November 16, 1998 Third Quarter Report To Shareholders 1998

Sales for the nine months to September 30, 1998 were $551.0 million, an increase of $61.0 million or 12.5% over the $490.0 million achieved in the comparable period of last year, while third quarter sales, at $188.1 million, were 11.7% ahead of last year. Sales of the Packaging Segment in the third quarter were $97.7 million which reflects an increase of 7.7% over last year’s $90.7 million. This improvement occurred in the U.S. and is primarily due to stronger sales of steel strapping. Although sales of plastic strapping products continued to under-perform, a trend towards higher sales was noted during the quarter. Metal Processing sales were up 9.6% in the quarter to $71.1 million aided by strong sales of roll formed and stainless steel pipe products. Distribution sales for the quarter, at $19.3 million, were ahead 51.4% over last year, primarily due to sales in the U.S. arising from the acquisition of Energy Steel Products which was completed on February 10, 1998.

Earnings for the nine months were $19.7 million or $0.57 per share, a decrease of 14.6% from the $23.1 million or $0.67 per share earned last year. For the third quarter, earnings were $6.1 million or $0.18 per share which represents a decrease of 15.6% from the $7.2 million or $0.21 per share in the comparable quarter of last year. The earnings per share for 1997 have been restated to give effect to the 2-for-1 stock split, effective May 11, 1998.

Operating profits for the quarter amounted to $12.2 million which is $1.6 million or 11.3% below last year. The Metal Processing Segment turned in another strong performance with profits of $12.1 million which represents an increase of 35.5% over last year’s $8.9 million. All operations within this segment continued to perform well during the quarter. The Packaging Segment had profits of $2.1 million which represents a decrease of 62.3% from the $5.9 million achieved last year. Although this performance represents an improvement over the $1.4 million profit earned in the second quarter, Packaging continues to experience difficult operating conditions. These include a highly-competitive market place for plastic strapping products, particularly in the U.S., higher plastic manufacturing costs and reduced profitability at the U.K. operations due to lower sales, the strength of the British pound and price competition from European competitors. The Distribution Segment incurred a loss of $1.0 million in the quarter compared to a profit of $0.3 million last year. The decrease in profitability is due to performance at the U.S. operations and resulted from continuing start-up and merger-related costs and lower than anticipated sales and margins due to deflationary pressures and a highly-competitive market place.

Net interest expense in the quarter, at $3.3 million, is $0.5 million higher than last year and is due to higher borrowing resulting from capital spending and the Energy Steel Products acquisition and an increased investment in working capital.

On August 17, 1998, the Company issued a press release announcing that it had filed with The Toronto Stock Exchange a Notice of Intention to make a Normal Course Issuer Bid for its common shares. The Company is entitled to purchase up to 1,728,627 common shares of Samuel Manu-Tech Inc. during the one-year period commencing August 19, 1998. For the quarter ended September 30, 1998, 26,800 shares were purchased under the Issuer Bid.

As a result of various initiatives undertaken, the results for the Packaging and Distribution Segments are anticipated to improve in 1999. Profitability in the fourth quarter, however, is expected to be below last year. While Metal Processing should continue to be strong, Packaging will be impacted by the costs associated with the reorganization of its two U.K. units into a single operation and Distribution’s results will be adversely affected by the ongoing deflationary pressures on its Energy Steel Products inventory.

Mark C. Samuel

President

November 16, 1998

CONSOLIDATED STATEMENTS OF EARNINGS

Nine Months ended September 30, 1998 and 1997 (unaudited)
(thousands of dollars except per share amounts)

	3RD QUARTER		NINE MONTHS
	1998	1997		1998	1997
NET SALES	$  188,091	$  168,327		$  550,984	$  489,980
COSTS (INCOME) AND EXPENSES:
Cost of sales, selling and administration	169,538	148,838		493,313	430,168
Depreciation and amortization	6,396	5,777		18,579	16,731
Interest on long-term debt	2,842	2,925		8,650	7,842
Interest on short-term debt	518	142		1,263	340
Interest income	(37)	(210)		(63)	(262)
	179,257	157,472		521,742	454,819
EARNINGS BEFORE INCOME TAXES	8,834	10,855		29,242	35,161
PROVISION FOR INCOME TAXES	2,750	3,650		9,500	12,050
NET EARNINGS	$     6,084	$     7,205		$     19,742	$     23,111
NET EARNINGS PER SHARE	$       0.18	$       0.21		$       0.57	$       0.67

Earnings per share for 1997 have been restated to give effect to the 2-for-1 stock split effective May 11, 1998.

SEGMENTED INFORMATION

Nine Months ended September 30, 1998 and 1997 (unaudited)
(thousands of dollars)

	3RD QUARTER		NINE MONTHS
NET SALES	1998	1997		1998	1997
Packaging	$    97,661	$    90,706		$    283,101	$    273,570
Metal Processing	71,130	64,875		211,085	182,372
Distribution	19,300	12,746		56,798	34,038
Consolidated	$  188,091	$  168,327		$  550,984	$  489,980

	3RD QUARTER		NINE MONTHS
EARNINGS (LOSS) BEFORE INTEREST	1998	1997		1998	1997
Packaging	$    2,068	$    5,482		$    5,943	$    17,123
Metal Processing	12,125	8,947		37,618	28,214
Distribution	(1,011)	278		(1,421)	993
Corporate	(1,025)	(995)		(3,048)	(3,249)
Consolidated	$  12,157	$  13,712		$  39,092	$  43,081

CONSOLIDATED BALANCE SHEETS

September 30, 1998 and 1997 (unaudited)
(thousands of dollars)

	1998	1997
ASSETS
CURRENT ASSETS:
Cash and short-term deposits	$      3,888	$        7,200
Accounts receivable	118,701	100,320
Inventories	162,459	127,192
Prepaids and sundry	4,992	3,841
	290,040	238,553
FIXED ASSETS	186,002	157,012
DEFERRED PENSION COSTS	3,252	2,746
INTANGIBLE ASSETS	61,923	60,908
	$   541,217	$    459,219
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Bank indebtedness	$     50,592	$        18,829
Accounts payable and accrued liabilities	98,629	82,180
Dividends payable	1,393	1,392
Income taxes payable	999	2,421
Current portion of long-term debt	1,659	1,895
	153,272	106,717
LONG-TERM DEBT	170,227	161,623
POST-RETIREMENT BENEFITS
OTHER THAN PENSIONS	4,929	4,986
DEFERRED INCOME TAXES	6,391	6,717
	334,819	280,043
SHAREHOLDERS' EQUITY:
Capital stock	27,959	27,989
Retained earnings	164,100	142,853
Cumulative translation adjustment	14,339	8,334
	206,398	179,176
	$   541,217	$   459,219

CONSOLIDATED STATEMENTS OF CHANGES IN FINANCIAL POSITION

Nine Months ended September 30, 1998 and 1997 (unaudited)
(thousands of dollars)

	1998	1997
CASH PROVIDED BY (USED IN):
OPERATING ACTIVITIES:
Net earnings	$    19,742	$   23,111
Items not involving cash:
Depreciation and amortization	18,579	16,731
Deferred income taxes	680	555
Deferred pension costs	(400)	266
Post-retirement benefits other than pensions	(73)	(144)
	38,528	40,519
Change in non-cash operating working capital:
Accounts receivable	(19,207)	(19,069)
Inventories	(14,206)	(20,248)
Prepaids and sundry	(2,639)	1,304
Accounts payable and accrued liabilities	20,464	11,956
Income taxes payable	(1,708)	(1,311)
	21,232	13,151
INVESTING ACTIVITIES:
Proceeds on sale of fixed assets	410	152
Purchase of fixed assets	(40,990)	(17,351)
Cumulative translation adjustment	7,966	1,365
Business acquisition	(7,984)	(2,761)
	(40,598)	(18,595)
FINANCING ACTIVITIES:
Purchase of common shares	(438)	(23)
Increase (Decrease) in long-term debt, net	7,287	(7,110)
	6,849	(7,133)
DIVIDENDS PAID ON COMMON SHARES	(4,148)	(4,150)
DECREASE IN CASH DURING THE PERIOD	(16,665)	(16,727)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD	(30,039)	5,098
CASH AND CASH EQUIVALENTS, END OF PERIOD	$    (46,704)	$    (11,629)

Cash and cash equivalents is comprised of cash and short-term deposits less bank indebtedness.

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