (the Preferred  Stock) and
to eliminate both its $5.00 convertible,  non-cumulative,  non-voting, $100 par,
preferred stock (the Convertible  Preferred) and its $6.00, $100 par, redeemable
preferred stock (the Redeemable Preferred). As of December 31, 1998 no shares of
the Preferred Stock have been issued.


8. INCOME TAXES

Income before income taxes included foreign losses of ($1,166,000),  ($730,000),
and  ($474,000)  in 1998,  1997,  and 1996,  respectively.  Income  tax  expense
(benefit) consisted of the following:

                                           1998           1997           1996
                                           ----           ----           ----
Federal Income Tax:
Current                                $8,897,000     $7,188,000     $7,259,000
Deferred                                 (283,000)       527,000       (134,000)
State Income Tax:
Current                                 1,708,000      1,045,000      1,551,000
Deferred                                 (141,000)       166,000        (29,000)
Foreign Income Tax:
Current                                    18,000         18,000         15,000
Deferred                                 (612,000)       (56,000)        ---
                                       ----------     ----------     ----------

Income Taxes                           $9,587,000     $8,888,000     $8,662,000
                                       ==========     ==========     ==========

Total income tax expense from  continuing  operations  differed from  "expected"
income tax  expense,  computed by applying the U.S.  federal  income tax rate of
thirty-five percent(35%) to earnings before income tax, as follows:

                                                 1998       1997        1996
                                                 ----       ----        ----

Computed "expected" income tax               $9,068,000  $8,218,000  $7,736,000
State income tax, net of federal tax benefit    867,000     787,000     989,000
Foreign tax rate differential                   (35,000)    (22,000)    (14,000)
Other - net                                    (313,000)    (95,000)    (49,000)
                                             ----------- ----------- -----------

Income Taxes                                 $9,587,000  $8,888,000  $8,662,000
                                             =========== =========== ===========




<PAGE>



A  deferred  income  tax  (expense)   benefit  results  from  temporary   timing
differences  in the  recognition  of  income  and  expense  for  income  tax and
financial reporting purposes.  The components of and changes in the net deferred
tax assets  (liability)  which give rise to this  deferred  income tax (expense)
benefit for the year ended December 31, 1998 are as follows:

                                                        Change
                                       December 31,    (Expense)    December 31,
                                           1997          Benefit         1998
                                       ------------     ---------   ------------
Deferred Tax Assets:
Warranty Reserve                         $566,000       $90,000        $656,000
Compensated Absences                      722,000        (6,000)        716,000
Inventory Valuation                       468,000       140,000         608,000
Accounts Receivable Valuation             858,000      (617,000)        241,000
State Tax Operating Loss
Carryforward                              158,000       (27,000)        131,000
Foreign Tax Operating Loss
Carryforward                              768,000       352,000       1,120,000
Deferred Income on Sale of Assets
to Non-consolidated Investees             159,000          ---          159,000
Other                                      17,000        10,000          27,000
                                        ----------    ---------      ----------
Total Gross Deferred Tax Assets         3,716,000       (58,000)      3,658,000
Less Valuation Allowance                 (119,000)         ---         (119,000)
                                       ----------     ---------      ----------
Deferred Tax Assets                     3,597,000       (58,000)      3,539,000
                                       ----------     ---------      ----------
Deferred Tax Liabilities:
Prepaid Expenses                         (733,000)      232,000        (501,000)
Depreciation and Amortization          (1,397,000)     (519,000)     (1,916,000)
                                       ----------     ---------      ----------
Deferred Tax Liabilities               (2,130,000)     (287,000)     (2,417,000)
                                       ----------     ---------      ----------
Net Deferred Tax Assets                $1,467,000     ($345,000)     $1,122,000
                                       ==========     =========      ==========


A valuation  allowance of $195,000 was  established  at December 31, 1993.  This
allowance  reflects  uncertainties  as to the  realization  of a portion  of the
foreign  tax  operating  loss  carryforward  identified  above.  This  valuation
allowance  was  adjusted  downward to $119,000 on December  31, 1995 because the
foreign  operations  resulted in earnings for the year. At December 31, 1998, no
additional  valuation  allowance has been established  relative to the remaining
foreign  tax  operating   loss   carryforward   or  state  tax  operating   loss
carryforward.  It is  management's  belief  that it is more likely than not that
these carryforwards will be utilized prior to their expiration.  The Company has
available  to it a number  of tax  planning  opportunities  which  support  this
conclusion.

At December 31, 1998, the Company has state tax operating loss and
foreign tax operating loss carryforwards of approximately $3,401,000 and
$2,416,000, respectively, which are available to reduce future income taxes
payable, subject to applicable "carryforward" rules and limitations. These
losses begin to expire after the following years:
State Foreign

          2000           ---         $2,416,000
          2007      $3,401,000           ---
                    -----------      -----------
                    $3,401,000       $2,416,000
                    ===========      ===========

Cash paid for income taxes was  $7,876,000,  $9,027,000,  and $7,354,000 for the
years ended December 31, 1998, 1997 and 1996 respectively.




<PAGE>



9. LEASES

Related Party Leases

The Company leases various manufacturing facilities and equipment from companies
owned by certain  officers  and  directors of the  Company,  either  directly or
indirectly,  through  affiliates.  The leases generally provide that the Company
will bear the cost of property taxes and insurance.

Details of the principal  operating  leases with related  parties as of December
31, 1998 including the effect of renewals and amendments  executed subsequent to
December 31, 1998 are as follows:

                                        Date                  Basic      Minimum
                                         Of                  Annual       Future
                                        Lease     Term       Rental      Rentals

Sterling Realty Trust
Land and Building - Main              12/17/84   15 years   $192,000    $192,000
Land and Building - Engineering       07/01/98    5 years     76,800     345,600
Land and Building - South Complex     01/01/94   15 years    256,800   2,568,000
Machinery & Equipment                 01/01/93    5 years     41,460        *
(Westfield, Farmville & Wrens
Locations)

Machinery Rental
Machinery & Equipment                 01/01/93    5** years  223,980     223,980
(Westfield, Farmville, Wrens
and South Windsor Locations)

Elizabeth C. Reed Trust
Machinery & Equipment                 01/01/93    5 years     14,100        *

Production Realty
Land and Building                     01/01/97    2++years   120,000     240,000

Rudbeek Realty Corp.
(Farmville Location)                  11/02/92+  18.16 years 435,600   5,227,000

MacKeeber
(South Windsor Location)              01/01/97    8 years    324,600   1,947,600

* Original  lease  expired  01/01/98,  month-to-month  rental  terminated  as of
12/31/98, and machinery and equipment sold to the Company in January of 1999.

**   Original lease expired on 01/01/98, month-to-month rental to continue until
     12/31/99.

+ Original  lease  amended  4/1/98  extending  the lease term to  12/31/10;  and
amended again 7/1/98 increasing rent expense to $36,300 per month.

++ Lease was renewed as of 1/1/99 for an additional two-year renewal term 
     at $4.80/sf. for 25,000sf.






<PAGE>



All Leases

Rent expense for operating  leases,  including those with related  parties,  was
$2,801,000,  $2,719,000,  and  $3,454,000 for the years ended December 31, 1998,
1997 and 1996 respectively.

Future minimum lease payments under all noncancellable leases as of December 31,
1998 are as follows:
                                                      Operating
          Year Ending December 31,                     Leases

               1999                                   $2,612,121
               2000                                    1,817,000
               2001                                    1,362,000
               2002                                    1,094,000
               2003                                    1,052,000
         After 2003                                    5,239,000


Total minimum lease payments                         $13,176,121
                                                    ============


10. EMPLOYEE BENEFIT PLANS

The Company maintains a qualified non-contributory  profit-sharing plan covering
all eligible employees.  Contributions to the plan were $1,118,000,  $1,011,000,
and $  872,000,  for  the  years  ended  December  31,  1998,  1997,  and  1996,
respectively.  Contributions  to the Plan are defined as three  percent  (3%) of
gross wages up to the current Old Age, Survivors, and Disability, (OASDI), limit
and six percent (6%) of the excess over the Old Age, Survivors,  and Disability,
(OASDI),  limit,  subject to the maximum  allowed under the Employee  Retirement
Income Security Act, (ERISA).  The plan's vesting terms are twenty percent (20%)
vesting  after 3 years of service,  forty  percent  (40%)  after 4 years,  sixty
percent (60%) after 5 years, eighty percent (80%) after 6 years, and one hundred
percent (100%) vesting after 7 years.

In addition to the  profit-sharing  plan,  the Company also offers the following
defined contribution benefit plans:

The Company maintains a Retirement Savings Plan qualified under Internal Revenue
Code Section 401(k) for employees covered under regional  collective  bargaining
agreements.  Service eligibility  requirements differ by division and collective
bargaining agreement. Participants may elect to have up to fifteen percent (15%)
of their  compensation  withheld,  up to the  maximum  allowed  by the  Internal
Revenue  Code.  Participants  may  also  elect to make  nondeductible  voluntary
contributions up to an additional ten percent (10%) of their gross earnings each
year  within  the  legal  limits.  The  Company  contributes  differing  amounts
depending upon the division's collective bargaining agreement. Contributions are
funded on a current basis.  Contributions  to the Plan were $302,000,  $269,000,
and  $247,000,   for  the  years-ended   December  31,  1998,  1997,  and  1996,
respectively.

The Company  maintains a separate  qualified 401(k) Plan for salaried  employees
not covered by a collective  bargaining  agreement,  who choose to  participate.
Participants may elect to have up to fifteen percent (15%) of their compensation
withheld,  up to the maximum allowed by the Internal Revenue Code.  Participants
may also elect to make nondeductible voluntary contributions up to an additional
ten percent (10%) of their gross earnings each year within the legal limits. The
Company  contributes  $0.25 of each $1.00 deferred by participants and deposited
to the Plan not to exceed one and five tenths  percent  (1.5%) of an  employee's
compensation.  The  Company  does not match any amounts  for  withholdings  from
participants  in excess of six  percent  (6%) of their  compensation  or for any
nondeductible  voluntary  contributions.  Contributions  are funded on a current
basis.  Contributions to the Plan were $435,000,  $392,000, and $349,000 for the
years ended December 1998, 1997, and 1996, respectively.



<PAGE>



One of the Company's  subsidiaries  maintains a qualified  defined  contribution
target benefit pension plan,  which covers  substantially  all of its employees.
Pension costs are accrued annually based on contributions earned by participants
under plan provisions as determined by an independent actuary. The total expense
related to this  pension  plan for the twelve  months  ended  December 31, 1998,
1997, and 1996 was $88,000, $65,000, and $70,000, respectively.

The Company maintains bonus plans for its officers and other key employees.  The
plans generally allow for annual bonuses for individual employees based upon the
operating  results of related  profit  centers in excess of a percentage  of the
Company's  investment in the respective profit centers. The Company maintains an
employment agreement with its chief executive officer.

Approximately  twenty-eight percent (28%) of the Company's employees are covered
under  collective  bargaining  agreements,  of  which  nineteen  (19%)  of these
employees are covered under agreements expected to be renewed in 1999.


11. COMMITMENTS AND CONTINGENCIES

The Company is subject to several legal actions and proceedings in which various
monetary claims are asserted.  Management, after consultation with its corporate
counsel 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.

The Company is  obligated  as  guarantor  with  respect to the debt of MacKeeber
Associates Limited  Partnership,  a Connecticut  Limited  Partnership,  under an
Industrial  Development  Bond  issued  in  1984 by the  Connecticut  Development
Authority.  The balance  outstanding  under the bond as of December 31, 1998 was
$772,000.

The  Company  is  subject  to  numerous  laws and  regulations  that  govern the
discharge  and  disposal of  materials  into the  environment.  Liabilities  for
environmental  remediation  and/or  restoration are recorded when it is probable
that obligations have been incurred and the amounts can be reasonably estimated.
The Company is not aware, at present, of any material administrative or judicial
proceedings  against  the  Company  arising  under any  federal,  state or local
environmental  protection laws or regulations  (Environmental  Laws). There are,
however,  a  number  of  activities  in  which  the  Company  is  engaged  under
Environmental  Laws.  The Company is engaged in various  matters with respect to
obtaining,  amending or renewing  permits required under  Environmental  Laws to
operate  each of its  manufacturing  facilities.  The  Company or various of its
subsidiaries  have been  named or  contacted  by state  authorities  and/or  the
Environmental Protection Agency (the EPA) regarding the Company's liability as a
potentially  responsible  party (PRP) for the remediation of several sites, none
of which, in the judgement of management,  would have a material  adverse impact
on the financial  condition or results of operations of the Company.  There have
been  releases of  hazardous  materials  on a few parcels of property  which are
presently leased or operated by the Company.  Based on the information presently
available to it, management does not believe that the costs of addressing any of
the releases  will have a material  adverse  effect on the  Company's  financial
position or the results of operations.


12. SEGMENT INFORMATION

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

The  Company  has  four  reportable   segments:   the  manufacture  of  heating,
ventilating  and  air-conditioning  equipment  (HVAC),  the manufacture of metal
handling and metal forming  machinery (Metal  Forming),  the production of metal
products (Metal Products),  and computer software development and system design,
(Computer Software).




<PAGE>



The Company's HVAC segment manufactures and sells a wide variety of residential,
commercial and industrial  heating,  cooling,  and air distribution  products to
independent wholesales supply warehouses,  to mechanical,  sheet metal and other
contractors,  and in some  cases  to other  HVAC  manufacturers  under  original
equipment  manufacture  (OEM)  contracts.  The products  include finned tube and
baseboard radiation equipment gas fired heating and ventilating  equipment,  air
damper  equipment  and related air  distribution  products  and  commercial  and
residential boilers. The products are marketed under a number of franchise names
including Sterling, Beacon Morris, Smith, Hydrotherm,  RBI, Vulcan, Applied Air,
Wing, AWV, ABI, Arrow, Koldwave, and SpacePak.

The Company's Metal Forming Segment designs, manufactures and sells a variety of
metal handling and metal forming  products under names such as  Cooper-Weymouth,
Peterson,  Dahlstrom,  Hill  Engineering,   Coilmate/Dickerman,  and  Rowe.  The
products are sold through  independent dealers in most cases to end-users and in
some cases to other original equipment manufacturers.  The products include roll
formers, feeds, straighteners, cradles, cut-to-length lines, specialty dies, and
flying cut-off saws.

The Company's  Metal Products  segment  manufactures a variety of metal products
including aluminum extrusions,  flexible metal hose and grey iron castings. This
segment sells its products mostly as components to manufacturers who incorporate
them into  their own  products.  In some  cases  flexible  metal hose is sold to
distributors.

The Company's Computer Software segment operates under the name MCS and develops
and  sells  software  used  principally  in  the  medical   information  systems
marketplace.  MCS's  products  include  software  used to manage the  day-to-day
operations of durable medical equipment dealers and home health agencies.


Measurement of segment profit or loss and segment assets:

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


Factors management used to identify the enterprise's reportable segments:

The  Company's  reportable  segments  are  business  units that offer  different
products.  The  reportable  segments  are each managed  separately  because they
manufacture and distribute distinct products using distinct production processes
intended for distinct marketplaces.




<PAGE>





Year ended
December 31, 1998


                                       Metal    Metal  Computer   All
                              HVAC    Product  Forming Software  Other   Totals

Revenues from External
Customers                   $229,704  50,745   41,265   16,630    ---   $338,344

Intersegment & Intrasegment
Revenues                      $7,851   2,288      234     ---     ---    $10,373

Interest Expense                $711     342      169       34    ---     $1,256

Depreciation Expense          $3,870   2,242    1,168      194    ---     $7,474

Amortization Expense            $231     584      373     ---     ---     $1,188

Segment Operating Profit     $15,668   5,194    4,170    2,335    ---    $27,367

Segment Assets              $114,004  55,842   29,916    5,589    ---    205,351

Expenditures for
Long-lived Assets (1.)        $3,064   8,185    1,025      528    ---    $12,802


Year ended
December 31, 1997


                                        Metal   Metal  Computer   All
                              HVAC     Product Forming Software Other(2.) Totals

Revenues from External
Customers                   $229,423  42,797   38,529   17,029    ---   $327,778

Intersegment & Intrasegment
Revenues                      $7,809     634      509     ---     ---     $8,952

Interest Expense                $850     265      215       38      66    $1,434

Depreciation Expense          $2,732   1,791      940      119    ---     $5,582

Amortization Expense            $144     584      246      ---    ---       $974

Segment Operating Profit     $17,846   2,723    1,537    3,289    ---    $25,395

Segment Assets              $113,405  35,312   28,577    5,045    8,778 $191,117

Expenditures for
Long-lived Assets (1.)        $5,802   5,589      183      166    ---    $11,740



Year ended
December 31, 1996


                                       Metal    Metal  Computer   All
                              HVAC    Product  Forming Software Other(2.) Totals

Revenues from External
Customers                   $228,115  31,052   24,246   16,114    ---   $299,527

Intersegment & Intrasegment
Revenues                      $7,052    ---      ---      ---     ---     $7,052

Interest Expense                $920     214      135       37      71    $1,377

Depreciation Expense          $3,020   1,540      278       20    ---     $4,858

Amortization Expense            $169     368      104     ---     ---       $641

Segment Operating Profit     $16,142   2,261    1,426    3,063    ---    $22,892

Segment Assets              $113,587  26,460   16,631    4,554   8,778  $170,010

Expenditures for
Long-lived Assets (1.)        $3,950   1,440    1,619      204    ---     $7,213


(1.) Excludes long-lived assets acquired via business acquisition.

(2.)  Segment  Assets  in All  Other in 1997 and 1996  represent  the  Company's
investment in Eafco,  Inc. which was exchanged,  as more fully described in Note
2, on November 2, 1998 for  ninety-three  and six tenths percent  (93.6%) of the
foundry and machining operations of Eafco. The business assets thus acquired and
the related results of operations are included in the Metal Products  segment in
1998.


RECONCILIATION WITH CONSOLIDATED DATA:

Revenues                                               1998     1997    1996
--------                                               ----     ----    ----

Total external revenues for reportable segments      $338,344 $327,778 $299,527
Inter & Intrasegment revenues for reportable segments  10,373    8,952    7,052
Elimination of Inter & Intrasegment revenues          (10,373)  (8,952)  (7,052)
                                                     -------- -------- --------
Total consolidated revenues                          $338,344 $327,778 $299,527
                                                     ======== ======== ========

Profit or Loss

Total profit or loss for reportable segments          $27,367  $25,395  $22,892
Interest Expense                                       (1,256)  (1,434)  (1,377)
Gain on sale of property                                 ---      ---     1,444
Other income (expense) net                               (460)    (668)    (968)
                                                      -------  -------- -------
Income before income taxes                            $25,651  $23,293  $21,991
                                                      ======== ======== ========





<PAGE>



Assets:

Total assets for reportable segments                 $205,143  $182,339 $161,232
Equity Investment in Eafco Inc. (see Note 2)             ---      8,778    8,778
                                                     --------  -------- --------
Total consolidated assets                            $205,143  $191,117 $170,010
                                                     ========= ======== ========

GEOGRAPHIC INFORMATION:

                                             1998         1997          1996
                                             ----         ----          ----

Revenues:

United States                               $314,603    $305,728       $273,980
Canada                                        17,310      14,235         17,590
Other Foreign Countries                        6,431       7,815          7,957
                                            --------    --------       --------
Consolidated Total                          $338,344    $327,778       $299,527
                                            ========    ========       ========

Long Lived Assets:

United States                                $78,502     $64,349        $45,163
Canada                                         1,904         183            251
Other Foreign Countries                        ---         ---            ---  
                                             -------     -------        -------
Consolidated Total                           $80,406      $64,532       $45,414
                                             =======      =======       =======


13. SELECTED QUARTERLY INFORMATION (UNAUDITED)

The table below sets forth selected quarterly  information for each full quarter
of 1998 and 1997.

(Dollars in thousands except per common share amounts).


1998                                       1st        2nd       3rd       4th  
----
Quarter Quarter Quarter Quarter

Total Revenues                           $75,649    $77,688   $92,013   $92,994
Gross Profit                             $21,172    $21,607   $26,432   $28,925

Net Income                                $3,370     $2,832    $4,324    $5,538
Per Common Share:
Basic                                     $0.38      $0.32     $0.48     $0.62
Diluted                                   $0.38      $0.32     $0.48     $0.62


1997                                       1st        2nd       3rd       4th
----
Quarter Quarter Quarter Quarter

Total Revenues                           $75,216    $74,868   $87,327   $90,367
Gross Profit                             $20,427    $20,016   $24,980   $29,026

Net Income                                $3,253     $2,241    $3,841    $5,070
Per Common Share:
Basic                                     $0.36      $0.25     $0.43     $0.57
Diluted                                   $0.36      $0.25     $0.43     $0.57





<PAGE>



14. COMMON STOCK BUYBACK PROGRAM

In 1998 and 1997 the Company  continued  its program of selective  "open-market"
and odd lot purchases. 36,000 and 3,466 of such shares were acquired in 1998 and
1997, respectively. All such shares are accounted for as treasury shares.


15. STOCK OPTION PLANS

On March 20, 1996 the Company adopted a stock option plan, the Mestek, Inc. 1996
Stock Option Plan, (the Plan),  which provides for the granting of incentive and
non-qualified  stock  options  of up to  500,000  shares  of  stock  to  certain
employees  of the  Company  and  other  persons,  including  directors,  for the
purchase  of the  Company's  common  stock at fair  market  value at the date of
grant.  The Plan was  approved by the  Company's  shareholders  on May 22, 1996.
Options  granted  under the plan vest over a five-year  period and expire at the
end of ten years. During 1996, 90,000 options were granted, at an exercise price
of $13.75,  to four employees and these options are  outstanding at December 31,
1998.

As of March 20,  1996,  the date of grant,  the fair  value of the  options  was
estimated  using the  Black-Scholes  model with the following  weighted  average
assumptions:

Expected life (years)              10
Interest                            6.56%
Volatility                         22.5%
Dividend yield                      0%

Effective  with 1996,  the  Company  adopted  the  provisions  of  Statement  of
Financial Accounting Standards No. 123, Accounting for Stock-Based Compensation,
SFAS No. 123. As permitted by the statement,  the Company has chosen to continue
to account  for  stock-based  compensation  using the  intrinsic  value  method.
Accordingly,  no  compensation  expense has been  recognized for its stock-based
compensation  plan. Had the fair value method of accounting  been applied to the
Company's stock option plan, with  compensation  cost for the Plan determined on
the basis of the fair value at the grant  date for awards in 1998 and 1997,  the
Company's net income and earnings per share would have been as follows:

                                                      1998              1997
                                                      ----              ----

Net Earnings - as reported                         $16,064.00        $14,405.00
Net Earnings - pro forma                           $15,985.00        $14,326.00
Earnings per share - as reported                        $1.80             $1.61
Earnings per share - pro forma                          $1.79             $1.61


The application of SFAS 123 for pro forma  disclosure may not be  representative
of future effects of applying the statement.

On January 4, 1999, the Company granted 65,000 additional options at an exercise
price of $20.00 to three  employees.  The options  granted vest over a five-year
period and expire at the end of ten years.


16.  SUBSEQUENT EVENT

On March 26,  1999,  the Company  acquired  substantially  all of the  operating
assets of the  Anemostat  Products  and  Anemostat-West  Divisions  of  Dynamics
Corporation of America, a wholly-owned subsidiary of CTS Corporation.  Anemostat
manufactures commercial air distribution products (grilles, registers, diffusers
and VAV boxes);  security air distribution  products;  and door and vision frame
products  for the  HVAC and  commercial  building  industries  at  locations  in
Scranton,   Pennsylvania,   (Anemostat   Products)   and   Carson,   California,
(Anemostat-West).  The  Anemostat  products are  complementary  to the Company's
existing  louver and damper  businesses.  The purchase price paid for the assets
acquired  was  approximately  $26,084,000,   including  assumed  liabilities  of
approximately  $3,123,000.  The Company  intends to account for this  acquistion
under the purchase method of accounting.


<PAGE>



PART III

With respect to items 10 through 13, the Company  will file with the  Securities
and  Exchange  Commission,  within 120 days of the close of its fiscal  year,  a
definitive proxy statement pursuant to Regulation 14-A.


Item 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Information  regarding  directors  of  the  Company  will  be set  forth  in the
Company's proxy  statement  relating to the annual meeting of shareholders to be
held May 18,  1999,  and to the  extent  required,  is  incorporated  herein  by
reference.  Information regarding executive officers of the Company is set forth
under the caption "Executive Officers".


Item 11 - EXECUTIVE COMPENSATION

Information regarding executive  compensation will be set forth in the Company's
proxy  statement  relating to the annual meeting of  shareholders to be held May
18, 1999, and, to the extent required, is incorporated herein by reference.

The  report  of the  Compensation  Committee  of the Board of  Directors  of the
Company shall not be deemed  incorporated by reference by any general  statement
incorporating  by  reference  the  proxy  statement  into any  filing  under the
Securities  Exchange Act of 1934,  and shall not otherwise be deemed filed under
such Act.


Item 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Information  regarding  security  ownership  of  certain  beneficial  owners and
management will be set forth in the Company's  proxy  statement  relating to the
annual  meeting of  shareholders  to be held May 18,  1999,  and,  to the extent
required, is incorporated herein by reference.


Item 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Information regarding certain relationships and related transactions will be set
forth in the  Company's  proxy  statement  relating  to the  annual  meeting  of
shareholders  to be  held  May  18,  1999,  and,  to  the  extent  required,  is
incorporated herein by reference.





<PAGE>



PART IV


Item 14 - EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES, AND REPORTS ON FORM 8-K


INDEX
Pages of
this report


Independent Auditors' Reports                                           Page 22

Financial Statements:

(a)(1) Consolidated Balance Sheets as 
     of December 31, 1998 and 1997                              Pages 23 and 24

Consolidated Statements of Income for the Years
Ended December 31, 1998, 1997, and 1996                                 Page 25

Consolidated Statements of Shareholders' Equity for
the Years Ended December 31, 1998, 1997, and 1996                       Page 26

Consolidated Statements of Cash Flows for the Years
Ended December 31, 1998, 1997, and 1996                                 Page 27

Notes to the Consolidated Financial Statements

(a)(2) Financial Statement Schedules

II. Valuation and Qualifying Accounts                                   Page 47

All other  financial  statement  schedules  required by Item  14(a)(2) have been
omitted because they are  inapplicable  or because the required  information has
been included in the consolidated financial statements or notes thereto.

(a)(3) Exhibits
The Exhibit Index is set forth on Pages 48 through 51

(b) No reports on Form 8-K were filed during the three months ended December 31,
 1998.


No annual  report to security  holders as of December  31, 1998 had been sent to
security holders and no proxy statement, form of proxy or other proxy soliciting
material has been sent by the  registrant  to more than ten of the  registrant's
security holders with respect to any annual or other meeting of security holders
held or to be held in 1999.  Such  annual  report  to  security  holders,  proxy
statement or form of proxy will be furnished to security  holders  subsequent to
the filing of this Annual Report on Form 10-K.





<PAGE>







Schedule II




                                  MESTEK, INC.
                       Valuation and Qualifying Accounts
                  Years ended December 31, 1998, 1997 and 1996




                           Bal. at     Charged              Bad Debt       Bal.
                             Beg.        to       Other     Write-offs   at end
Year Description           of Year     expense     (1)         (2)      of Year
                           -------     -------    -----     ----------  -------

1998 Allowance
for doubtful
accounts                   $2,529      $1,165       $57       ($308)     $3,443

1997 Allowance
for doubtful
accounts                   $1,701      $1,124       $16       ($312)     $2,529

1996 Allowance
for doubtful
accounts                   $1,377        $740       $26       ($442)     $1,701



(1) Includes  recoveries of amounts  previously  written-off  and allowances for
doubtful accounts of acquired companies.

(2) Bad debts written off.















<PAGE>



EXHIBIT INDEX

Those documents followed by a parenthetical  notation are incorporated herein by
reference to previous filings with the Securities and Exchange Commission as set
forth below.

Exhibit No.
Description
****************

2.1  Plan of Reorganization of Eafco, Inc.

3.1  Restated Articles of Incorporation of Mestek, Inc., as amended         (K)

3.2  By-laws of Mestek, Inc. as amended through April 1, 1993               (D)

10.1 Employment Agreement dated January 1, 1982 between Mestek
     and John E. Reed                                                       (A)

10.2 Lease dated July 1, 1983 between Sterling Realty Trust (lessor)
     and Mestek, Inc. (lessee)                                              (D)

10.3 Lease dated December 17, 1984 between Mestek  (lessee) and Sterling  Realty
     Trust (lessor), as amended on November 1, 1991 (D)

10.4 Lease dated  January 1, 1994 between  Mestek  (lessee) and Sterling  Realty
     Trust (lessor) (D)

10.5 Amended and restated lease agreement dated as of July 1, 1997
     between Mestek, Inc. (lessee) and Rudbeek Realty Corp. (lessor)

10.6 Amended and restated lease agreement dated as of January 1, 1997
     between Vulcan Radiator Division, Mestek, Inc. (lessee) and
     MacKeeber Associates Limited Partnership (lessor).                     (K)

10.7 Equipment Lease  Agreement  dated January 1, 1993,  between Mestek (lessee)
     and Sterling Realty Trust (lessor) (D)

10.8 Loan Agreement dated as of December 1, 1984 among Reed National
     Corp., Rudbeek Realty Corp. and The Pitt County Industrial Facilities
     and Pollution Control Financing Authority and the Promissory Notes
     thereunder two Guaranty Agreements dated as of December 1, 1984
     between Reed National Corp., NCNB National Bank of North Carolina,
     and Rudbeek Realty Corp.                                               (A)

10.9 Loan Agreement  dated as of May 1, 1984 among the  Connecticut  Development
     Authority  (the "CDA"),  MacKeeber  Limited  Partnership,  Vulcan  Radiator
     Corporation  and  the  Promissory  Notes  thereunder;  Guaranty  of  Vulcan
     Radiator  Corporation and Reed National Corp. to the  Connecticut  Bank and
     Trust Company, NA (A)

10.10 Note Agreement dated as of July 1, 1987 between Mestek, Inc. and
     Massachusetts Mutual Life Insurance Company.                           (B)

10.11Indemnification  Agreements  entered  into  between  Mestek,  Inc.  and its
     Directors and Officers and the Directors of its  wholly-owned  subsidiaries
     incorporated  by reference as provided  herein,  except as set forth in the
     attached schedule (C)



<PAGE>



10.12 Share Purchase Agreement relating to the acquisition of capital
     stock of Ruscio Brothers Refractory, Ltd. And Rainbow Electronics
     Spotwelding Equipment, Ltd. dated April 29, 1998 by and between
     1291893 Ontario, Inc. as Buyer and Domenic Ruscio, et al., as Sellers. (L)

10.13 Variable Interest Rate Cognovit Note dated December 15, 1993
     between Mestek, Inc. and The Mary Staebell Trust                       (D)

10.14 Lease Agreement dated July 1, 1998 between Mestek (lessee) and
     Sterling Realty Trust (lessor).                                        (D)

10.15 Loan Agreement and Promissory Note dated June 7, 1993 between
     The First National Bank of Boston and Mestek, Inc.                     (D)

10.16 Mortgage Note dated February 1, 1986 between Arrow United 
     Industries, Inc. and Chemical Bank; said Note assumed by
     Mestek, Inc. in the purchase of certain assets of Arrow 
     United Industries, Inc.                                                (D)

10.17 Closing Agreement dated February 10, 1995 between Shougang
     Mechanical Equipment of Pennsylvania, Inc. and West Homestead
     Joint Venture Corporation.                                             (E)

10.18 Equipment Lease Agreement dated January 1, 1993 between Machinery
     Rental Company (Lessor) and Vulcan Radiator Corporation (Lessee).      (E)

10.19 Equipment Lease Agreement dated January 1, 1993 between Machinery
     Rental Company (Lessor) and Mestek, Inc. (Lessee).                     (E)

10.20 Equipment Lease Agreement dated January 1, 1993 between
     Elizabeth C. Reed Trust (Lessor) and Mestek, Inc. (Lessee).            (E)

10.21 Asset Purchase Agreement dated September 9, 1994 between
     Mestek, Inc. and Aztec International, Ltd., debtor-in-possession;
     and Aztec Sensible Cooling, Inc., debtor-in-possession, and the
     Amendment thereto dated October 31, 1994.                              (E)

10.22 Stock Purchase Agreement relating to the acquisition of stock
     of National Northeast Corporation dated October 30, 1995
     by and between Mestek, Inc. as Buyer and David Weener,
     Wayne Frerichs, Mark McCrill,and Jon Morrison as Sellers; 
     Stock Purchase Agreement dated October 30, 1995 relating to
     the acquisition of stock of National Southeast Aluminum Corporation
     by and between Mestek, Inc. as Buyer and David Weener,
     Wayne Frerichs, Mark McCrill, and on Morrison as Sellers.              (F)

10.23 Asset Purchase Agreement dated November 15, 1995 by and
     between Mestek, Inc. and Heat Exchangers, Inc. and Lease.              (G)

10.24 Stock Purchase Agreement dated February 2, 1996 for the purchase
     of stock of Omega Flex, Inc. between Mestek, Inc. and Koji Shimada
     and Lease.                                                             (G)

10.25 Agreement for the Purchase and Sale of Assets dated
     January 12, 1996 by and between Mestex, Ltd.,
     Rowe Machinery & Automation, Inc., and Met-Coil Systems Corporation,
      and the Amendment thereto dated February 5, 1996 and Lease.           (G)




<PAGE>



10.26 Stock Purchase Agreement dated October 27, 1997 between
     Formtek, Inc. and Joseph Julian.                                       (J)

10.27 Asset Purchase Agreement dated October 2, 1995 by and
     between Mestek, Inc. and Honeywell, Inc.                               (H)

10.28 Agreement of Sale dated July 5, 1995 between 
     The Hydrotherm Corporation and SET Realty, L.L.C. for the
      purchase and sale of real propertyin Northvale, New Jersey.           (H)

10.29 Purchase Contract dated November 15, 1995 for the purchase and
     sale of real property in Dunmore, Pennsylvania between 
     Peritek, Inc. and R.R. Donnelly & Sons Company.                        (H)

10.30 1996 Mestek, Inc. Stock Option Plan.                                  (I)

10.31 Amended and Restated Revolving Loans and Foreign Exchange
     Facilities Agreement between Mestek, Inc. and Bank Boston 
     dated July 15, 1997.                                                   (J)

10.31 Agreement for The Purchase and Sale of Assets between 
     Formtek, Inc. (Purchaser) and Dalhstrom Industries, Inc.
     (Seller) dated August 8, 1996.                                         (K)

10.32 Lease dated January 1, 1997 between Pacific/ 
     Air Balance, Inc. (Lessee) and Production Realty, Inc. (Lessor).       (J)

10.33 Stock Purchase Agreement between Formtek, Inc.(Purchaser) and
     Maurice Hill Trust dated August 16, 1991, Thomas Nedbal,
     Donald Hill, Robert Martinelli, Elmer Utley, and Allen Reczek
     (Sellers) dated January 30, 1997.                                      (K)

10.34 Letter Agreement between Mestek, Inc. and the Travelers Insurance
     Company, dated March 1, 1996, regarding five and fifty-three
     hundredth percent (5.53%) Senior Notes due March 1, 1998.              (K)

10.35 Supplemental Executive Retirement Agreements entered into between
     Mestek, Inc. and certain of its officers.                              (J)

11.1 Schedule of Computation of Earnings per Common Share.

22.1 Subsidiaries of Mestek, Inc.

     (A)  Filed as an Exhibit to the Registration  Statement 33-7101,  effective
          July 31, 1986

     (B)  Filed as an  Exhibit to the  Current  Report on Form 8-K dated July 2,
          1987

     (C)  Filed as an  Exhibit  to the  Annual  Report on Form 10-K for the year
          ended December 31, 1987

     (D)  Filed as an  Exhibit  to the  Annual  Report on Form 10-K for the year
          ended December 31, 1993

     (E)  Filed as an  Exhibit  to the  Annual  Report on Form 10-K for the year
          ended December 31, 1994





<PAGE>



     (F   ) Filed as an Exhibit to the Current Report on Form 8-K dated November
          13, 1995.

     (G)  Filed as an Exhibit to the Current  Report on Form 8-K dated  February
          13, 1996.

     (H)  Filed as an  Exhibit  to the  Annual  Report on Form 10-K for the year
          ended December 31, 1995.

     (I)  Filed as an  Exhibit  to the  Quarterly  Report  on Form  10-Q for the
          quarter ended September 30, 1996.

     (J)  Filed as an  Exhibit  to the  Quarterly  Report  on Form  10-Q for the
          quarter ended September 30, 1997.

     (K)  Filed as an  Exhibit  to the  Annual  Report on Form 10-K for the year
          ended December 31, 1996.

     (L)  Filed as an  Exhibit  to the  Quarterly  report  on Form  10-Q for the
          quarter ended June 30, 1998.




<PAGE>



                                                                   Exhibit 11.1


                                  MESTEK, INC.
              Schedule of Computation of Earnings Per Common Share




Years Ended December 31,
                                                            1998 1997 1996
                                                            ---- ---- ----


Net income for earnings per share                      $16,064  $14,405  $13,329
                                                       =======  =======  =======

Basic weighted ave. no. of common shares outstanding     8,921    8,929    8,938
                                                       =======  =======  =======

Basic earnings per common share                         $1.80    $1.61    $1.49
                                                       =======  =======  =======

Diluted weighted ave. no. of common shares outstanding   8,949    8,951    8,943
                                                       =======  =======  =======

Diluted earnings per common share                       $1.80    $1.61    $1.49
                                                       =======  =======  =======






<PAGE>



                                                                   Exhibit 22.1



                              LIST OF SUBSIDIARIES


                                                                Jurisdiction of
Name                                                                  Formation

Advanced Thermal Hydronics, Inc.                                       Delaware

Alapco Holding, Inc.                                                   Delaware

Anemostat, Inc                                                         Delaware

Boyertown Foundry Company                                              Delaware

Deltex Partners, Inc.                                                  Delaware

Formtek, Inc.                                                          Delaware

Cooper-Weymouth, Peterson, Inc.                                        Delaware

Hill Engineering, Inc.                                                 Illinois

CoilMate, Inc.                                                      Connecticut

Gentex Partners, Inc.                                                     Texas

Mestex, Ltd. (Texas limited partnership)                                  Texas

Yorktown Properties, Ltd. (Texas limited partnership)                     Texas

HBS Acquisition Corporation                                            Delaware

Keyser Properties, Inc.                                                Delaware

Lexington Business Trust (Massachusetts business trust)           Massachusetts

Mestek Canada, Inc.                                                     Ontario

Mestek Foreign Sales Corporation                            U.S. Virgin Islands

Mestek Technology, Inc.                                                Delaware

MCS, Inc. Pennsylvania

National Northeast Corporation                                         Delaware

Omega Flex, Inc. Pennsylvania

Pacific/Air Balance, Inc.                                            California

TEK Capital Corporation                                                Delaware

Westcast, Inc.                                                    Massachusetts





<PAGE>




                                                                   Exhibit 10.12

                         SCHEDULE OF DIRECTORS/OFFICERS
                           Indemnification Agreements

The  Indemnification  Agreement entered into by the Directors and/or Officers of
Mestek,  Inc. and certain  Directors of Mestek's wholly owned  subsidiaries  are
identical in all respects,  except for the name of the  indemnified  director or
officer and the date of execution.

Set forth below is the identity of each director and officer of Mestek, Inc. and
the date upon which the above  Indemnification  Agreement  was  executed  by the
Director or Officer.

Director and/or Officer                                       Year of Execution

A. Warne Boyce                                                             1987
E. Herbert Burk                                                            1987
William J. Coad                                                            1987
David R. Macdonald                                                         1987
David M. Kelly                                                             1996
Winston R. Hindle, Jr.                                                     1995
David W. Hunter                                                            1987
John E. Reed                                                               1987
Stewart B. Reed                                                            1987
James A. Burk                                                              1987
R. Bruce Dewey                                                             1990
Robert G. Dewey                                                            1988
Nicholas Kakavis                                                           1987
Robert K. McCauley                                                         1995
Richard J. McKnight                                                        1987
Walter J. Markowski                                                        1990
John F. Melesko, Jr.                                                       1987
Jack E. Nelson                                                             1996
William S. Rafferty                                                        1990
Stephen M. Shea                                                            1987
Charles J. Weymouth                                                        1995
Kevin R. Hoben                                                             1996
Stephen M. Schwaber                                                        1997
Phil K. LaRosa                                                             1997
Robert P. Kandel                                                           1997
Robert F. Neveu                                                            1997
Richard E. Kessler                                                         1997
Timothy P. Scanlan                                                         1997






<PAGE>



                                   SIGNATURES


Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934,  the  registrant  has caused this report be signed on its behalf by
the undersigned, thereunto duly authorized.

                                  MESTEK, INC.


Date: March 31, 1999          By: /S/ John E. Reed
      --------------          -------------------------------------------------
                              John E. Reed, Chairman of the Board
                              and Chief Executive Officer

Date: March 31, 1999          By: /S/ Stephen M. Shea
      --------------          -------------------------------------------------
                              Stephen M. Shea, Senior Vice President
                              Finance, Chief Financial Officer



Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following  persons on behalf of the  registrant and
in the capacities and on the dates indicated.




Date: March 31, 1999            By: /S/ A. Warne Boyce
      --------------            -----------------------------------------------
                                A. Warne Boyce, Director




Date: March 31, 1999            By: /S/ E. Herbert Burk
      --------------            -----------------------------------------------
                                E. Herbert Burk, Director




Date: March 31, 1999            By: /S/ William J. Coad
      --------------            -----------------------------------------------
                                William J. Coad, Director







<PAGE>



Date: March 31, 1999            By: /S/ David M. Kelly
      --------------            -----------------------------------------------
                                David M. Kelly, Director




Date: March 31, 1999            By: /S/ Winston R. Hindle, Jr.
      --------------            -----------------------------------------------
                                Winston R. Hindle, Jr., Director




Date: March 31, 1999            By: /S/ David W. Hunter
      --------------            -----------------------------------------------
                                David W. Hunter, Director




Date: March 31, 1999            By: /S/ David R. Macdonald
      --------------            -----------------------------------------------
                                David R. Macdonald, Director




Date: March 31, 1999            By: /S/ John E. Reed
      --------------            -----------------------------------------------
                                John E. Reed, Director




Date: March 31, 1999            By: /S/ Stewart B. Reed
      --------------            -----------------------------------------------
                                Stewart B. Reed, Director





<PAGE>