Annual Report (Form 10-K), fiscal year 1994

ITEM 1 - BUSINESS
GENERAL The Company is a multinational corporation engaged in the design, manufacture and sale or distribution of products in the automotive, materials handling, packaging, and aerospace industries. The Company's operations are divided into two segments: Engineered Materials and Handling/Packaging Systems. For certain information regarding these segments, including information regarding geographic regions see Note 6 of Notes to Consolidated Financial Statements.
ENGINEERED MATERIALS The Engineered Materials segment includes Special Materials, which produces ferrous metal powder used to manufacture precision parts, and Aerospace Components, which manufactures precision jet engine components and repairs jet engine fan blades. The two units which comprise Engineered Materials generally use proprietary and patented processes to produce high quality metal powders or components.
SPECIAL MATERIALS General - The Company conducts its Special Materials business through Hoeganaes Corporation, which is the North American market leader in the production of ferrous metal powders. Ferrous metal powder is used by customers primarily to manufacture precision parts for automobiles, light trucks, farm and garden equipment, heavy construction equipment, hand tools, and appliances. Precision parts produced using powder metallurgy technology have certain cost and design advantages over parts produced using conventional techniques such as forging, casting, stamping or machining, as they may be manufactured with less wasted raw material, lower labor costs and little or no additional machining.
Hoeganaes' business strategy centers on research and development of new metal powder products, manufacturing processes and applications while maintaining a broad product line and cost-efficient, strategically located production facilities. Product development efforts have focused on developing a bonding and mixing technology which bonds alloys and other additives directly to the metal particles. This process results in a pre-mixed powder which has more consistent metallurgical properties than a conventional premix. It also offers manufacturing productivity benefits for the parts fabricator. This work resulted in the launch of a proprietary, bonded pre-mix called ANCORBOND (R) which achieved commercial acceptance. In 1994, Hoeganaes introduced a new patented process and product called ANCORDENSE (TM) which builds on the ANCORBOND technology and uses heat throughout the parts forming process. The combination of special, bonded pre-mixed powders and warm compaction enables fabricators to produce parts with metallurgical properties that previously could be obtained only through more expensive processes. Pilot part programs using ANCORDENSE were begun in 1994.
Hoeganaes' current products and new product development coupled with cost- efficient manufacturing processes producing a high quality powder enable it to maintain market leadership.
Production - Hoeganaes has two basic production processes. The first process is atomizing, which converts scrap steel into powders through the use of an electric furnace steel making and water atomization system. Hoeganaes has the two largest atomizing plants in North America. The second process is direct reduction which converts high purity iron ore into a highly porous metal powder. Hoeganaes has the only direct reduction process facility in North America. Hoeganaes also formulates these powders into press-ready mixes for
its customers. In 1994, Hoeganaes added annealing capacity at both of its atomizing plants. In addition, Hoeganaes produces proprietary bonded products such as patented bonded materials like ANCORBOND and ANCORDENSE.
Market Share - The Company believes that Hoeganaes has been the largest North American producer of ferrous metal powders for the last 25 years. Hoeganaes' size provides it with economies of scale in production, marketing and research and development.
Markets - The North American market for ferrous metal powders can be divided into two segments: structural parts and non-structural applications.
Uses for structural parts comprise an estimated 80% of the North American market for ferrous metal powders. Approximately 65% of Hoeganaes' sales are for automotive applications, which include components for transmissions, engines and suspension systems. For automobile applications, Hoeganaes generally supplies metal powder to component manufacturers as opposed to directly supplying vehicle manufacturers.
The non-structural market for ferrous metal powders generally consists of applications in welding, chemicals, friction applications such as brake pads and linings, and for use as a carrier agent for photocopier toner. Ferrous metal powders are also used by pharmaceutical companies as catalysts in blood thinning agents and for use in nutritional iron supplements.
Minority Interest - The Company owns 80% of the capital stock of Hoeganaes. The remaining 20% is owned by Hoganas AB, a Swedish corporation. Agreements between the owners of Hoeganaes define the structure of the Hoeganaes board of directors, grant to each party a right of first refusal with respect to a proposed sale of Hoeganaes stock and provide for technology exchanges and tax sharing arrangements.
AEROSPACE COMPONENTS The Company conducts its Aerospace Components business through Chem-tronics, Inc., which manufactures precision jet engine ducts, rings and cases and other large aerospace components ("Fabrication"). Chem-tronics is also a leader in jet engine fan blade repair ("Repair"). Chem-tronics' business strategy focuses on developing and implementing advanced manufacturing technologies to maintain high quality standards and to satisfy customer needs on a timely basis.
Fabrication General - The Fabrication business is engaged in the production of precision jet engine ducts, rings and cases and other large aerospace components used in commercial and military aircraft engines and launch vehicles in the space program. Chem-tronics offers its customers a vertically integrated facility, thereby eliminating the need for numerous subcontractors for a single component. The principal products are sold to engine manufacturers under arrangements which generally establish Chem-tronics as the sole source. The strategy of the Fabrication business has been to diversify and realign the aerospace component business by reducing the dependence on a declining military business by expanding the commercial and space segments and improving its core technologies.
Production Processes - The primary processes used in the Fabrication business are chemical milling, welding, forming, machining, non-destructive testing and inspection. The Unistructure (R) chemical milling process has been used to manufacture both military and commercial jet engine ducts and is used for structures where strength and weight are critical. Through the Unistructure chemical milling process unneeded metal is etched away, leaving a stiffening rib structure on the surface of the product. This patented rib structure is integral, or part of the surface metal itself, rather than being attached to the surface. Products manufactured using the Unistructure process are light, strong, easy to inspect and generally cost less to produce than products made solely by conventional processes.
Products and Customers - The Fabrication business produces titanium ducts which are used as part of the structural framework for jet engines and for containing the air flows used for thrust. Other products include jet engine fan containment cases, rings, complete fan case assembly modules and complex fabrications for large commercial turbofan engines. The primary customers of the Fabrication business are the original equipment manufacturers of jet engines ("OEMs"). In addition to its normal contracts for commercial and military engine components, this business is also involved in various ongoing space programs and is producing compressor cases for commuter aircraft jet engines pursuant to a long-term contract.
Repair General - The Repair business operates Federal Aviation Administration ("FAA") approved repair facilities that serve over 100 airlines, engine overhaul centers, and OEMs with repair capabilities for fan and compressor blades for commercial and military jet aircraft. The Company believes that Repair has a leading market share in commercial jet engine fan blade repair performed by independent blade repair facilities. The cost of repairing a jet engine fan blade generally averages 10-20% of its replacement cost. Growth in this business through 1992 had been based on increases in market share and size but depressed market conditions in 1993 and 1994 have led to revenue declines.
Repair Capabilities - Repair, by virtue of its FAA certification, is considered certified by the Civil Aviation Aeronautics Board and the British Civil Aviation Authority and is certified by all major OEMs (General Electric, Pratt & Whitney and Rolls-Royce) to repair substantially all commercial jet engine fan blades manufactured in the western world. Frequently, when OEMs develop a new engine, Chem-tronics assists in modifications and improvements during the development stage. As a result, Chem-tronics is often the first repair center certified by the FAA for blade repair on such engines. The Company believes this gives Chem-tronics certain competitive advantages and also believes that Chem-tronics has a competitive advantage in terms of quality.
Customers - The Repair business services OEMs, major airlines and engine overhaul centers.
HANDLING/PACKAGING SYSTEMS The Handling/Packaging Systems segment is comprised of the Company's domestic and international Handling and Packaging units. Handling designs, manufactures and sells storage rack, shelving, and related equipment primarily for use in warehouses, distribution centers, retail stores and for other storage applications. The Company believes that Handling is the world's largest manufacturer of storage rack. Packaging designs and sells machinery for applying strapping and stitching wire, and also supplies strapping and stitching wire for use in these machines.
HANDLING General - Handling's operations are based regionally in North America, Europe and Asia Pacific. They are conducted through Interlake Material Handling in the U.S., Canada and Mexico, and under the Dexion name in Europe and Asia Pacific. The Dexion name is well recognized in Europe, Australia, and the Pacific Rim and provides Handling with certain marketing advantages. The Handling operations design, manufacture, and sell storage rack, angle, conveyors, and conveyor systems both in the U.S. and in Europe, and shelving and office partitioning in Europe. Handling's entire product range (other than office partitioning) is also manufactured in Australia and sold throughout Asia Pacific. Products are also sold in South America, Africa and the Middle East.
Handling's direct sales and distribution networks allow it to satisfy the needs of large customers and projects, as well as smaller, geographically distant customers. Handling's design capabilities and large manufacturing capacity enable it to undertake large scale projects where these capabilities may be most advantageously utilized. Handling's large size allows it to realize significant economies of scale in product development, design and manufacturing.
Products - Handling's primary product is storage rack which is used for storing unit loads in distribution centers, warehouse facilities, retail stores, and factory shipping and receiving departments. Storage rack can be assembled in a variety of configurations depending on individual customer needs. Handling offers a broad range of products, including products that allow for FIFO and LIFO storage and retrieval, for the storage of bulky, awkwardly shaped items (lumber, carpet rolls, furniture, etc.) and for the storage and retrieval of very heavy items.
Handling also sells conveyors and conveyor systems which range from simple gravity conveyors to complex belt and chain powered conveyors. In Europe and Australia, Handling manufactures and sells angle and shelving, office storage equipment and in Europe, partitioning for offices.
Market Share - The Company believes that Handling is the world's largest manufacturer of storage rack, with the largest market share in the U.S., the U.K., Belgium and Australia, and the second largest market share in Germany.
Product Development, Design and Manufacturing - In addition to competing on the basis of cost and quality, Handling utilizes proprietary software, computer aided design applications and its in-house structural engineering staff to design the optimal solution for each customer's storage requirements. Furthermore, extensive technical training for its sales staff and for third- party distributors allows for a better assessment of customer needs. Handling's design software is used to generate detailed bills of material which automatically specify the size, type and quantity of all components to be used in the project. This streamlines the selling, design and manufacturing processes.
Handling's facilities generally purchase steel coils and then form, finish and paint the steel for various storage applications. Steel comprises approximately 60-70% of production cost. Handling believes it is a low cost producer and continuing emphasis is placed on overhead and manufacturing cost control and the efficient utilization of raw materials.
Sales and Distribution - The Company believes that Handling's domestic and international direct sales force and extensive distributor network give it a significant competitive advantage. Domestically, Handling is represented by a network of over 180 distributors and a direct sales force. In the U.K., Handling utilizes an independent distributor network, wholly-owned distribution centers and a direct sales force. In Germany, Handling conducts its sales efforts exclusively through a direct sales force and wholly-owned distribution centers. Handling believes that its direct sales force allows it to satisfy the complex needs of large customers and applications, while its extensive distributor network allows it to reach smaller, geographically distant customers. Handling has pursued geographic expansion by purchasing a distributor in Hong Kong to improve sales coverage in the rapidly growing Northeast Asia marketplace and by establishing a sales office in the Czech Republic.
Customers - Handling's customers are primarily engaged in the retailing and wholesaling of food and consumer durables and non-durables and industrial products.
PACKAGING General - Packaging designs and sells machinery for applying steel and non- metallic strap in the U.S., Canada and the U.K. Packaging also sells non- metallic strap in the U.S., and both steel and non-metallic strap in the U.K. and Canada, for use in such machines. Packaging designs, manufactures and distributes wire stitching equipment. Many of the industries served by Packaging are highly cyclical. As a result, Packaging has lowered or eliminated certain fixed costs and is focusing on improving production efficiencies in an effort to maintain profitability even during cyclical downturns.
Products and Customers - Strapping markets are segmented by strapping strength requirements. Non-metallic products have cost, safety and other advantages, but are currently limited by the strength of the joint. As technology has improved, applications for non-metallic products have expanded. Due to the safety advantages and improving strength characteristics of non-metallic strapping, Packaging has focused its engineering and development efforts on the non-metallic strap market. Steel strapping is used predominantly by heavy goods manufacturers and lumber mills to bundle products or reinforce existing packaging. The principal end-users of steel strapping are the steel, lumber, brick, and concrete block industries. Non-metallic strapping is marketed to a broad customer base, with primary emphasis on the corrugated, newspaper, graphics, can, bottle, textile and distribution industries. Wire stitching machines serve a wide customer base including the corrugated box, graphic arts, automotive, agricultural and food industries.
A key growth area for plastic strapping is the conversion of the fiber and lumber industries from steel to plastic strap. Research and development efforts have been focused on developing the high-strength polyester strap these applications require. A major U.S. acrylic fibers plant was successfully converted to polyester strap in 1994, and other customers are targeted. In 1994, Packaging received certification from the American Association of Railroads that enables North American lumber mills to use its polyester strap for rail shipments.
Packaging designs strapping machines, most of which are manufactured to its specifications by third parties. Strap produced by a given manufacturer can generally be used with machines produced by another manufacturer; however, most users purchase strap and machines from the same supplier.
Production - For steel strapping, Packaging purchases raw materials in the form of steel coils which are then slit into bands. The bands are further slit into straps of various widths. The strap is then either zinc coated or painted to prevent rusting. Rust resistant strap is particularly important for the lumber and brick industries where product is exposed to the elements.
For non-metallic strapping, Packaging purchases raw materials in the form of pelletized or flake polyester and polypropylene which are often blended with recycled materials. Non-metallic strapping is manufactured through a continuous extrusion process. This material is then shaped and chilled, then reheated and stretched to the appropriate width and thickness and, finally, annealed, relaxed, either slit or embossed, cooled to minimize shrinkage and wound into coils.
Market Share - The Company believes that the Canadian steel strapping unit has the largest market share in Canada. The Company also believes that the U.K. steel strapping unit has the second largest market share in its market and that the U.K. non-metallic strapping and non-metallic machines units have leading market shares in certain areas. In the U.S., Packaging is a leading supplier of plastic strapping and stitching products.
Sales, Distribution and Servicing - Packaging's direct sales force services clients in the U.S., Canada and the U.K. In the U.S., Packaging also utilizes a network of over 350 distributors to service smaller customers. Within each sales force, product specialists are trained to service the needs of specific industries such as publishing or lumber. Due to the fact that most of Packaging's customers utilize its products for high volume applications, Packaging has an extensive field service organization to allow it to respond rapidly to customer service needs. The Company believes that its sales/distributor network and its field service capabilities give it significant advantages over smaller competitors.
CUSTOMERS; ORDER BACKLOGS Engineered Materials - Sales to General Electric and United Technologies accounted for approximately 34% of Aerospace Components' sales, equivalent to 10% of Engineered Materials' sales and 3% of total Company sales in 1994. The Company is a supplier to these companies and has no other significant relationship with them. Sales to these companies are made pursuant to purchase orders.
At December 25, 1994 and December 26, 1993, the backlog of orders for Engineered Materials was $148.4 million and $73.6 million, respectively. Special Materials' backlog, which is generally short-term in nature, was up 51% to a near record level. Aerospace Components' backlog increased 127% due mainly to new multi-year fabrication orders received for commercial, military and space applications. All orders for Engineered Materials at December 25, 1994 were believed to be firm, but approximately 42% of these orders are subject to renegotiation. Approximately 57% of these orders are expected to be delivered during 1995.
Handling/Packaging Systems - Handling/Packaging Systems' products are sold to a substantial number of industrial customers, none of which individually purchased a significant portion of the segment's output in 1994. The backlog of orders for this segment at December 25, 1994 was $93.1 million compared with $74.0 million at December 26, 1993 (in each case applying foreign exchange rates at December 25, 1994), due mainly to improved order rates at all Handling operations. Order intake at U.S. Handling reached a record level in 1994. All orders at December 25, 1994 were believed to be firm and are expected to be filled during 1995.
COMPETITION Competition is vigorous in both of the Company's business segments. Factors normally affecting competitive conditions are product quality, technological development, price and service. The Company competes with a variety of other entities in each of its businesses.
RESEARCH AND DEVELOPMENT Research activities are directed towards developing primary products and processes. Expenditures on research activities by business segment were as follows:
1994 1993 1992 (in millions)
Engineered Materials. . . . . . $ 2.1 $ 2.1 $ 2.2 Handling/Packaging Systems. . . 1.3 1.1 .6 Total. . . . . . . . . . . $ 3.4 $ 3.2 $ 2.8
The Company believes that these amounts are adequate to maintain its competitive positions in the businesses in which it operates.
PATENTS The Company holds domestic and foreign patents covering certain products and processes in both business segments. While these patents are considered important to the ability of the segments to compete, unpatented manufacturing expertise is considered at least as important. Future profitability of these segments is therefore not considered dependent upon any one patent or group of related patents.
ENVIRONMENTAL MATTERS The Company's operations are subject to extensive and changing federal, state, local and foreign environmental laws and regulations, including those relating to the use, handling, storage, discharge and disposal of hazardous substances, and as a result the Company is from time to time involved in administrative and judicial proceedings and inquiries relating to environmental matters. In addition, the Company's future capital and operating expenditures will continue to be influenced by environmental laws and regulations; however, the Company does not believe these expenditures are likely to have a material adverse effect on its earnings or its ability to compete with other companies. In 1994, capital expenditures for environmental compliance were $.6 million and the Company estimates that environmental capital spending for 1995 will be $1.4 million. In 1993, the Company incurred special nonoperating charges of $4.8 million to provide for estimated environmental liabilities in connection with certain sites not related to its ongoing operations. (See Management's
Discussion and Analysis of Results of Operations and Finanancial Condition - Nonoperating Items, and Note 15 of Notes to Consolidated Financial Statements.)
EMPLOYEES At December 25, 1994 the Company employed a total of 4,536 persons, consisting of 1,986 salaried and 2,550 hourly employees. Of the hourly employees, 57% are represented by unions, with no single union representing a significant number of the hourly employees. Labor contracts covering approximately 11% of hourly employees will expire in 1995. The Company believes that it will not experience difficulties in negotiating the renewal of these contracts.
RAW MATERIALS The Company's principal raw materials are steel and steel scrap which are purchased in the open market where no shortages are anticipated. The Company also purchases large extruded metal shapes and milled products that are available from a limited number of suppliers and high purity iron ore imported from a limited foreign source. The Company believes these sources are adequate to provide for the current and future needs of each of the Company's segments and believes that, if necessary, adequate substitute supplies and suppliers could be obtained without any material adverse effect on the Company's operations or operating results. The Company's conclusions as to availability and impact are based upon the Company's general knowledge of the markets for its raw materials, and its use of alternative sources from time to time.
ITEM 2



ITEM 2 - PROPERTIES
The following are the principal properties of the Company, listed by business unit:
The properties marked with an asterisk (*) are subject to mortgages pursuant to the bank credit agreement. In addition to the facilities described above, the Company owns two other warehouses and leases various warehouses and sales and administrative facilities. The Company believes that its manufacturing facilities are properly maintained and that production capacity is adequate to meet the requirements of the Company.
ITEM 3

ITEM 3 - LEGAL PROCEEDINGS The nature of the Company's business is such that it is regularly involved in legal proceedings incidental to its business. Neither the Registrant nor any of its subsidiaries is a party to any legal proceedings which are material within the meaning of regulations of the Securities and Exchange Commission. Additional information is contained in Notes 15 and 16 of Notes to Consolidated Financial Statements.
ITEM 4

ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None.
PART II
ITEM 5

ITEM 5 - MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS The principal market for Interlake's common stock is the New York Stock Exchange (ticker symbol: IK). The common stock is also listed on the Chicago Stock Exchange and is admitted to unlisted trading on the Pacific Coast Exchange and the Boston Exchange.
Interlake has not paid a dividend or made a distribution with respect to its common stock since the third quarter of 1989. Restrictions under Interlake's bank credit agreement (see Note 13 of Notes to Consolidated Financial Statements) will prevent it from paying any cash dividends in 1995 or in the foreseeable future.
On December 25, 1994, there were approximately 7,432 holders of record of Interlake's common stock.
High and low prices of Interlake's common stock during each of the eight calendar quarters ending on December 31, 1994 were:
1994 1993
Price Price High Low High Low Calendar Quarter Ended March 31. . . . . . . . . . $3 7/8 $2 5/8 $4 3/4 $3 5/8 June 30 . . . . . . . . . . 3 1/4 2 1/8 4 3/8 3 1/8 September 30. . . . . . . . 2 5/8 1 7/8 4 5/8 3 3/8 December 31 . . . . . . . . 2 3/8 1 1/2 4 1/8 2 1/2
ITEM 6

ITEM 6 - SELECTED FINANCIAL DATA The information required by this item is incorporated by reference to the information under the same caption in the Company's 1994 Annual Report to Shareholders.
ITEM 7

ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION The information required by this item is incorporated by reference to the information under the same caption in the Company's 1994 Annual Report to Shareholders.
ITEM 8


ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The information required by this item is incorporated by reference to the information under the same caption in the Company's 1994 Annual Report to Shareholders.
ITEM 9

ITEM 9 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None.
PART III
ITEM 10



ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS OF THE REGISTRANT
(a) Information about directors and nominees required by this item is incorporated by reference to the information under the caption "DIRECTORS AND NOMINEES" in the Registrant's definitive proxy statement to be filed in connection with its 1995 Annual Meeting of Shareholders.
(b) The executive officers listed below are elected annually by the Board of Directors of the Registrant, to serve for a term of office of one year and until their successors are elected.
Executive Name Age Officer Since Positions During Last 5 Years
W. Robert Reum 52 1982 Chairman of the Board since April 1991 and President and Chief Executive Officer since January 1991; President and Chief Operating Officer from August 1989 to December 1990
Craig A. Grant 47 1991 Vice President Human Resources since May 1991; human resources executive at The Ceco Corporation for more than five years prior to May 1991, of which two were as Vice President Human Resources
Stephen Gregory 45 1989 Vice President Finance, Treasurer and Chief Financial Officer since December 1994; Vice President from August 1994 to December 1994; President of the Material Handling Division of The Interlake Companies, Inc. from June 1989 to August 1994
John P. Miller 37 1993 Controller since April 1993; Vice President Finance of the Material Handling Division of The Interlake Companies, Inc. from October 1989 to April 1993
Stephen R. Smith 38 1991 Vice President, Secretary and General Counsel since January 1993; Vice President and General Counsel from January through December 1992; Vice President Law from September to December 1991; Partner in the Chicago law firm of Hopkins & Sutter from 1987 to September 1991
The Registrant has designated the operating executives named below as "executive officers" for purposes of certain provisions of the Securities Exchange Act of 1934.
Executive Name Age Officer Since Positions During Last 5 Years
Brenton S. Fuller 51 1994 Chairman and Managing Director, Dexion (Australia) Pty. Ltd. since 1976.
Robert J. Fulton 52 1994 President, Hoeganaes Corporation, the subsidiary which produces powdered metals, since July 1994; Chief Executive Officer of Micafil, Inc. and consultant to Sterling Stainless Tube - ITT Automotive from 1992 to 1994; Executive Vice President and Chief Operating Officer of Doehler- Jarvis from 1990 to 1992
John J. Greisch 39 1991 President Material Handling Group since December 1994; Vice President since December 1994; Vice President Finance, Treasurer and Chief Financial Officer from February 1993 to December 1994; Vice President from January through February 1993; Managing Director of Dexion Group plc from May 1991 through December 1992; Managing Director of Dexion Limited from February 1990 to November 1992; Group Finance Director of Dexion Group plc from October 1989 to September 1990
James Legler 46 1988 President, Chem-tronics, Inc., the subsidiary which manufactures precision engine components and provides jet engine component repairs
Robert A. Pedersen 49 1986 President, Interlake Packaging Corporation, the subsidiary which produces and distributes strapping, and strapping products and equipment
Vincent E. Piacenti 47 1994 Managing Director, Dexion Limited, since November 1992; Operations Director, Dexion Limited, from November 1991 to October 1992; Vice President Operations, Material Handling Division from 1987 to November 1991
Bernd Stiller 54 1993 Managing Director, Dexion Continental Europe since December 1994; Managing Director, Dexion Group plc from January 1993 to December 1994; Managing Director, Dexion GmbH since 1986
Daniel P. Wilson 50 1994 President Material Handling Division, since January 1994; Vice President Sales, Material Handling Division, from 1988 to 1993
ITEM 11

ITEM 11 - EXECUTIVE COMPENSATION
The information required by this item is incorporated into this report by reference to the information under the caption "Executive Compensation" in the Registrant's definitive proxy statement to be filed in connection with its 1995 Annual Meeting of Shareholders. Notwithstanding the foregoing sentence, the information set forth under "Executive Compensation - Report of the Compensation Committee on Executive Compensation" and "Executive Compensation - Performance Graph" in the Registrant's definitive proxy statement to be filed in connection with its 1995 Annual Meeting of Shareholders is not incorporated herein.
ITEM 12

ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information required by this item and information regarding compliance with Section 16(a) of the Securities Exchange Act of 1934 to the extent required to be disclosed, is incorporated into this report by reference to the information under the caption "Voting Securities and Security Ownership By Certain Persons and Management" in the Registrant's definitive proxy statement to be filed in connection with its 1995 Annual Meeting of Shareholders.
ITEM 13

ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS None.
PART IV
ITEM 14

ITEM 14 - EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K (a) The following documents are filed as part of this report:
Page in Annual 1. Financial Statements Report*
Report to Independent Accountants 18 Consolidated Statement of Operations for the Years Ended December 25, 1994, December 26, 1993 and December 27, 1992 19 Consolidated Balance Sheet at December 25, 1994 and December 26, 1993 20 Consolidated Statement of Cash Flows for the Years Ended December 25, 1994, December 26, 1993 and December 27, 1992 21 Consolidated Statement of Shareholders' Equity (Deficit) for the Years Ended December 25, 1994, December 26, 1993 and December 27, 1992 22 Notes to Consolidated Financial Statements 23-38
*Incorporated by reference from the indicated pages of the 1994 Annual Report to Shareholders Page in 2. Financial Statement Schedules Form 10-K Report of Independent Accountants on Financial Statement Schedules 21 Schedule V Property, Plant and Equipment 22 Schedule VI Accumulated Depreciation, Depletion and Amortization of Property, Plant and Equipment 23 Schedule VIII Valuation and Qualifying Accounts 24 Schedule X Supplementary Income Statement Information 25
All other schedules are omitted because of the absence of conditions under which they would have been required or because the required information is disclosed in the financial statements or notes thereto.
3. Exhibits
REPORT OF INDEPENDENT ACCOUNTANTS ON FINANCIAL STATEMENT SCHEDULES
To the Board of Directors of The Interlake Corporation
Our audits of the consolidated financial statements referred to in our report dated January 25, 1995, except as to Note 18, which is as of March 8, 1995, appearing in the 1994 Annual Report to Shareholders of The Interlake Corporation (which report and consolidated financial statements are incor- porated by reference in this Annual Report on Form 10-K) also included an audit of the Financial Statement Schedules listed in Item 14(a) of this Form 10-K. In our opinion, these Financial Statement Schedules present fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements.
As discussed in the Notes to Consolidated Financial Statements appearing in the 1994 Annual Report to Shareholders of The Interlake Corporation, the Company changed its method of evaluating the recoverability of goodwill and other long- lived assets in 1994 and changed its method of accounting for postretirement benefits other than pensions and its method of accounting for income taxes in 1992.
PRICE WATERHOUSE LLP
Chicago, Illinois January 25, 1995
THE INTERLAKE CORPORATION AND CONSOLIDATED SUBSIDIARIES SCHEDULE V PROPERTY, PLANT AND EQUIPMENT (in thousands)
THE INTERLAKE CORPORATION AND CONSOLIDATED SUBSIDIARIES SCHEDULE VI ACCUMULATED DEPRECIATION, DEPLETION AND AMORTIZATION OF PROPERTY, PLANT AND EQUIPMENT (in thousands)
Note: The estimated lives used in determining annual rates of depreciation to be applied to the cost for principal classes of assets are:
Years Buildings 30 to 50 Machinery and Equipment 3 to 18
THE INTERLAKE CORPORATION AND CONSOLIDATED SUBSIDIARIES SCHEDULE VIII VALUATION AND QUALIFYING ACCOUNTS
THE INTERLAKE CORPORATION AND CONSOLIDATED SUBSIDIARIES SCHEDULE X SUPPLEMENTARY INCOME STATEMENT INFORMATION
For the Years Ended
December 25, December 26, December 27, 1994 1993 1992 (in thousands)
Maintenance and repairs $ 17,480 $ 17,196 $ 18,451
Depreciation and amortization of intangible assets, preoperating costs and similar deferrals * * *
Taxes, other than payroll and income taxes (principally real estate and personal property taxes) * * *
Royalties * * *
Advertising costs * * *
*less than 1% of total sales and revenues
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
THE INTERLAKE CORPORATION
By ______________________
W. Robert Reum Chairman, President and Chief Executive Officer
March 14, 1995
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons in the capacities and on the dates indicated.
Signature Title
_______________________ Director, Chairman, President and W. Robert Reum Chief Executive Officer
_______________________ Vice President Finance, Stephen Gregory Treasurer and Chief Financial Officer
_______________________ Controller and Chief John P. Miller Accounting Officer
______________________ Director John A. Canning, Jr.
______________________ Director James C. Cotting
______________________ Director Arthur G. Hansen March 14, 1995
______________________ Director John E. Jones
______________________ Director Frederick C. Langenberg
______________________ Director Quentin C. McKenna
______________________ Director William G. Mitchell
______________________ Director Erwin E. Schulze
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration Statements on Form S-8 (Nos. 33-4266 and 33-11428) of The Interlake Corporation of our report dated January 25, 1995, except as to Note 18, which is as of March 8, 1995, appearing in the 1994 Annual Report to Shareholders of The Interlake Corporation which is incorporated by reference in this Annual Report on Form 10-K. We also consent to the incorporation of our report on the Financial Statement Schedules, which appears elsewhere in this Form 10-K.
PRICE WATERHOUSE LLP
Chicago, Illinois
March 14, 1995